For many years, the insurance industry has thrived with independent agencies building a legacy by passing operations from one generation to the next. And while the industry has seen a lot of consolidation activity over the last few years, there are still thousands of 2nd and 3rd generation independent agencies run by the original owners’ children and grandchildren.
To keep the tradition alive, agency owners must have a plan to usher in the next generation to take control of the company eventually. Read below for insight on critical items you’ll want to keep in mind as you prepare to bring a child into the agency.
1.) Provide the right training –
While it may be tempting to have your son or daughter get some experience outside of the family agency, this can create complications. It will be challenging to find an agency that wants to invest in an employee they know will leave to return to run the family operations. If they find a job in another agency, they will start their career investing time and build a book for someone else only to leave it behind when they join the family agency. It also means they are learning from and building habits that might not mix into the family agency’s culture and operations leading to conflict down the road.
Instead of passing off those valuable formative years of your child’s career, remember that you have all the people and tools you need to train them right within your agency. Training your son or daughter in your agency means you can share your experiences and lessons as an owner (both good and bad). You also control what other employees will provide additional training. Your child will get the opportunity to learn about insurance from you and the people you trust the most within the agency. They are also developing a full understanding of the ins and outs of running the agency to carry on the business with the same level of integrity in which you built it.
2.) Communicate with the agency –
When bringing a child into the agency, transparency is critical. If the plan is for your son or daughter to take over operations in the future, attempting to cover up or minimize it can create animosity amongst other staff. Also, assuming that all employees understand your plans with the agency is dangerous territory. While many kids of owners grow up in the agency, visit frequently, and maybe even have odd jobs around the office from time to time, this does not automatically communicate to staff that your child is the future boss. Until you formally hire your son or daughter, plans for who will run the agency remain ambiguous.
To avoid or reduce bitterness when your child does come into the agency, make sure that you communicate with the rest of the team. Let them know what your child will be doing within the agency and share what you can regarding plans.
3.) Manage Expectations –
Once you and your child decide it is time for them to start working in the agency, you may find yourself filled with high hopes about the future. After all, you have dreamed of passing the business on to them and continuing the family legacy. It is an exciting time.
However, certain realities need to be kept in mind. For example, your son or daughter may not be the right fit for the industry. If they are working in production, you may find out they do not have strong sales skills. If they arrive with a sense of entitlement and do not adapt to agency culture, this will be problematic. Being prepared to have tough conversations and providing coaching where needed will be critical to their future with the agency. And if it turns out the agency is just not the right place for them to build a career, it may become necessary to let them move on to another opportunity. Putting the right plan in place to set expectations will be critical to helping them be successful and maintain a healthy parent-child relationship at the same time.
The chance to bring a child into a business you love and has helped so many is an incredible opportunity. Using the steps above, you can put together a plan that creates a prosperous future for the agency for generations to come.
For more on this topic, check out the full episode of The Independent Agent below.