Kelly recently closed a deal to sell his company, Kelly Financial of Madison, to
"A big part of the insurance business is succession planning," said Kelly, 59. "I've come to realize that I always was frustrated when I saw good companies that struggled with succession planning and didn't do their succession planning."
Kelly has no children to whom to pass his business and in recent years concluded it was time to come up with a plan to ensure the business' future and keep its staff employed. About a year ago, Kelly said, a friend introduced him to a representative from Gallagher.
He appreciated the company's approach of looking for businesses interested in selling only if current leadership and staff stayed on after the purchase.
"I liked the idea that they wanted the entrepreneur to stay and help them to continue to grow the business but with the idea that I would step aside sometime down the road," Kelly said. "That's a lot different than selling it and then turning it over right away."
It ensures continuity and allows Kelly and his team to continue working with existing customers, while also introducing them to Gallagher.
Kelly said the toughest part for entrepreneurs when they sell their business is giving up control.
"A lot of effort and thought goes into selling a company, and it takes time away from being productive and growing the business," he said. "But now that is taken care of, and I feel it's safe to say everyone here at Kelly Financial can look forward knowing that whenever Scott decides to hang it up, they still will have a place to work."
Gallagher looks forward to working with Kelly Financial.
"Scott has built a phenomenal team that is highly regarded for their expertise, which strengthens and expands our retirement consulting services across the
Kelly said Gallagher's resources and services also will provide additional products for his team to market to current and prospective clients.
While Kelly faced few hurdles in deciding to sell his company, it isn't always the case with a family-owned business.
Family dynamics can complicate matters when transitioning a family-owned company from one generation to the next, said
"Sometimes it's difficult for a company founder to just step aside and hand over control of something they built, even if it's to another family member," Herwig said. This is why developing a succession plan often is delayed.
The more time put into succession planning the better, Herwig said.
"The benefit of starting the process sooner is you have time to groom and train someone and prepare them to take over," she said.
Generally a first step in succession planning, especially with a family-owned business, is for family members to discuss the future of the business.
"When the family just sits down, sometimes the answers you get may surprise you, or the process goes smoothly," Herwig said. Then as planning gets more involved, trusted advisers including legal counsel can guide and formalize the process.
"Succession planning is a process, and while some legal documents may be created, it's really not the end result," she said. "(Conversations) will be ongoing."
Kelly Financial evolved from an insurance business launched in
Despite his family connection to the industry,
Kelly had interned for
"My dad was thrilled that I had these opportunities with these large corporations," Kelly recalled. In the end, working for large conglomerates wasn't for him.
"I remember talking with my dad and telling him how I didn't think I wanted to work for a big company and really liked the small office environment of his business," Kelly said.
But Kelly wasn't handed a job. Kelly's father owned his business but those who worked in his office were sole proprietors or independent agents.
It was a great arrangement, he said.
"I wasn't relying on my father for income and he wasn't making judgments on how I spent my time," he said. "We could just be father and son and could just support one another."
As with any other business, growth meant looking for new opportunities. From personal and business insurance, John Kelly began offering group health insurance plans, which was a new service for insurance businesses in the 1980s.
A new era
That same year, he acquired another Madison-based insurance and financial services business owned by
The merged businesses operated for about five years as
By that time,
In 1999, Kelly built a new office at
Kelly said when he got into the insurance business, transactions with clients were conducted in their homes, usually at the kitchen table. These days, clients either come to his office or he visits clients where they work.
Personal contact with clients remains a constant with insurance sales and financial services, Kelly said.
"Some things have changed but it's still people dealing with people," he said. "If it still wasn't about that, it wouldn't be any fun."
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