Why You Shouldn’t DIY the Sale of Your Independent Insurance Agency

The DIY personality type is admirable. If you’re a DIYer, you are likely a determined, hard-working, creative, adaptable individual. When it comes to the sale of your independent insurance agency, however, we encourage even the most DIY-focused individuals to stop and consider the VERY REAL, thoroughly documented consequences of taking this transaction into your own hands.

If you own a small-to-mid-sized insurance agency, the financial impact of failing to work with an expert M&A consultant when you’re ready to sell can be MASSIVE.

The DIY Approach Is Disastrous

Does this declaration sound dramatic? It should! The disparity between the owner’s profits at closing when working with an expert advisor is quite sizable. In 2021, analyses revealed that owners of smaller agencies (i.e. those valued at $1 MM and below) who worked with advisors when selling netted earnings that were 55% greater than those who took the DIY approach.

What would 55% greater earnings secure for you? For your retirement? For your children?

And what would it mean to leave 55% of your potential profit on the table?

Smaller Agencies Tend to DIY 

We know that many owners of small and mid-sized agencies tend to have DIY personalities. Your tenacity and independence have served you well in life; it makes sense that you decided to run your own agency.

However, as the owner of an agency of this size, you are especially vulnerable to missed earnings when you don’t hire an M&A advisor. We’ve disclosed the 55% you stand to lose should you proceed without the help of an advisor.

So, let’s discuss what happens when an agency valued at $5 MM+ proceeds to sale without an advisor. They miss out on “only” an average of 24%! This is still a painful figure, but it pales in comparison to the massive profits you stand to lose.

We Want to Maximize Your Earnings

Research clearly details why you must hire an M&A advisor to assist you with your sale. Springtree Group will enable you to walk away from closing with significant earnings that you would not see if you took the DIY route.

Why Do DIY Deals Fail?

Most commonly, a pending deal fails due to inadequate financing. We urge you not to waste time trying to sell on your own, chasing deals that are doomed to fail. Time is money. Delaying your exit from the business will affect your future plans and can alter your agency’s valuation.

We Offer Niche Financing

The sale of private insurance agencies is a complex niche. For a multitude of reasons, traditional financiers refuse to work with those who are buying insurance agencies. The good news is that STG offers robust in-house financing to qualified buyers. By hiring us to facilitate the sale of your agency, you will gain access to our pool of premier buyers. We will personally connect you with buyers who are searching for a healthy agency in your region to purchase.

The Right Time to Contact Us

 If you’re planning to sell your agency within the next year or two (or even three) – now is the time to contact Springtree Group.

We will advise you on the best ways to prepare your agency for a maximally beneficial sale and how to gradually step away from your role as owner. Lastly, we will solidify the transfer of the agency you’ve worked so hard to build to new owners.