to ride the wave to financial advantage by selling their businesses.
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This article is a summary of a white paper entitled “Selling an insurance agency: How to get the right price from the right buyer.” The full white paper can be downloaded at oakstreetfunding.com/sell.
Reasons to sell Selling an agency is often associated with plans to retire or start a new venture, but there are other reasons to sell. You may be ready to spend less time on your agency, ready to take your agency to the next level but lack capital, or want to be part of a larger organization. Or perhaps you’re in your 50s or 60s and thinking ahead to retirement, but don’t want to abruptly end your career. Whatever the reason, it’s important to get a price and buyer that align with your goals. How can you best position and sell your business?
Give yourself plenty of time For optimum results, preparing an agency for sale should begin at least two to three years before you put it on the market. There are a number of financial and management factors to devote
s a wave of consolidation readies itself to sweep the insurance agency business, more and more agency owners are hoping
special attention to during this period and it’s a good time to begin assembling a support team of advisors with experience in agency mergers and acquisitions, such as a business attorney, tax consultant and CPA.
A year or two before you intend to sell, start developing a selling strategy. Assess your strengths and weaknesses by looking at your technology, producer productivity, carrier relationships, reputation, etc. Develop a financial platform that includes the fair market value of your agency, an assessment of comparative profitability and performance, and a determination of the most advantageous sale structure (leveraged buyout, earn-out or seller-assisted).
Seek a buyer Do you know a family member, employee or business contact interested in the agency? If so, don’t exclude this potential buyer because of a lack of cash or less-than-perfect credit. Newer forms of financing may allow a mutually advantageous deal to be struck.
A qualified business broker can generate interest for you, pursue leads and help negotiate the best deal. If you’re working on your own, there are free online marketplaces where you can list