Important Tips for Insurance Agency Sales
It’s a reality that there is simply a much higher demand from buyers looking to purchase insurance agencies than there are insurance agencies for sale. This is obviously great news for anyone who is currently looking to sell their agency and get out of the business or retire. However, for those who are interested in making insurance their profession, it’s a bit of a challenge and knowing where to look is key.
Most of the buyers who are searching for the right insurance agency to purchase are looking for certain qualities in an agency. Naturally, potential buyers want to land an agency that has been fiscally successful with a good, solid stream of revenue. Agencies that offer a wide variety of products and/or services are in demand.
Many of today’s potential buyers are already involved with finance in some capacity in their current profession, and they have realized that the insurance industry can be a lucrative career choice. Of course, it is extremely important that anyone who is considering purchasing an insurance agency be acutely aware of the details surrounding the sale of any agency. There are important questions one must ask to be sure that buying an insurance agency is the right move.
- Why is the current owner selling? It is vital that buyers get real answers from the current owners about why they are choosing to sell. Many times, it is a legitimate reason like a desire to move upward, to retire, or perhaps to make a geographic relocation. Sometimes, though, there may be hidden financial troubles that led to the sale of the agency. Do some digging now so you won’t regret your decision later.
- What is the company’s current advertising strategy? Making connections now with any advertisers or marketers who have worked with the company in the past will save the new buyer a lot of energy, time and, potentially, money down the road.
- Is there room for the agency to grow? Depending on the new buyer’s financial goals and aspirations for his or her new insurance agency, it’s important to have a good handle on the agency’s potential for growth in the future. This involves doing some research into the customer base and previous customer satisfaction with the agency’s services.
- What are the agency’s lease terms? Pay careful attention to the exact location of the agency in question as well as the terms of its current lease. Make sure you can afford to maintain the lease at the current location, because moving your new agency can be one of the quickest ways to lose what customer base you already have.
In addition to the factors listed above, if at all possible, get to know the staff before purchasing an insurance agency. Find out what kind of employee retention rate you can expect and try to get a good feel for how well the current staff works together. If you have to bring in all new employees when you make the purchase, it could cause a significant disruption and could cost you a significant number of customers.
We are happy to recommend business resources for insurance agencies and brokerages seeking agency funding, sales & marketing support, legal counsel, and other information to support the success of their firm. To discuss your agency needs, please call us at 972.395.8811 or contact us online. We look forward to assisting you in growing your independent agency or brokerage firm.