A long time ago, agencies thrived by simply writing enough policies, attending enough meetings, making enough contacts, and representing enough companies. It just happened. This is no longer the case. Regardless of how long the business has been in operation, which generation started it, or which family members run it, there must be a for-profit business mind-set. There are also some important issues to review.
STAFF
Have employees been encouraged to develop their technical skills, pursue licensing, take continuing education courses that address client issues, and achieve designations that enhance their ability to provide technical service? What about such professional skills as time management, organizational ability, communication, and selling? You’re reducing your business’ value when you don’t encourage employees to perform at a higher standard than the industry average.
MANAGEMENT STRUCTURE
How many family members are running the agency? Is each in a role that best matches their skills and interests? Is each in a clearly defined position with the authority necessary to lead the agency in that area? Does each family member perform their defined functions with support from other family members? The agency’s value suffers when the staff sees management divided, directives ignored, and change avoided. Ultimately, this reduces productivity.
FUNDING
Does the agency underpay staff to offset money it directs to family members? Is the agency funding family vacations, cars, and homes at the expense of the agency’s future? There’s no denying that agency owners are entitled to compensation for the risk they accept. But staff compensation, education, and resource funding are also important.
These are issues that will diminish the value of the agency in a sale or merger. A successful business needs strong leadership with clearly defined direction and resource allocation to make it a reality. It requires the efforts of all employees. When caught in the midst of family dynamics, employees either become part of the problem or give up and do only what’s necessary to get by.
Many family businesses are successful. For a lot of them, success comes only when they separate family and business, at least during office hours. Is your agency a thriving business or a dysfunctional family?