How do you Sell an Independent Insurance Agency or Book of Business? Over the past 12 months, our firm has received 32 buyer inquiries to every one seller, so sellers are in luck!The demand for small to medium sized standard or preferred agencies is greater than it’s ever been. Personal, Commercial and Benefits Agencies and Books of Business are in high demand, but it’s easy to turn off the most qualified buyers if you’re unreasonable or difficult to work with. Pricing the agency aggressively is good practice. Pricing the agency too aggressively, can lead to losing the interest of the most qualified buyers and limit your options.
The buyer you’ll be limited to is the least qualified. What we’ve learned from completing 70 deals over the past 10 years is that unqualified buyers; meaning those that need loans, carrier appointments and other contingencies are usually willing to over pay, but rarely, if ever close the deal. While you’re spinning your wheels with Mr. Unqualified, the cash buyers with the markets and no contingencies moves on. When you eventually return to the qualified buyer 2-3 months later; the offer has decreased and you’ve lost leverage in negotiations.
Not to sound biased here, but the best way to sell an insurance agency is to hire representation. Whether it’s Ganis Consulting or another firm, an intermediary will net you more money than you will on your own. We can say things to buyers that you can’t. We can play the bad cop during negotiations. We can follow-up and be more aggressive when asking for written offers and proof they’re qualified. When we do this it’s “The Broker being a Broker”, when you do it, “Something must be wrong, this seller is desperate”. Hire representation – it’ll pay for itself and you’ll know it’s done correctly with minimal liabilities post sale.
There are dozens of ways to structure insurance agency deals and there are pitfalls along the way that can cost sellers time and money. Most insurance agency buyers have done more than one deal in their careers, but most insurance agency sellers only sell and insurance agency once. This puts the seller at a huge disadvantage so representation not only helps you maximize value, but enables you to continue running your agency during the transaction.
If you’re selling your agency now or in the next year, feel free to contact us for a free consultation. 95% of the time, we charge no fees until the sale is made, so if you don’t sell, we make zero.
Click here or call 800-528-1325.