Deciding to sell your insurance business is a big step and should not be taken in haste. You want to ensure that the entire process runs smoothly, and more importantly, you want to guarantee that you will find a suitable buyer and sell your business for the right price.
Many insurance agency owners struggle to know the right questions to ask a prospective buyer, and they lack the experience and know-how for dealing with insurance business transfers. As a result, finding a qualified buyer and ensuring the ownership transition goes through with proper financing and all of the needed legal documents in place can be a formidable challenge.
Agency owners looking to sell their business can save a lot of hassle—and negotiate a more favorable sales price—by working with a knowledgeable business intermediary. But, how do you find the right business broker to help with the sale of your insurance agency? The following tips can help you in your search:
Find Someone with Experience
Business transfers are a big deal, and must be taken seriously. As such, you want to have faith in your business intermediary to see the transaction through to completion. Look for someone who has proven experience in the field and a track record of successful insurance transactions. The more experienced the broker is, the more knowledgeable they will be on all of the technical details, including deal origination, negotiation, financing development, due diligence, and closing processes. It’s risky to choose an intermediary that has never completed an insurance agency transfer before, or has only a few business transfers under their belt. Their lack of experience could end up costing you a lot of money.
Look for a Team Player
Naturally, your business broker won’t be working alone. They will have to partner with other professionals, who are also working on your behalf to facilitate the business transfer. This includes your accountant, attorney, valuation experts, loan underwriters, and any additional advisors. Look for an intermediary that is willing to get involved and be part of a team, as well as one that has an established network of lenders and other industry experts to call on for support.
A seasoned business intermediary will also have access to tools and resources to identify viable targets for qualified buyers. Your broker’s willingness to collaborate and ability to pinpoint the right experts for your transaction can speed up the entire process, helping you structure the deal and set activity targets for all involved to complete their work.
When choosing a business broker, you also want to communicate your objectives clearly, and listen for feedback that indicates whether or not the intermediary is qualified to manage all facets of the sales transaction. Proper communication helps ensure that you are on the same page and that any open questions are answered quickly. The broker needs to know your goals and what you wish to achieve, in terms of the timing of the sale, maintaining confidentiality (even with employees), and the asking price for your agency or book of business. Without this knowledge in hand, they may be looking for one outcome, while you are aiming for another.
Make Sure You’re Comfortable
Finally, make sure you’re comfortable around your intermediary. If you aren’t, all sorts of trust issues can occur. You are placing your life’s work in this person’s hands, so you want to build a close relationship and feel confident that the broker truly cares about you and your company. Pay attention to their personality and the values they uphold. Don’t be afraid to ask questions, so you can get to know them better before agreeing to have them represent you.
Finding the right business intermediary to assist with the sale of your insurance agency does not have to be stressful, so long as you have a plan in mind. The key is finding an established intermediary that you can trust. Springtree Group has decades of experience in the insurance industry and is uniquely qualified to help independent agencies with buy-outs, mergers, book purchases, and agency sales. We facilitate ownership transitions through a rigorous four-step process, upholding a strict commitment to confidentiality throughout every stage of the deal. In addition, our long-standing relationships with more than 30 specialty insurance loan underwriters who understand the nuances of insurance agency financials can ensure the ability to finance the agency purchase under the most favorable terms.
To learn more about our experience and expertise managing the acquisition process for independent insurance agencies, download our free capabilities brochure, call Springtree Group at (972) 395-8811 or contact us online.