Succession Planning – Transitioning Your Real Estate Business
Succession planning is an eventuality every successful real estate agent will face if they wish to capitalize on the value of their book of business and help assure their clientele are well taken care of in the future.
A successful transition out of real estate will provide an agent with residual income while having peace of mind that their clients were placed in good hands.
Susan, a highly successful agent with nearly thirty years in the business of real estate, was faced with planning for her retirement.
When Susan was considering retirement from real estate, she realized she had spent her entire career helping other individuals make a transition.
She helped clients with their first home or commercial purchase, when they were ready to upgrade, and even when they wanted to downgrade. Susan began to wonder, “Who will help me transition out of my real estate career?”
So, you might be asking yourself, who helps real estate professionals during their transitional periods, specifically when it is time to consider retiring?
When is the right time to plan for retirement? Is it one, three, or five years from now, or is it when that one transaction finally breaks the last thread of patience an agent has? Proper planning will help avoid a desperate exit from the real estate world.
PAUSE NOW to consider what your timeline might look like. Write down what your ideal would be. And hang on to that sheet, because I’ll have you return to it later in this article.
Susan soon realized that unlike beginning a career in real estate, with the numerous resources available to help an individual to become licensed and start a real estate business, there are few resources available to help guide an agent into retirement.
Susan reached out to one of our coaches for advice and learned that as with entering the business of real estate, the more advanced planning and preparation she did, the more successful her transition would be. Our coach began to consult Susan on how to develop a timeline and create action plans to ensure a smoother transition for her and her clients.
Susan had already made the tough decision about exiting the business. However, for many the thought of retirement can create emotional procrastination that prevents planning to allow for a smooth transition and potential residual income.
Unfortunately, many agents realize too late that their clients had sensed their agent’s pending retirement as vacations were coming more often and response time overall became more delayed. Many agents who delayed succession planning lost substantial income as they realized too late that their clients had already “retired” them as their agent.
Consultation and planning in advance allow you to establish processes of protecting your nest egg while creating a path to residual income for your postponed dreams, a new career or retirement.
PAUSE NOW and answer a couple questions:
What will your retirement look like? How do you envision life after real estate?
What’s your number to make that happen? Will you have the income to take care of yourself, to spend on those postponed dreams or perhaps to bridge a transition into another career?
How long in advance you begin planning and how much money you will need is unique to you. McLean International specializes in guiding you in the planning, preparation and transition, whatever that looks like for you.
For some, this process called Succession Planning is purely financial – determine how much your book of business is worth, then divest of it with the maximum profit. For others, your concern lies in transitioning clients to another agent who will take care of them as well as you have.
For most we work with, Succession Planning is a combination of financially taking care of your future and ensuring your clients are left in good hands, while ensuring you don’t have to take the business back because of things falling through the cracks by POOR planning, execution and transition.
The size of an agent’s business will be a critical factor in planning. Is there a partnership, team, employees, agents, equipment and infrastructure to take into consideration? Ultimately, how does the process of marketing and selling of an agent’s book of business unfold? Remember, planning is key to a successful transition.
Look for part two of Succession Planning, Acquisitions, next month!