When it comes time to sell your business, having a professional handle the sale makes a profound difference. A business broker doesn’t just take the extra work of a sale off your hands; they know how to value, price and market your insurance business to capable owners who are ready and able to take your agency to the next level. If you are thinking about selling your insurance agency, you need someone with the financial and legal know-how to make sure that the sale goes through without any problems that could scare away buyers, clients, or employees.
Most people don’t already know a business broker, so you’re most likely going to have to find someone with whom you have no personal experience. If a colleague, family member or friend has had a positive experience selling an insurance agency, ask them which business broker they used. But don’t just take their word for it. Arrange an interview with each potential candidate, and ask them these important questions:
Are you a full-time business intermediary? There are probably some great business brokers who only work part-time, but unless you or a business associate has first-hand experience with them, you want to look for a full-time business broker. You have worked hard to build your book of business, and you want to entrust the sale of your insurance agency to someone who makes it their primary focus, not a sideline. A part-time broker may not have the expertise or be able to dedicate time to properly marketing your business and finding a qualified buyer.
How much experience do you have selling insurance agencies? Business brokers specialize in varying industries. Many are generalists, but a broker with specific expertise in the insurance business can offer targeted experience and connections that will benefit you throughout each stage of the transaction. Industry contacts make it easier to market to and find qualified buyers, and to arrange suitable financing options. Ask how long they have been brokering insurance agency sales and how many industry-specific sales they have successfully closed.
How will you keep the sale of my business confidential? This point is crucial. Part of the value of your insurance business is in your employees and customers. Your employees know your business, your clients, and your practices. If word about a sale gets out, you could find yourself with a mass exodus, which will negatively affect the value of your agency. In addition, if competitors get wind of the sale, they may go after your most loyal clients, or even your vendor relationships. Ask how the business broker will keep the sale of your agency confidential while still being able to market to and attract the largest pool of buyers.
Do you have access to lenders? This point is vital to your sale if your buyer needs financing—and there’s really no way to know whether they will, until you find a buyer. As Baby Boomers look toward retirement, many prospective buyers are insurance agents or agency owners in their 30s and 40s, who don’t yet have the capital to pay cash for your business. As a result, requiring a cash sale will greatly limit your pool of prospects. Having a business broker who knows how to access financing and arrange a loan gives you an edge. An intermediary who has worked with niche lenders, SBA loans, and other sources of financing will be able to market to a much larger audience of qualified buyers than someone who has a limited network.
If you are ready to start thinking about selling your insurance agency, working with a knowledgeable business intermediary can ensure that your transaction goes through smoothly, and that you receive top dollar for your business. Springtree Group is a highly qualified business broker with decades of experience in the insurance industry. We have completed hundreds of insurance agency acquisitions and transfers and are uniquely qualified to help independent agencies with buy-outs, mergers, book purchases, and agency sales.