Insurance Agency Acquisition: Pre-Sale To-Do List

There’s no denying that the insurance market is hot; insurance agency acquisition events are breaking records and 2020 looks like it will continue this upward trend. If you’re looking toward retirement, or otherwise considering exiting the insurance space, the current seller’s market makes this an ideal time for you to do so.

Before you list your agency for sale, though, there are 6 steps you must complete in order to position your business to garner the most competitive bidding.

1. Understand the Uniqueness of the Independent Insurance Agency Space

The independent insurance agency market presents unique challenges—and benefits—that are not reflected in other commercial real estate arenas, or even other insurance markets.

Despite the particulars of the agencies involved varying widely, the potential pitfalls they face throughout the process of being listed and sold are somewhat predictable. Informing yourself about the market you’re about to enter is the best way to fully understand the interactions you’ll soon have.

Springtree Group is on the pulse of this unique niche. By working with us as you prepare for sale, you’ll have access to up-to-date information about the market trends in your area and beyond.

2. Get into The Seller’s Mindset Early

If you know your ultimate plan for your agency involves selling it for profit, then it will benefit you to think like a seller continuously. Every decision you make in your business should be made with an eye toward snagging an outstanding offer.

3. Run a Tight Ship

Rather than falling into the trap of thinking your impending departure means that you can become a bit lax in your day-to-day routine, determine that you will operate as though a potential buyer will be evaluating your worth at any moment. Be aware of what happens in your agency, understand what each employee is worth, and make sure you are in charge of the overall direction you take.

4. Keep Impeccable Records and Know How to Access Them

Buyers are interested in your profits and losses. They’ll want to see paperwork for this year, of course, but they’ll also want to see your profitability reflected in well-kept financial records going back at least three years.

Get a head start by keeping your books straight at all times. Know how to prepare financial statements, cash flow statements, and carrier reports yourself.

5. Get a Professional Valuation

Since your books will be in such excellent shape, this step will be simple: obtain a professional valuation of your agency through Springtree Group. This will help you price your agency, which will be necessary once buyers begin seriously looking to purchase your company.

6. Work with an Insurance Business Broker 

Working with a broker will ensure that you don’t miss out on a strong offer due to an avoidable snag. At STG, we know how to position your agency to be sold quickly, smoothly, and to a qualified and prepared buyer.

Once you’re ready to accept offers for your agency, contact Springtree Group. Our network of qualified buyers extends across the country and into the international market. Choosing to list with us means tapping directly into this network of eager, funded buyers immediately.