As leading insurance agency M&A advisors, we’ve come across every myth about agency sales imaginable. We understand the concerns agency owners have and the truth about what they can expect, particularly when partnering with a firm like Springtree Group. Here are the top five myths about selling your insurance agency (and what you can actually expect).
Myth 1: Selling at Peak Success Means Leaving Money on the Table
Some insurance agency owners are ready to retire or step away from their agency to pursue other endeavors, but their current success gives them pause. Shouldn’t you wait until your insurance agency is slowing down to sell it off?
When your agency is showing impressive sales and endless growth potential, you’re positioned to sell at your most competitive price point. Selling during your agency’s peak success is the best way to leverage your assets to create a stable and predictable financial future.
Myth 2: Selling Puts My Staff at Risk
If you’re running a family-owned or small operation, you feel connected to and responsible for your staff. Your team members are one of the main reasons for your success, and you want to ensure that they not only retain their positions but also the environment that allowed them to thrive in the first place.
The truth is that most buyers want to maintain what’s working. In fact, this is another reason to consider selling at your agency’s peak success. When all signs point to steady growth, your buyers will want to keep the staff in place who are responsible for it.
Myth 3: Selling Means I Have to Leave My Agency Behind
Perhaps you’re only looking for partial retirement and want to keep a hand in the day-to-day operations of your insurance agency on a part-time basis. Many insurance agency owners fear that selling means forfeiting their right to have a voice in their agency.
Some buyers prefer the seller to stay on the team for a minimum of six months to a year, at least on a part-time basis. This creates a smoother transition and allows the new owners to learn the ins and outs of your agency before you step down completely.
Myth 4: Any Offer Is a Good Offer
In a tumultuous economy, it’s easy to become bogged down by fears of financial stagnation. You may be hearing from other insurance agency owners that now is a bad time to sell or that buyers aren’t in the market for your particular verticals. From this mindset, you may feel the urge to jump on the first offer you receive.
Industry-wide statistics reveal that mid-size insurance agencies receive offers at a 55% increase when partnering with an intermediary like Springtree Group. This isn’t just due to our experience or connections within the industry. It’s also because of the financing resources we make available to viable parties, which helps them maximize their buying power.
Myth 5: My Insurance Agency Isn’t Big Enough to Sell
Does your agency have an annual valuation of $5 million or less? When you’re not a national power player, you’re more likely to be the target of every myth we’ve shared today due to misconceptions about agency funding for small, independent insurance brokerages.
Springtree Group offers a variety of financial resources that empower insurance agency buyers and the sellers who need them. Contact us to learn more about how we can facilitate your insurance agency sale.
