When meeting with new prospects, we always get asked three questions (probably in this order):
1. Is this a good time to sell?
2. How much is my agency worth?
3. What would it be like working for someone else?
I believe that I have the experience to answer the third question, but I wanted to receive feedback from others who have sold their agency and are now non-owner employees of other agencies. My experience is the opposite of most agency owners. I started out working for a public accounting firm and then worked for two banks and then a large corporate travel firm. I then started Sukay & Associates. My experience is that the question isn’t what it would be like working for another firm; the question is what is your new boss going to be like?
Companies tend to work very hard to develop a corporate wide culture. The best culture in the world can be destroyed by the acts of a single individual. Our advice is to start by learning the culture of the new firm. If it isn’t healthy, it will be difficult for individuals to act in a positive manner. Then get to know the people that you are going to work with on a daily basis. We frequently do deals with a certain party because our client develops a rapport with someone during the deal process.
Who is normally successful in the transition? We had one client who wanted to prove they could be successful in a corporate environment. He felt he had something to prove. We had another that enjoyed the expanded social and professional relationships. We had another who felt that they were being held to unreasonable expectations. Our advice is to be truthful during the deal process. If you want to reduce your schedule, don’t tell the buyer that you work 60 hours per week. If you like to take off eight weeks in the summer, tell the party that you have a flexible schedule. If you like to have five drinks at lunch, don’t do a deal.
In the end, if you are a committed professional who enjoys your business, there is no reason why you won’t make a smooth transition. Just make sure you assess your most important relationship (other than your spouse and dog), the next highest employee in the company’s hierarchy.
What has been your experience?
Comments
Very good points in this
Very good points in this article. If the seller focuses solely on the financial side of the transaction they will be left feeling frustrated at some point down the road. It is important to understand the culture of the frim to make sure it matches the culture of your firm. As the article states it is important to ask a lot of questions to understand the culture of the firm that may aquire you.
I think the most important
I think the most important thing to look for when considering a sale and the prospect of working for someone else is the culture of the company you are joining. This is the place you are considering giving up your life's work and independence for. You want to be sure they are people you can work with and have fun with. Take the time to meet not only top management, but several others that have been with the acquiring company as well. See how turned on they appear with their jobs and with their employer. There is no doubt things will change so make sure to spend the time to understand exactly how it's going to be with the company you are joining so there are no surprises.In the end, it's really a gut feeling how you feel about the people. Make sure to talk to other firms that have joined the acquiring company and learn from them how they feel things have gone. This is a great measure of how it may be for you.
Good comments, our success
Good comments, our success also hinged on our partners agreeing on the buyer’s philosophy of conducting business. That was the common thread that made our firm successful and enabled us to smoothly transition to our new relationship. We moved away from several companies because we could not get comfortable with them despite the money. Another important aspect that leads to a successful relationship is to formulate a business plan with the new owners prior to the sale for a 2-5 year period. This allows current ownership to gauge the expectations of the new ownership and whether they are realistic and will mesh with your goals. For both sides a written plan with benchmarks allows both sides to manage expectations into the future. That is essential as you move away from the purchase and things change. Don
Tom makes the comment:"My
Culture is key! Tom makes the comment: "My experience is that the question isn’t what it would be like working for another firm; the question is what is your new boss going to be like? Our advice is to start by learning the culture of the new firm." We think Tom’s comment is right on point. Buyers and sellers can negotiate a great financial deal for both parties, but if there isn’t a good cultural fit, it won’t work. You never want a deal to end in divorce. Both parties need to be up front and honest with their expectations. Some sellers want to cut back and start hitting the beach. Other sellers want to take their company to the next level. Neither way is right or wrong; it’s all about expectations. Similarly, some buyers want to consolidate locations or back office operations and combine cultures. Other buyers want to add value where they can, but keep acquired agencies very independent. At Brown & Brown, we understand that our primary assets go home every evening and come back the next morning. As a seller, you have a culture that has kept your team and your customers coming back each day. We are not looking for agencies that need a cultural change. We are looking for agencies that have a merit-based culture similar to ours. Cultures don’t need to be exact, but they need to be based on the same principles and values. So, you ask the question: What would it be like working for this firm? If you do your cultural due diligence and join a firm that has a similar cultural foundation as your own, then your day at the office is not going to change that much. On the other hand, if you want your day to change, then be up-front with your suitors early on in your discussions. You can then work out a plan that meets everyone’s expectations.
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