Most Agency owners realize that they must sell an insurance agency or their book of business at some point in time, whether due to age, health, a need for capital, burnout, or a desire to perpetuate the agency while making a timely exit. (click here to see Reasons People Sell chart)
Many sellers, however, are not able to do a very good job of selling their agency since although they are familiar with selling insurance, they are not familiar with selling companies like their own insurance agency.
There is little resemblance in selling an insurance agency to selling an insurance policy… and it’s much more complicated.
There is no “cookie-cutter” method for selling an insurance agency and what works for one seller may not work for another.
Question #1: Who is the buyer or better yet, how do you find a buyer?
Some Agency owners may want to sell an insurance agency to someone they know who has the same type of Agency. That may be an acceptable idea as the Agency owner might have watched this other agency for quite some time and have a rough idea of its level of integrity.
However, there are many other potential buyers out in the world that may pay more and may be in a better position to pay the purchase price and still take care of your clients the way you would like them to be taken care of… but how do your find these other potential buyers?
Potential buyers could be someone from your area or outside your area who would like to expand their business. They may be willing to pay extra for the privilege or may structure the purchase more to the benefit of the Seller where the Seller receives the purchase price at the close of the sale rather than a long payout or an earn-out
One of the first matters to take care of is to make it known to potential buyers through our marketing efforts that the agency is for sale and you are trying to sell an insurance agency, but to not allow this information to become known by competitors, employees or clients.
Question #2: How can an agency owner confidentially market their business and at the same time keep their clients and agents comfortable with the agency by not letting them know the Agency is for sale until a buyer is found?
The best way to handle this situation is to be at arms length with all prospects by hiring a specialist in brokering insurance agency sales, someone who only does business transactions and is experienced with this process who can keep this public from knowing your agency is in play… someone like MKL Acquisitions. We require Confidentiality Agreements be filled out and signed by all potential buyers to make sure that prospective buyers have agreed in writing not disclose the fact that the Agency is for sale and not to disclose any financial details to anyone other than the prospective buyers advisors .MKL Acquisitions will market the Agency in a way that no one knows you are trying to sell an insurance agency… not your employees, not your clients and not your competitors who might use this to their advantage.
Question #3: “Do you have an exit plan?”
No matter whom you are, what age you are, or what your agency’s situation is, you need to have an exit plan. Few agency owners who want to sell an insurance agency have an exit plan in place as they prefer to go along month by month and react to whatever their carriers, their insured, or their competition are doing.
Agency owners need an exit plan because working to sell an insurance agency takes time. Many owners think that when the time comes and they make the decision to sell their insurance agency or sell the insurance book of business for a specific line of business, they will simply find a buyer and then the lawyers will draw up the papers and then the money flow in. The reality is… it’s just not that simple!
Agency owners typically think they can start and finish the process of selling their agency or their book of business in a month or two but this is not a realistic approach. Of course there are always exceptions to the rule, but business sales often take more time than expected and the seller needs someone to help them buffer what they want to do with actually getting it done…. while keeping the entire transaction as confidential as possible until the buyer is locked in and the deal is solid.
Working with a specialist in insurance agency sales like MKL Acquisitions will solve this problem for the agency owner and will give the agency owner some peace of mind knowing they don’t have to be actively involved with every “lookie lou” who wants to kick the tires to see if they can low ball or steal what is being sold… MKL Acquisitions helps maximize the sale price while insulating the Seller from the entire process allowing the Seller to stay focused on what they do best… sell insurance… until the deal closes and they get their money… and MKL Acquisitions helps make it happen.