Verifying Income is a Challenge when Buying or Selling an Insurance Agency

When listing an insurance agency for sale, you’ll be approached by buyers asking for a variety of information. One of the items they’ll ask for is an income and expense statement and/or commission statements for the past 3-5 years. When you show this information to a buyer is up to you, but at some point, they’ll require these documents in order to close.

Even if you or your Bookkeeper enter commission income into a software program, buyers will want to reconcile the numbers against the actual commission statement. Sellers can rarely produce 3 years worth of commission statements although some do. Some owners balk at the idea of producing this much paperwork and unfortunately, in some cases can’t sell their agency.

We’re not saying your agency isn’t saleable if you can’t produce 3 years of commission statements. There are other ways to verify revenue and there are ways to prove your income, but the commission statement is by far the best and most preferred.

The first impression a buyer gets from your agency is the condition of your accounting. If your accounting is in poor condition they’ll assume the rest of your operation is and won’t pursue the acquisition.

One of the services we offer is assistance gathering statements, bills and other criteria requested from buyers. We enter in electronic form to create an income and expense statement catered to your insurance agency.  The first impression to a potential buyer is positive and it significantly increases the probability of selling the agency for the price you expect. This information also helps you make an informative decision when determining the asking price of the agency.

7 out of 10 Businesses listed for sale in California never sell. Increase your odds of selling your agency by being prepared. Please contact us if you have any questions about the process of selling your insurance agency.

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