How to Approach the Succession Planning Process, with Drew McLellan
Drew McLellan discusses the best approach to the succession planning process so agency owners can build a realistic exit strategy.
- How to approach the succession planning process
- Why succession planning is a long game, and how to set yourself up for success
- Common mistakes that agency owners make in the succession planning process and how to avoid them
- How each type of exit strategy impacts the agency from a financial perspective
- The drawbacks to succession planning for smaller agencies
- How to approach the later stages of succession when you are ready to find a buyer
The Succession Planning Process for Agency Owners
For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies, and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops and more. In this episode of the Progressive Agency podcast, Drew joins us to share his journey and talk about the succession planning process for agency owners.
Running Your Business in Alignment with Your Exit
After the pure chaos of 2020, many agency owners have begun the succession planning process with a great sense of urgency. The problem is that a lot of the people who have approached Drew to get advice on this process are not ready. In order to have success with succession planning, you have to start running your agency through a slow transition. This can take years to accomplish, but in doing so, you will prepare your agency for the drastic change of changing hands, changing leaders, or even dissolving completely.
Preparing for Change
The average agency size in the U.S. is 8 employees. Size is an important consideration in the succession planning process because smaller agencies are not necessarily going to attract the same opportunities or buyers as larger ones. In addition, the owners are often an integral part of the business, so when they step away from the picture, the value of the business is greatly diminished. In this scenario, wealth-building outside of the business is an extremely important piece of the exit. The moral of the story is that each and every type of exit requires an entirely different approach from a financial perspective. As always, please visit me at www.theprogressivedentist.com for more informative, money-saving podcast episodes like this one.
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About Drew McLellan:
For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops and more.