The ability to make difficult business decisions is one of the key requirements of an insurance agency owner. If it’s your name over the door, you’re the one who has to shoulder the responsibility for the decision. Whenever you make business decisions, it’s important that you make the right decision, for the right reasons.
As you get older, your biggest business decision will begin to loom large. How do you perpetuate your business? If you perpetuate it internally, who will assume ownership? Different owners will have different ways of making this decision, but they usually fall into one of the following categories.
Reward Service
This is the obvious selection for a lot of businesses. The staff member, who’s been there the longest, is the next in line. Making a business decision based on experience is certainly an understandable method. A lot of owners also like the idea of rewarding loyalty and service. However, there’s no guarantee that the longest-serving staff member is the best candidate.
Reward Achievement
If you don’t decide based on experience, you may decide on performance. There are certainly a lot of people working in insurance industry who measure their value based on the size of their client book of business. Choosing the person who brings in the most business to lead the agency certainly sounds like it should assure continued success. However, leadership skills and sales skills are different. A great salesman isn’t always a great leader, and great leaders aren’t always great salesmen.
Reward Friendship
Trust is vital in business. Very few people like to do business with someone they don’t trust. Trust can also be vital in making business decisions. If you have a trusted friend within the business, you may see them as a natural successor. You see someone who’s been through thick and thin with you, someone who’s helped you make some of your business decisions. Does that mean they will be as successful without you?
Find the Right Stuff
There is a method for choosing leaders and deciding on a sportsman’s abilities shared by many coaches, across various sports. That method is to look around the locker room after a big victory. The coach will look into the players’ eyes, and see which ones are hungry for more success. As an agency owner, you don’t have a locker room, or a trophy to win. You can look into the eyes of your staff, and you may see the ‘right stuff’ in one of them. It will only be a hunch, but some hunches lead to the best decisions. Other hunches may lead to disaster.
Plan to Find the Right Successor
You might analyze every piece of information available and use that to form your business decisions. You may go through a meticulous planning process to define the right person to take your agency forward. The success of this method relies heavily on timing. If you start planning a week before you need to make the decision, the plan will not be as effective as the plan that was developed over a year-long period. The only guarantee with planning is the earlier you start, the better the plan.
No matter which method you use, factors like external market conditions and luck will affect the success of your decision. Whether you’ve chosen a successor already, you’re choosing one now or you’re going to choose one in the future, you should think about how you make business decisions. As long as you make them for the right decisions, you’ll be on the right track.
If you have questions about Perpetuation Planning, and achieving your goals, please click here for a consultation.
