Succession planning is a key part of any business strategy, ensuring that a company will live on long after the original owner has retired or left the firm to pursue other interests. If you are planning to sell your insurance agency in a few years, you could make a greater profit by moving up your timeline. That’s because we’re in a perfect storm for insurance agency owners, with several factors working in their favor for a transfer event.

Just like in the residential real estate market, timing is everything when it comes to listing your insurance agency for sale. You need to have an exit plan in mind as you build your business, and you also need to gauge the market conditions as you determine when is the best time to sell. You’ll face stiff competition in a buyer’s market, and you may not get the full value of what you think your agency is worth. In a seller’s market, however, you can position yourself to make a graceful and more lucrative transition out of the business by striking while the iron is hot. Currently, three factors indicate that the best time to sell your insurance agency may be now:

Low interest rates: Although interest rates moved slightly higher along with the prime rate over the past year, they are still very modest, making it easier for buyers to finance an agency acquisition. Springtree Group has developed relationships with several niche lenders and private equity sources that are familiar with the unique aspects of transactions in the insurance space. We can also structure traditional and SBA loans, depending on the buyer’s needs.

High valuations: Agency prices are going up in several parts of the country, as increased buyer demand combined with the strong financials of established businesses creates a prime investment opportunity. If you are considering selling your insurance agency, working with a seasoned business broker like Springtree Group can help ensure that prospective buyers are properly vetted and financially qualified to complete a purchase.

Large number of buyers: Each month, Springtree Group puts together a listing of independent agencies for sale nationwide that have come to us through direct contact with sellers and sell-side business brokers, as well as our long-standing network of consultants, attorneys, accountants, insurance industry insiders, and financial services professionals. As more and more Baby Boomers are retiring, we can match sellers with qualified buyers and reliable lenders for a smooth business transfer.

Preparing an insurance agency for sale is a lengthy process and requires careful attention to the business operations and financials, as well as to the due diligence process as you search for the right person to take the reins. Springtree Group can save you time and money by matching buyers and sellers based on the agency earnings, geographical location, and other key considerations; providing financing solutions; and structuring the deal to complete the transaction successfully. From deal origination to closing processes, no other business broker offers our level of expertise in acquisition process management, combined with a full suite of financing and lending tools specifically targeted to the insurance arena. We can also recommend business resources for sales and marketing support, legal counsel, and other useful service providers that can help position your agency for success now and under new leadership.

If you are considering transferring ownership of your insurance agency to the next generation, now is a great time to start the process. To learn more, call us at (972) 395-8811 or use our online contact form to send us a request.