Sometimes, a mentor relationship cements into a true business partnership. When that’s the case, there may be the opportunity for an agent to sell the business rather than letting it slip away to competitors one client at a time.
You may have hundreds of past clients and a big book of business you could sell over a five- or 10-year period, says Sherri Johnson, CEO of Sherri Johnson Coaching and Consulting in Chagrin Falls, Ohio. “I don’t think enough agents plan for this, and they should.
“For the agent you’re mentoring, it’s a chance to begin working with your past clients while you’re still around to provide guidance. That’s a lot easier than trying to figure it out on your own,” she says.
The U.S. Small Business Administration has a guide that walks owners through how to sell a small business, from determining whether your business is salable to setting a value and choosing a successor. If you’re ready to make the move, talk with your broker and work with a qualified attorney and accountant to help you prepare for and structure the sale.
At least one company—brokerage giant Long & Foster Real Estate—is taking an active role. It has set up an agent succession program to facilitate sales for its agents. “It starts with having 100% trust in the other agent,” says Rich “Coach” Fino, director of agent success for Long & Foster in Chantilly, Va. “In the end, it’s a trust transfer.”
The succession program not only serves agents, it’s also a way for Long & Foster to retain market share when agents retire or transition to a new career.
Succession planning works best when the agents who are selling their business have a “next move” in life that they’re excited about and when they take the time to do it right, says Fino. Agents who are in a hurry to exit the business can opt for the one-time buyout, but Fino cautions, “they end up taking less for their business. Give it at least two years.”