How to safely step back from your brokerage

How to safely step back from your brokerage | Insurance Business

How to safely step back from your brokerage

It takes a lot of blood, sweat and tears to establish and maintain a successful brokerage so it’s no surprise many brokers struggle to take a step back from their business once it’s safely up and running.

However, one executive coach has warned that those who remain too hands-on rarely have the time to enjoy the fruits of their labour – so finding a way to share responsibility is key.

“Stepping back from a business doesn’t mean leaving it, especially for business owners that don’t want to retire yet or love working in their business,” says Andrew Laurie, owner of Realize Coaching. “However, for the health of the business and for owners to have the fullest possible life, they need to find a way to step back.”

According to Laurie, who was crowned Executive Coach of the Year (Global and Asia-Pacific) in 2018, there are three options for owners who are ready to step back from their business.

“The first is for owners to focus on other aspects of life that contribute to their quality of life, while retaining a financial interest in the business,” he says.

The second is to sell the business and step away altogether, and the third is to pursue new and bigger growth opportunities, which could see the business expand exponentially.

“All three are great options; the right one depends on the owner’s goals,” says Laurie.

Regardless of the option an owner would like to take, Laurie says there are six steps that must be taken before a business owner can safety step back from the day-today running of the business.

Allocate accountabilities and responsibilities

“It’s key to prepare a list of all activities within the business from planning and sales processes to invoice management and other smaller tasks,” says Laurie. “Someone in the business needs to be accountable for each of these activities and that accountability needs to be formalised.”

While this can be as brief as a one-page position commitment for each role, with their accountabilities and responsibilities listed and signed off, it should also include key performance indicators so managers can monitor the key responsibilities of the role to make sure they’re on track.

Codify processes

This step involves defining how processes are done in the business to ensure they continue to meet the appropriate standards.

“This removes essential business operations knowledge from people’s heads and puts it in a format where everyone can benefit from the knowledge,” explains Laurie. “This also means that new employees can become productive much sooner, and existing employees can work more efficiently without reinventing processes.”

Ensure strong company culture

This doesn’t mean everyone must be friends and being at work is always fun – it means staff align to a set of beliefs and behaviours that you feel represents your business.

According to Laurie, there are three requirements that will almost always create a strong culture – the key elements of the culture are defined by a wide range of staff; each point of culture is articulated so it’s clear what that behaviour or value looks like; and the culture needs to be brought to life, which can be as simple as putting the values up on the walls or giving awards for examples of cultural compliance.

“The culture needs to be real so that it lives on regardless of whether the business owner is physically present,” says Laurie.

Implement financial controls

Disciplined processes need to be in place, from cashflow management and forecasting to annual budgeting and expense approvals, says Laurie.

“It’s preferable to see a range of financial reports monthly to get useful updates on the business’s financial health,” he says. “Without the business owner constantly present, it’s essential to create rules around financial decision-making. This should be the responsibility of the person who will manage the business versus the business owner as chairperson.”

Set up a business dashboard

“A business dashboard should give the owner a good picture of the business beyond the financials,” says Laurie.

Ideally, this dashboard will include objective information such as sales leads being generated, customer satisfaction information, and employee feedback.

“It should also include some subjective observations around new opportunities (new markets, alliances) or potential risks (new competitors, new regulations),” he adds.

Facilitate information flow

Once all processes are in place, it’s important not to overlook communications, warns Laurie.

“The right information needs to be shared with the right people at the right time,” he stresses. “This can range from financial information to sales updates and business plans or personal development shared at meetings, via email or conference calls.”

Of course, as the owner steps back, regular meetings with the manager will be key to ensure the business remains on track and to provide support where needed.

While stepping back from the business you’ve built is never easy, it will be far more likely to thrive if these six measures are put in place, says Laurie.

“They are typically the last to be put in place and are often seen as somewhat of a barrier before the owner can really remove themselves from the day-to-day,” he says.

“It is the foundation needed so the business can let the owner go. Once this is done, the owner can free up time to enjoy life, focus on strategic growth opportunities, and add more value to the business.”