by Michelle Jobst, CPMR, Jobst Incorporated
As the owner of an independent rep sales agency you have signed the contracts, your firm is bringing in good opportunities for your principals and you have a solid business plan to develop and care for your customers in the coming years. At what point then should you begin thinking about your exit plan? I like the saying “Begin with the end in mind.”
Your departure from the business might not be on the horizon but acknowledging that a solid plan brings better results helps to pave the way for the beginnings of succession planning. Reps are the constant in the territory. Remember that your manufacturers are counting on you to have excellent sales coverage now, and a seamless transition if ownership ever changes.
Your plan can be informal or very detailed, but I suggest that it should identify the following items:
- Your vision.
- Key players.
For starters, know what you are building and why. You will want to map out your goals and objectives to get there.
In all phases of your agency growth you need to know the key numbers. You should know your finances and what needs to be covered now and in retirement. Do you track the important items related to the value of your firm at any given time? How have you defined what attributes you think are important to success in your territory? Your answers shape your overall vision.
Next, be ready to share your plans and changes with your key players.
Communicating Your Vision to Important Teammates
You are the expert on running your rep business. Success isn’t achieved by living in a vacuum. There are groups and people with whom you will want to share your vision and listen to their feedback.
The deal and details are important. You will want to develop key advisers who can weigh in on important issues related to a future sale. Acquaint yourself with possible advisors now to learn the type of advisors you may need in the future. A few types of consultants to consider are lawyers, bankers, accountants, financial planners, and business valuation specialists. You might also have use for a business broker.
Allow yourself time to get to know possible vendors over time. You should be sharing your long-term objectives with them. Their guidance will be important to hear as you make a plan.
Your principals and customers are interested in different aspects of your company’s vision. Share areas that help them understand that you have a plan for handing over the reins, that you understand what is required to support their needs, and that you have an eye on supporting them in the future.
Key employees and potential partners are also important teammates. Help your organization know that there is a plan for the agency to be around for the long haul. Sharing goals and objectives helps them learn how they can participate and be a part of the successful future. It also serves to give people the opportunity to become aware of the future business ownership possibilities for themselves.
Simple questions you might ask related to the timing for executing a succession plan are these:
- When do you think you might want to retire?
- How quickly and how much time is needed to gather information that advisors will need about your business?
- What additional time will be needed if a contingency plan is required? These days it is even more important.
You may not have every detail decided upon and your plans can change. If you have not started on succession planning, this gives you a place to begin thinking about what is required for your eventual exit and what needs to be in place to maintain success in the territory.
Michelle Jobst, CPMR, is a graduate of the College of St. Catherine, St Paul, Minnesota with degrees in speech communications and international business economics. Jobst has over 20 years’ experience in technical sales; her work history includes experience in customer service and export. She is a member of the Rubber Division, ACS (American Chemical Society) and SPE (Society of Plastic Engineers). While she started working at Jobst Incorporated in 1994, she grew up with the business in her home when her father started out in 1978.