Planning your succession plan early

RCS Influencer Randy Chaffee says business owners should create a succession plan three to five years in advance.

Editor's note: The following is the transcript of a live interview with Randy Chaffee of Source One Marketing. You can read the interview below, listen to the podcast or watch the recording.

Alex Tolle: Hello, I'm Alex Tolle back here for another Roofing Influencers response with my good friend, Randy. How are you, Randy?

Randy Chaffee: I'm great and you? Awesome.

Alex Tolle: I'm doing great. So November, I can't believe we're in November already, November, 2025. What are the best practices for creating an effective succession plan for a roofing business or just any business?

Randy Chaffee: Well, yeah, I think probably for all businesses, it's about the same. And I think the first thing probably, Alex, is most owners forget to focus on it. They're focused on the job, the next job, payroll this week. What's my next marketing campaign, whatever's going to happen. And I think there's a challenge. And this is what I see and observe because I haven't done this personally, because I'm going to do what I do forever. So I don't really worry about a succession plan that much, but I probably should.

You need to start thinking about it before it's time because that's not something you can just do, like, you know what? I'm going to retire, next week or next month or next year even. You've got to start well before you need to. And so, identifying the talent, I think, is one of the first things. What are you going to do? Are you just going to sell it on the open market? That's a different story. Basically, get your P&Ls in order and look for the right time, get some people to help you sell the business. You dump it for the most money you can, right? And go live in the Bahamas or someplace. But if your succession plan is either family members or people within your organization, I think you need to identify that early. Because again, you have to start training these people if you want it to be successful for the people that take over.

And whatever your involvement is going to be after you sell the business — maybe you're going to sell it on time, maybe you're going to keep certain ownership, whatever that looks like — if you don't identify and start training those people well in advance, and I'm talking years in advance, this should be in my opinion and everybody I've talked to, I've got some good friends that do this sort of thing for people. It needs to be three to five years out. You need to start thinking about not necessarily putting it down to nuts and bolts on the 31st of X month I'm gonna sell, but you need to start figuring out somewhere in the three to five year range, we want to start making this happen.

So what do do today? It's really, get your house in order. And I think another part that if you don't want to disrupt things within your organization as you want to continue to grow and make the most money when you sell, whether it's internally or externally, is keep the house in order and communicate.You need to communicate with your top people because that becomes a scary thing. Okay, Bill's gonna sell Bill's Roofing. What's that mean for me? Who am I going to be? Then you start losing good people because they get scared. They think I'm not going to have a job. They're going to take the next opportunity. And then you lose some of those people that are going to be key to whether you sell it again internally or externally. So I think that's the big thing.

And it all comes back to that keeping the culture, right? We've talked about that in other talks. If you talk early, think early, plan early, communicate with your people and maintain that culture even though you're moving towards a change. Because even if the change isn't going to involve internal ownership, any of your people within your business that's going to maybe buy it from you or family, you're just going to put it on the open market. I think the more you communicate with those folks and help them understand where you're at, the best for them and the best for you is when it comes time to make that sale, whenever that is, you want those folks on board. And you'd hope that the people that buy the business, whether again, internal or external, are going to keep your key people. And so the key is, don't let those key people leave you once they get a little bit gun shy, because they don't know what's going on. Secrecy in the smoke-filled backroom behind the parlor saloon and the old Western days doesn't work in today's transparency-driven world. So that's my take on what people should do. Do it early, man. Do it early.

Alex Tolle: Yeah, yeah, it's so important if you've built this great team. And if you want them to be able to take over the business, you got to keep them in the loop and make sure that they know that they're a part of the future of the business.

Randy Chaffee: Exactly, because it really is the people. Let's face it. Everybody, at the end of the day, anybody can buy shingles or metal or clay tiles, metal, and with some decent training can get it on a roof, and it's probably going to be okay. It's the people that makes the business, right? And we don't want to lose sight of that. You're not selling just equipment and trucks in warehouses and inventory, office desks and computers. That's just stuff. Stuff can be replaced all day long. You're selling the culture and you're selling the people. And that's if I'm a buyer, that's what I'm going to look for. Because again, I could go build a new building myself and buy some equipment or lease some equipment and be a builder, a roofer, right? But that's not what I'm buying. If I'm buying an established business, I'm buying the clientele, I'm buying the good name, I'm buying the reputation and I'm buying the people. So I think it's important to keep that on board.

Alex Tolle: Absolutely. Thank you so much as always, Randy.

Randy Chaffee: Great to be here. Alex, good to see you.

Alex Tolle: Good to see you.