Succession planning for any business, such as Waystar Royco, depicted in the TV show Succession, including real estate firms, is the process that helps decide who will take over the business when the key leaders and owners (like Logan Roy) leave or pass on. Succession planning is one of the important details that too many real estate business professionals fail to consider.
Business owners and leaders tend to focus on the problems and complicated issues immediately in front of them, putting off addressing crucial long-term plans that ensure the longevity of their business.
Why Create A Succession Plan For Your Real Estate Business
The main problem with failing to develop an effective plan for succession in the real estate industry is that change happens fast. Your firm might not get a second chance in case it fails to adapt quickly when a key player, such as a family patriarch like Logan Roy, leaves the company.
Today’s real estate firms face many different challenges in the modern dynamic global economy. Note that some of these challenges are technological disruption and rapidly shifting client demands. Some real estate business owners just assume that a family member will take over the business. However, it is best for real estate firms to devise a formal plan and also discuss any issues and problems with the potential successor they have in mind. This will also make sure that family members don’t start vying for prominence within the organization as depicted in Succession.
As new generations who are eager for advancement opportunities in the company enter the workforce, leaders have to think long and hard about important strategies in order to create a strong pipeline of visionary leaders. Succession planning for a family-owned real estate business is a process of identifying, training and developing employees for filling the responsibilities of roles within the business.
It is also worth noting that business succession planning for real estate firms is multifaceted, and often many of an owner’s preparations and considerations depend considerably on who will take ownership of the real estate company.
Succession Planning Tips
1. Assess All Candidates
Never show any preferential treatment to certain family members. As you mentor and train other real estate agents, including your children, in your business, you should note their positive qualities. You should also look for leadership traits in each candidate without letting your bias get in the way. Do not single out a favorite person and put them on a pedestal.
2. Consult A Professional
Although you primarily will choose future leaders for your real estate company, professional and objective advice is important to the process. Lawyers, financial advisers and accountants can help you put together an excellent succession plan.
3. Consider All Business Stakeholders
It is no secret that the real estate industry is competitive. While you’re creating the succession plan for your real estate business, you should keep in mind how any changes will impact the other employees who work for you. You should not keep important things from your employees and other stakeholders. This is because, as shown in Succession, secrets eventually come to light.
It is important to consider some of these questions as you plan:
• Is your real estate company sufficiently organized to handle the transition of a new leader?
• Do you have an emergency candidate who has the potential to take the reins in case you were to leave tomorrow?
• Do you have a competent and experienced real estate agent who can coach a potential successor?
4. Train Your Successor
You cannot expect your successors to take over and successfully run your business if you have not spent any time training them. Your succession plan will have a higher chance of success if you work hard with your successors for a year or more before handing over the reins.
Benefits of Succession Planning
1. Peace Of Mind
By appointing a successor, you can get peace of mind while running your real estate business. As you, the company owner, have taken out the resources and time to carefully choose this person to run your real estate company, you can rest assured that it is in good hands whenever you leave.
2. Identify The Most Competent Future Leaders
Succession planning for your real estate business requires your company to:
• Identify positions that are most critical to the success of your company.
• Identify all internal candidates, including your children, with the skills, values, desire and passion to take on these critical jobs and speak with potential candidates about their plans and interest.
These important steps in a succession planning process have several benefits for your business. A close, thorough look at your organizational chart will help your leadership better understand potential vulnerabilities, which can bring a renewed sense of urgency to cross-train important employees in specific roles.
3. Lower Expenses
Hiring externally is an expensive and lengthy process that involves advertising, evaluating and training. Proper succession planning can keep costs down in this regard. Also, hiring or promoting from within will make a positive impact on your bottom line and culture.
4. Eliminate Confusion
It is worth noting that succession planning helps eliminate confusion regarding who will carry on the legacy of your real estate business when you’re no longer there to make decisions. The succession plan outlines specific details of importance (like the transfer of ownership for assets and business bank accounts) for a smoother transition of power between the owner and the successor. You should also know when to hand over the control so that it does not provoke a huge power struggle between the different members of your family, as we see in Succession.
Final Thoughts
Real estate companies can use succession planning to ensure all the important roles within the company are filled in a timely manner. It not only provides a safety net for your real estate company, but succession planning also offers great benefits for your staff as well.