3 Tips for When It’s Time to Move On: Selling Your Insurance Agency

3 Tips For When It’s Time To Move On: Selling Your Insurance Agency
By: Michael Miller, Smart Choice® State Director

You’ve spent your career helping families and businesses mitigate risk and protect their assets and loved ones. You have a full book of business, wonderful staff, and a great office. But not it’s time to move on. What will happen to the insurance agency you’ve worked so hard to build?

Here are three tips that help take the mystery out of selling your insurance agency.

1. Get an Insurance Agency Valuation

You’ve been busy growing your agency and working hard to make it profitable. But do you know what your agency is worth? Determining your agency’s value is the first step in selling it. Take into account the contributions of your producers and other staff, your agency’s location, the quality of the markets you offer, and the diversity of your book. Are your eggs thrown in the baskets of a few big clients, or is your risk spread out across many different accounts?

2. Have a Plan for Selling Your Agency

Planning the sale of your agency starts early, as many as three years before you hope to close the deal. You need to hire the right team to help you through the process, starting with a good business attorney. The first step is to complete the valuation. This gives you time to remedy any issues that arise from it. Then comes the research into potential buyers, negotiations, and closing the deal. All these steps take time. Don’t wait until you’re ready to call it quits to start the process.

3. Know Your Sale Options

Agency owners may choose to sell their agencies to an internal buyer, such as a producer, or an external one. When you sell your agency internally, your buyer may choose to take out a loan to buy the agency outright. This is called a leveraged buyout. Or, you may work out a deal where the buyer pays you incrementally until he or she fully owns the agency. This is called an owner-financed transaction.

Some external sales are roll ups. This happens when another agency absorbs yours into its existing structure. Other times, a buyer purchases your agency outright and moves right in without changing staff or location. On the other end of the spectrum, a book buy occurs when a buyer purchases just your list of customers, not your staff or your physical agency.

Selling your agency can be complicated, so it helps to have a great team on your side. Smart Choice® agency partners have the freedom to sell or transfer their agencies as they see fit, including to family members or agency employees or producers. We’ll even help you sell your agency for free, saving you in business broker fees. Contact us today to discover why a partnership with Smart Choice® is the smart choice


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