Without fail, the phones in our office ring seemingly non-stop during the last quarter of the year, as insurance agency owners call to ask about selling their agency before year-end. Arranging a successful sale—and ensuring that you get the full value for what your agency is worth—takes months of planning, and cannot be rushed. Prospective buyers will want to do their due diligence to review your agency’s track record and reputation, and also need time to arrange financing to complete the transaction. And then, there’s the matter of finding qualified buyers to begin with, which itself can take months.

The good news is that, although you may not be able to close a deal before New Year’s Eve, you can take steps now to position your insurance agency for sale in 2018. What’s more, by putting together a comprehensive business plan for the next 12 months, you can boost your agency’s revenues and potentially increase the sales price for your firm. Even if finding a buyer takes longer than anticipated, you will benefit from the continued growth of your business as you gain a competitive advantage in the marketplace. Here are the primary areas to cover, as you develop your business strategy and prepare to sell your insurance agency in the New Year:

Build a Marketing Plan. You can’t reach your goals if you don’t have a roadmap to follow. Your agency’s marketing plan serves as a framework to attain the financial milestones that you set for yourself and drive revenue for the next 12 months. At the basis of your marketing plan is your expense budget for the New Year, as well as your income and profit goals to cover those costs. Then, you need to establish tangible action steps and benchmarks on a monthly and quarterly basis to ensure you hit the mark. These can include content schedules for social media marketing, targeting new markets through phone calls and direct mail, and hosting educational events or arranging speaking opportunities with local businesses and Rotary Clubs.

Review Financial Records. The first thing a prospective buyer will want to see is the financial history for your insurance agency, to determine the fiscal health of the business and potential for income growth going forward. Take time before the end of the year to tackle bookkeeping that has fallen behind or should be cleaned up. You’ll need to show accurate and up-to-date information for EBITDA (earnings before interest, taxes, depreciation and amortization), along with balance sheets and P&L statements for the agency, and current and historical cash flows. Prior to a business sale, buyers will arrange for these records to be verified by an established CPA or a business intermediary, like Springtree Group.

Revisit Business Operations. Your operations and administrative team is an integral part of your business and should be involved in planning for the New Year. Take the time now to review how you process new business and manage existing accounts to determine where there is room for improvement. New software programs and Web-based client portals can help streamline certain functions, while creating customized reports lets you track agency production and loss ratios from carriers for things like contingencies and bonuses. In addition, you should have written documentation for all of your agency’s processes and procedures, which not only can help with training new personnel, but can be a valuable asset for a prospective buyer to minimize transitional hurdles after the sale.

Whether or not you decide to sell your insurance agency in 2018, putting together a sound business strategy before December 31st will position you for success in the New Year. At Springtree Group, we specialize in helping independent insurance agency owners plan and prepare for an agency acquisition or business transfer, and can also assist with perpetuation planning and insurance agency financing. To learn more about our services and resources, or to speak with an experienced business intermediary, call us today at (972) 395-8811 or contact us online.