Springtree’s Top 5 Tips for a Successful Insurance Agency Transition Event

Springtree Group’s leadership has 50 years of experience in private insurance M&A, ensuring that our clients experience the best professional guidance possible as they navigate selling their private insurance agency. Today, we’re sharing our Top Five Tips for a successful insurance agency transition event.

1. Negotiate a Transferable Lease

Unless you own your own office space, it’s vital that you negotiate a transferable lease agreement. Savvy buyers will reject an agency if the landlord plans to take advantage of the sale by significantly increasing the rent.

In order to prevent potential buyers backing out of the sale toward the end of negotiations, make sure that you’re able to present a transferable lease that preserves the current rent.

2. Establish Binding Agreements with Existing Employees

While not every buyer needs a full-fledged staff in place when taking over an insurance agency, you won’t want key members of staff to flee during the transition.

In order to protect you, your agency, and the new owner, negotiate agreements with these key employees. We suggest non-compete, anti-piracy, and non-solicitation agreements be in place before you list your agency for sale.

3. Hire Professionals

You only have one opportunity to sell your business. Whether you’re selling to retire, relocate, or simply wish to exit the private insurance business, this sale will likely influence your financial situation for many years to come.

By hiring Springtree Group before you list your agency for sale, you’ll have access to our extensive experience, network of qualified buyers, extensive banking and lending expertise and our savvy legal teams. Rather than getting bogged down in nit-picking inconsequential details, Springtree’s team remains focused on positioning your agency to garner fully-funded offers as quickly as possible.

4. Understand Your Agency’s Value

When it comes to assessing your agency’s value, there’s more to consider than just multiples of annual sales or EBITDA (though these basic metrics remains useful). Better-informed buyers will factor in reasonable expectations of income, overhead expenses, and compare this estimate to the asking price.

If you’ve been running a tight ship, focusing on organization, efficiency, and impeccable record-keeping, the right buyers will take note, and will value your agency favorably when compared to a poorly-run business.

Keep in mind that net profits, price, and valuation may each be different. Value is a subjective judgment, while price will be agreed upon after multiple factors have been weighed.

As you work with Springtree Group to list your agency for sale, we’ll explain the valuation process as it pertains to your business. Once we’ve established the asking price, your agency can be officially listed.

5. Choose a Buyer and Finalize the Sale

When you’re presented an offer through Springtree Group, we ensure that our buyers are able to back their offers with robust funding. Lack of funding remains one of the key reasons a sale will fall through.

We realize that every time you engage with a buyer in the lengthy sale process, only to lose at the last moment, you’ve wasted significant time and energy. In order to avoid this hassle, Springtree does an extensive compatibility analysis to ensure each seller is connected with buyers who are fully-prepared to follow through on their offers.

When you’re ready to list your private insurance agency, contact us. While every sale process will encounter obstacles, working with Springtree Group ensures that you have experts by your side to navigate each step in the process.

We are proud to work with buyers throughout North America, Europe, and the Bahamas. We guarantee that we’ll find the ideal match for your agency.