Is Your Agency Prepared for Illness, Injury, or Death?

Do you have a plan to protect your agency and team in the event of illness, injury, or death?? What would you do if your partner died? What if you were hurt or sick and unable to work? How much of your agency is dependent upon you for the day-to-day operations? As agency owners, we often think about our exit plan, but it’s also important to plan for the unexpected.

In today’s episode, we’ll cover:

• 2 things to protect your agency from the unexpected.
• The key to protecting your agency’s acquisition.

Today I sat down for an interesting chat with Eric Meyers, former CEO of a $40 million digital marketing agency. Back then, Eric found himself trying to navigate a pending merger as well as a transfer of ownership after the sudden death of his agency’s founder. He’s here to talk about what he learned through the process and what you can do to protect your agency from the unexpected.

2 Things to Protect Your Agency from the Unexpected

Take a minute to think about what your agency’s future looks like. Where do you want to be in 5, 10, or 20 years? Is that future still possible in the event of a sudden illness or injury of an agency leader? What about the death of your business partner? These things aren’t fun to think about, but the truth is when you own a business you have to consider and plan for the unexpected.

When Eric took the role of CEO at an agency, he never expected the founder would be involved in a tragic accident after only three months on the job, but that’s what happened. As a result, the owner’s family took control of the agency. From there, a pending merger fell apart and the agency went up for sale within six months. So how can you protect your agency from unforeseen changes?

1. Create a Buy/Sell Agreement. If you have a partner, a solid Buy/Sell Agreement is critical. It protects both partners’ interests and keeps things simple during times of uncertainty. You signed up to work with your business partner, not his or her family. A Buy/Sell Agreement helps ensure you have the funds to buy out your partner’s family so you retain control over your agency.
2. Purchase disability insurance. Would your agency survive if you had to take a sudden leave of absence due to an injury? Would you be able to pay your own bills? This one may seem obvious but it’s often overlooked. It’s a low-cost way to protect your business and your family.

The Key to Protecting Your Agency’s Acquisition

One of the major problems at Eric’s agency is the acquisition fell through at the last minute. This could have been prevented by a rock-solid Letter of Intent. A Letter of Intent helps all parties understand what they are getting out of the purchase of the agency. Eric says you shouldn’t assume you can do it on your own. You need someone guiding the process and helping you navigate the unknown. It’s even a good idea to make sure you have legal representation to look over paperwork and contracts.

Another way to protect yourself is to set up an escrow account with the Letter of Intent. The amount in escrow depends on the amount of the sale. Then, if everything before the Letter of Intent turns out to be true and one of the parties backs out, the other party receives financial compensation.

Don’t forget, an agency sale is not the time to slow down. You need to keep your foot on the gas. You need to excel in servicing existing clients and continue to fill your pipeline. That way, in the event the sale falls through, your agency is in a good position to thrive.

Nobody likes to think about the worst-case scenario, but as a business owner, you have no choice. When you take the time to make sure you have the necessary precautions in place, you’re investing in your agency’s future.

Looking for a Payroll and HR Solution for your Agency?

Payroll and benefits are hard. Especially when you’re a small business. Gusto is making payroll, benefits, and HR easy for small businesses. You no longer have to be a big company to get great technology, great benefits, and great service to take care of your team.

For a limited time, Gusto is offering a deal to Smart Agency Master Class listeners. Check out Gusto.com/agency for 3-months FREE once you run your first payroll with them.

What’s Next For Your Agency

In order to create the best agency possible, you need to have processes in place when you are faced with the worst of illness, injury, or death. As you grow, you will without a doubt come across other challenges — this is where I can step in.

I have advice for agency obstacles such as recognising common agency mistakes, how to keep great agency employees in your team as well as fostering the connections made with clients. If it’s challenging growing your business, I have agency growth hacks, the best ways to improve management of your business as well as why building a remote team can be beneficial in the long run.

Learn more about my career as well as tips, tricks, and insights by checking out my blogs that cover a wide variety of topics.

You can learn more from my experience from my Ask Swenk series and my videos on my Youtube channel. Check out advice and learn even more from other successful agency experts featured on Smart Agency podcast twice every week.