Forrest Gump is my hero.
I vividly recall the scene in Forrest Gump where he and Captain Dan are having lunch on the boat. The radio crackles, “His Mama’s sick.”
Did Forrest think to himself, “Hmmm….I better call my travel agent, “or “I wonder what I should pack…will I get a middle seat again?”
It took six seconds from the moment Forrest heard the news to when his head hit the water on his route to see his Mama.
Forrest wasn’t one to overthink things.
The ‘bias for action’ lesson relates well to the issue of succession planning for title agencies. It’s no surprise that each passing moment is one where we all are getting older. At the same time, the title business is becoming more and more complicated. We all know that, but are we planning for what’s next?
Here are some questions our in-house succession planning experts suggest you consider:
- Am I prepared for my organization’s future?
- What are the options to monetize my life’s work?
- How do I get out when I’m ready?
- When should I take some chips off the table and de risk?
- What are the best exit options?
- Do I have a formal transition team?
- Do I have a formal ‘life after business’ plan?
- Have I done a strategic review of my business?
- What if I become ill?
- How can I focus on both value protection and value creation?
- Am I clear on where each stakeholder in the business is today and where they want to go?
A succession plan is one where the owner becomes financially independent of the operating asset and the operating asset becomes financially independent of the owner. Some people prefer to be in front of issues like this while other behind it. Procrastinating only means the process will control you, rather than you controlling it. Responding is always better than reacting.
Selling the business can be the best succession plan, but it is usually only one of the available options. There are others. You may want to consider an ESOP. You may simply want to sell a part of the business and stay on as part of a larger entity with more resources.
Planning for succession means confronting and facing some tough questions. It can be a daunting task. The only way to get to the other side of the issue is to go through it.
Our core business is selling title agencies. A part of our initial onboard questionnaire relates to the reasons why the owners want to sell. If we see another path, we explain that to them. We believe the best decisions are ones which are fully informed, and that understanding your options is prudent. Information is power.
A well conceived succession plan may or may not include selling your agency. What is certain is that not having a succession plan is a recipe for disaster and can only end badly.
What would Forrest do?