SUCCESSION PLANNING FOR INSURANCE PROFESSIONALS...© 2017 FP Transitions, LLC. 12. SUCCESSION PLANNING SCHEMATIC. 12. Tranche 1. Tranche 2. Tranche 3. Tranche 4. Restructuring of .

SUCCESSION PLANNING FOR INSURANCE PROFESSIONALS

DAVID GRAU SR, JDPRESIDENT, FP TRANSITIONS

1) BUILD A SUSTAINABLE BUSINESS2) STRUCTURE FOR GROWTH3) CRAFT A SEAMLESS TRANSITION

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WHAT HAVE YOU BUILT?

Book Agency Business / Firm

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A SUSTAINABILITY CHALLENGE: PREVENTING BRAIN DRAIN

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A SUSTAINABLE SERVICE MODEL

Structure your business and its organizational, entity, and compensation systems so that there is no way for an individual to do well unless the organization succeeds as a whole.

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G2 G2

G3G3G3

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STRUCTURE A SUSTAINABLE TEAM

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G2 G2

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IDENTIFYING TALENT FOR A SUSTAINABLE TEAM

Underwriter | Customer Service | OrganizerRepresentative

Entrepreneur

Producer | Underwriter

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THE STRUCTURE FOR SUSTAINABILITY AND GROWTH

ORGANIZATIONAL STRUCTURE

ENTITY STRUCTURE

COMPENSATIONSTRUCTURE

PROFIT & GROWTHSTRUCTURE

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THE CASH FLOW AND COMPENSATION

Revenue AssignedInto Entity Structure

Expenses

Wages, Compensation ENTITY

STRUCTURE

Profit Distributions

(perform 3 functions)

Equity Income

Equity Value

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EAT WHAT YOU KILL V. EQUITY COMPENSATION

Gross Revenue: $ 1,000,000

Expenses: $ 500,000

Comm. Share / EWYK: $ 500,000

Profit: $ 0

Gross Revenue: $ 2,000,000

Expenses: $ 700,000

Salaries / Comp: $ 700,000

Profit: $ 600,000

COMMISSION MODEL EQUITY MODEL

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SUCCESSION PLANNING SCHEMATIC

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Time (in years)

10 15

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SUCCESSION PLANNING SCHEMATIC

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BANK FINANCING

Update Bylaws, Buy-Sell Agreement Hybrid-note structure Fixed or Hard-Note structure

Discount applied; Profit-based note

Bank Financing

G2: Planned Owners

G3: Potential Owners

G1: Founding Owners

THANK YOU

www.fptransitions.com(800) 934-3303

[email protected]

www.oakstreetfunding.com (866) 625-3863

[email protected]