In 2010 an article of mine on Exit Planning was published by the Manufacturers Agents National Association. One paragraph from that article is:
“If I’m a manufacturer I would be very concerned that my sales team (my rep team) will be still be there in five to ten years. I have a lot invested in them and their customers. Given the non-compete agreements many rep firms may have it may be a lot tougher to replace my rep firm than to replace a sales staff. I want to be sure you have taken adequate steps to assure a smooth succession with no disruption to my business.”
In a discussion recently another professional told me that a major manufacturer approached a client of his (a subcontractor) and asked what their plans were for the business and if they had insurance protections on the owners and key people. This manufacturer was concerned that this important vendor could cause a disruption if an owner died or the business closed.
The point here is that it doesn’t matter if you are the sales arm of a manufacturer, a manufacturer or a service business. Your customers, if they actually think about it, are as concerned with the future of your business as your employees and you are. You are an important part of their operation and they should be concerned with your succession planning.
Ask yourself, what would you do if a key vendor or customer went away? An owner of a contract manufacturer was referred to me recently and they had lost their top customer that did over 50% of their annual sales. Wow! On the flip side, they were the only supplier to this customer. What if it was reversed? What if the contract manufacturer closed up shop and left this customer in a lurch?
My advice is to not put your vendors or customers in a precarious position by having them worrying about where you will be in a few years. If you are getting close to the age where others will wonder how long you plan to keep working it is definitely time to do some exit/succession planning.