“With advancing years, a manufacturers’ agent may be confronted with a problem peculiar to the nature of his business. Briefly stated, it is this: What becomes of his business, his valuable customer list, contacts and contracts when he is obliged to retire, or when he dies? Obvious answer: His business is sold.”
Scott Howells knows the importance of a good succession plan.
That scenario, outlined more than 60 years ago in an issue of The Agent and Representative — now Agency Sales magazine — rings as true today as it did then. And, if there’s any doubt that history repeats itself, have a conversation with Scott Howells, who’s gone through the exercise twice — first, when he took over Energy Solutions, Inc., Elkhorn, Nebraska, several years ago, and then again when he recently retired and turned over the reins of the agency to managing partners Adam Nelson and Mike Amfahr.
The agency’s founder, Charles E. Howells, started servicing utilities in Iowa and Nebraska in 1968, when he moved to Omaha as an A.B. Chance salesman for the territory. He worked with Chance until 1976, when he began working as a manufacturers’ representative. In 1982 Howells set up an independent manufacturers’ representative firm, C.E. Howells Sales Company. Howells Sales continued to grow and in 1997, the agency name was changed to Energy Solutions, Inc. The year 2012 marked the firm’s 30th in operation as the Howells Sales / E.S.I. firm.
Now, as then, the mission of the agency has remained the same: “The purpose of our business is to provide our clients quality electrical products and services to keep their systems safe, reliable and in business. We do this by focusing on the needs of our clients and by creating the most economical long-term solutions for their power requirements. Service and professional integrity with all of our clients and manufacturers have always been integral parts of our work ethic and corporate culture.”
Happily situated in retirement in Florida, Scott Howells recalls his start and two bouts of succession planning with the agency: “A couple of years after my father opened the agency, he asked me to join him. I was just starting out in my career and doing a little bit of this and a little bit of that. While I felt I really wanted to do something on my own, I agreed to give it a try.” That try lasted a good 35 years.
Charles E. Howells is the agency’s founder.
In describing what the relationship between father and son was at the beginning, Howells good-naturedly voiced some agreement that it was a little like what Mark Twain said many years ago: “When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.”
Adding his own words to Twain’s, he says, “I think there might have been pressure on the part of some manufacturers to have someone join the firm. As I look back on those early days, I’d say it was like so many other father-son relationships — there were some occasions when each of us thought the other might be an idiot. That was hardly the case, and now after 35 years, I’d have to say it was the best decision I ever made.”
Recalling his first experience with a succession plan, Howells notes, “I was probably the driver when it came to developing a plan. My father brought me into the firm as an equity partner. From the beginning we agreed that I would gradually be brought into all aspects of the business and when he reached 65, succession would take place. In addition, whenever we had our annual meeting with our attorney and accountant it was always emphasized that we should think about a succession plan earlier rather than later. There was really no big change in how business was conducted; it’s just something that happened over time. What I did do for our manufacturers, however, was to put a presentation together that spelled out what our plans were and how they would be rolled out. Manufacturers saw what was happening long before anything really happened. Likewise with new manufacturers that we represented, we’d use a modified version of that plan. This was all done to open and keep open the lines of communication.”
Adam Nelson, CPMR, Vice President
If things went smoothly the first time around, it sounds like the second succession experience was even better when he turned the business over to son-in-law Adam Nelson and Mike Amfahr. Once the succession plan was executed, Nelson serves as the agency vice president, and Amfahr its president.
“In my head there was really no difference in how we did it this time. I’d say we developed a similar plan and let manufacturers and customers know what we were doing well in advance. Perhaps, if there’s any difference at all, it’s that I got Adam and Mike thrust into the business at a faster pace. They assumed more authority early on and during the last year prior to executing the plan got them even more involved.
“While I might have had 15 years to learn all I needed to know, they successfully navigated a much quicker ‘super learning curve.’”
Part of that need to navigate a “super curve,” according to Howells, “is that the level of business activity when I took over was so much different from what it is in 2020; thus the need to speed up things.”
Howells was also quick to point out the importance of what he learned about succession planning from the MRERF CPMR program. It should be noted that Howells, Nelson and Amfahr all hold the CPMR certification.
“In my opinion what we went through was seamless and really painless. Obviously we had documents to sign and there were some tax consequences, but I really can’t recall any difficulties.”
Mike Amfahr, CPMR,
President
Howells’ take on the process is mirrored by both Amfahr and Nelson. Commenting on why having a succession plan in place is important, Amfahr, a veteran of more than 23 years with the agency, says that “In any business — and especially the rep business — it’s especially important to have a show of continuity. It’s a high priority for principals and customers, and the agency’s employees certainly want to see that there’s a plan for the future.”
Nelson, who joined Energy Solutions in 2006, adds, “In the business we’re involved in there’s a certain amount of fragility and there’s always people changing shirts from one team to another. When you’ve got a plan in place for the future that provides individuals with a certain sense of pride, not to mention putting employees’, principals’ and customers’ minds at ease.”
As Amfahr recalls working his way through the succession plan, he emphasizes that “Scott knew how important having such a plan was to principals and in crafting what we eventually did, the agency’s employees were uppermost in his mind. He was looking to execute a seamless transition and he simply sat us all down and got the job done.”
He does admit, however, “Perhaps at the beginning, Adam and I shared some concern in that we were just getting a little bit of information about the succession a little bit at a time. It seemed to us that we were taking ‘baby steps’ related to what the future was going to look like. I think that might be related to a reluctance on the part of the former owner to let go. I think it’s difficult to work so long on something and deep in your heart it’s hard to let go.”
In terms of when to start thinking about a succession plan, Amfahr emphasizes that “It’s never too early to put it on the tee and get things started. If there are any disagreements along the way, that gives you plenty of time to iron out differences.”
When it comes to actually communicating what was going on with the agency for the future, Nelson explains, “We’ve been messaging our plan over that last couple of years. Our principals have always been kept in the loop and with customers especially I made it a habit to begin any meetings with an explanation. I’d say something like ‘I’m Adam Nelson. Our company is involved with energy and for those of you who have a history of working with my father-in-law and grandfather-in-law, thank you for your business. Here’s what we’re doing and here’s the date the change will take place. We found that with that approach, everyone had an interest in continuing their business with us — they were invested in the future.”
And, speaking of the future, both Nelson and Amfahr haven’t forgotten what they learned about the recent past. According to Nelson, “Once Scott left the business, we realized that we had to immediately start thinking of the future and what we might do differently. Everything began to gel for us once we got the plan from Scott written in ink. We’ll plan accordingly.”
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