You probably have seen the life insurance commercial that leadswith the commentary that 10,000 Americans retire every day. Newsflash: some of that number is insurance agency owners andprincipals. Recent studies indicate that approximately one-third ofall agency principals are older than age 55 or plan to retire inthe next 10 years.

Our industry is poorly prepared to internally absorb that muchequity over the next 10 years and beyond. The system simply has notdeveloped the people power—the next generations to acquire theequity of the retiring principals and lead those firms into thefuture.

Many principals view perpetuation not as a process but as anevent, something they can accomplish in the next year or two. Thereality: You need 10 years or more to get the right people inplace.

If you are at the back end of the boomer generation and haveabout 10 years to get your plan in place, run—don't walk—andrecruit and train talent who will enable your exit. It is an oftenarduous process that you will need to commit capital to make itwork.

If you don't have the benefit of the 10-year window, prepare forthe firm to be sold. Your value resides in the strength andviability of your earnings. Clean up the financial side of thehouse; make sure your books and records are accurate, including thebalance sheet. Watch the expense side of the ledger and make iteasy to identify non-recurring and other soft-dollar items. Makesure you have the right support staff in place. Replace weakplayers and eliminate the extraneous.

Depending on the situation, you may want to be at the front endof the sell side cycle as the inventory of prospective acquirersmay diminish over time due to all the inventory of sellers or theymay simply be able to push down on pricing as they capitalize on abuyer's market.

And for those younger than the boomer generation, don't fallinto the trap of your senior brethren. Embrace with gusto thenotion perpetuation is a process and not an event.