'Do it sooner rather than later': The importance of succession planning

Louisa Sanghera has highlighted the importance of a succession plan to The Adviser after countless health battles spurred her to implement one.

Ahead of the Women in Finance Summit 2023, the principal broker at Zippy Financial said she has designed a robust succession plan in the business after facing ongoing life-threatening health issues.

She will elaborate on the importance of succession planning at the summit, and offer practical tips on how other businesses could implement a robust plan. 

“I always knew as a broker that I’d either sell my business when I retire or I’ll keep an admin person on and maintain my book. But I never thought about getting sick, and thinking about what would happen if I dropped dead tomorrow,” she told Super Review.

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Her first and primary task in her succession plan, she said, was to train her senior broker support manager Tracy Pollard to operate the business if she can’t, thereby eliminating key personnel risk.

“I know Tracy can run the business because she used to run her own businesses. Lots of people are capable of doing the job but they may not be able to run a business,” Sanghera said.

“When I’m sick, she manages the business, the team, and everything else. I’m lucky because she’s probably the closest version of me that I’ll get. We’re on the same page on most things and think the same way.”

As part of the training process, Sanghera said she also introduced Pollard to external companies that provide support across different areas of the business, including human resources and staffing, IT, accounting and bookkeeping.

“I’ve trained Tracy on what to do with those connections. She understands all the businesses that look after us now and can manage everything for our business,” Sanghera said.

Furthermore, Sanghera has provided Pollard access to her private files in the event she is absent from work so that Pollard knows where to find everything, who their contacts are, and who is supporting the business.

In addition to this, Sanghera said Pollard has agreed to buy Zippy Financial from Sanghera should something happen to her, which she said has given her peace of mind.

While implementing a succession plan as soon as possible is vital, Ms Sanghera cautioned business owners against rushing the decision to choose successors.

“Remember that you might potentially hand your business over to this person one day,” she said.

“Recruit that person slowly. Make sure it’s the right person. Make sure you document everything and train that person thoroughly.”

She also warned that because brokers and other professionals are always busy with servicing their clients, implementing a succession plan could take longer than anticipated.

“You might think it’s going to be a quick job but it’s about finding the time to go through everything,” Sanghera said.

“If you’ve got somebody who’s going to take over your business, it’s a huge training job. The sooner you start the process, the better.”

While acknowledging that succession plans would look different across various professions, Sanghera urged business owners to find a successor with similar skill sets, including the ability to operate a business, along with technical skills.

“You want someone with the right skill set who you can also completely trust,” she said.

“That’s not always easy to find.”

This is particularly challenging for sole practitioners who do not have staff to train. To address this, Sanghera suggested they could connect with other sole practitioners and agree to manage each other’s clients should one become indisposed.

“Before I had staff in my first and second year I connected with a couple of brokers. We agreed that we’d cover for each other. It helps if you’re with the same aggregator,” she said.

She concluded: “If we give each other a leg up and share information we and our industry will do a lot better.”

To hear more from Louisa Sanghera about how her personal struggles highlighted the importance of succession planning in her business, come along to the Women in Finance Summit 2023.

It will be held on Friday, 10 November 2023 at The Star in Sydney.

Click here to buy tickets and don’t miss out!

For more information, including agenda and speakers, click here.