As you enter a real estate partnership, it is important to cover all your bases in regards to potential changes in your business’ future. A solid succession plan for your real estate partnership will ease the process of changing leadership roles as your business evolves.
The change in leadership reflects the character and effectiveness of the business as whole. Which is why a succession plan is essential. A succession plan outlines how one leader will replace another within a business. You will want a written succession plan to ease confusion. It’s usually best to use internal candidates to fill leadership positions. There are numerous benefits of having a succession plan. A clearly defined succession plan for your real estate partnership reduces potential conflict. It also helps partners decide which employees are prepared to move into leadership roles.
Here are a few tips on developing a Succession Plan for your Real Estate Partnership:
- Assess internal candidates. As you train and mentor other real estate agents within your business, note their positive qualities. Also, look for leadership qualities in each candidate. Don’t single out a favorite employee and put them on a pedestal. Consider all candidates and try to view the situation objectively.
- Develop criterion. Don’t wait for a crisis to occur before deciding the which characteristics are essential in leading your real estate business. Create a list of necessary and preferred qualifications, and consider the benefits of differing viewpoints and backgrounds. Put these criterion in your succession plan. When your real estate partner and you discuss potential candidates you can refer to the agreed criterion.
- Consider all stakeholders. The real estate business is competitive. As you are developing the succession plan for your real estate partnership, consider how any changes will affect the other partner and the employees that work for your business. Consider these questions as you plan: Is there an emergency candidate who could take the reins if you or your real estate business partner were to leave tomorrow? Which employee could you invest in now so that he or she is prepared to take over? Is the company organized enough to handle the transition of a new leader? Do you have a seasoned real estate agent who is willing to coach a potential successor?
- Prepare the potential candidates. Perhaps the most neglected step in the succession planning process is preparing the candidate for his or her new responsibilities. There is no such thing as a “ready now” candidate. All candidates will need mentoring and training to assume a leadership role. Make sure the candidate for the position has the support they need to learn, grow, and stretch their capabilities.
- Consult a professional. Choosing future leaders for your company will primarily be done by you and your real estate business partner; however, professional, objective, advice is important to the process. A good accountant can help you analyze potential profitability of a candidate. He or she can also suggest how much to invest int the candidate to prepare them to take on a new role.
- Refresh as needed. The succession plan for your real estate partnership should be a living document. Change and modify your succession plan as market conditions and strategies change. It should go beyond the traditional position description and delve deeply into the knowledge, skills and abilities required for the next leader. You can then use the succession plan to objectively grate succession candidates.
Developing a solid succession plan now can help ease the transition of changing roles later on. In addition to a succession plan, you and your real estate partner should develop an exit strategy to ease any future transitions within your business. Read more about how to develop an exit strategy, here.
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