Year-End Review: Issues Faced by 2019’s Agency Sellers

As we enter 2020 and a whole new decade, we are reflecting on the factors that have affected insurance agency sellers in 2019. In our role as an M&A firm specializing in the independent insurance agency space, Springtree Group recommends taking the following into consideration as you prepare your agency for sale.

  1. Skilled Negotiations are Crucial

Throughout and prior to 2019, we’ve noticed that independent agency sellers working on their own often aren’t tuned in to the savvy negotiation tactics that are key to a successful transaction.

Springtree Group removes this pressure entirely. Our skilled team of brokers will keep the proper tone throughout the transaction, ensuring that potential buyers remain engaged and interested in your agency.

This year, analysts have predicted the continuation of the “seller’s market;” take advantage by working with STG. We guarantee we will negotiate the best offers for your agency.

  1. It’s All in the Timing

When you are deciding when to sell your agency, please note that the timeline from the moment you let us know you’re ready to place your agency on the market to the day you close usually takes an average of four to six monthsWe work with agency owners who first expect to sell very rapidly, but we must adjust expectations; it’s unusual for an agency to sell within a month.

By working with Springtree Group, the complicated sale process will be streamlined and shortened, however. Financing is the main reason deals fall through; Springtree Group has the benefit of having in-house financing for our buyers, so anyone we connect you with is assured to have the funds to back up their offer.

Still, we recommend giving yourself plenty of time to find the right buyer for your agency. Prepare to continue owning and operating your agency for 6 months once it’s on the market. Should an excellent offer work out quickly, you can pass that year’s detailed business plan on to the new owner.

  1. Taxes on Your Agency’s Sale

Selling your agency at a profit means that you’ll need to consider capital gains taxes. For decades, sellers have preferred for most—or all—of their asking price to be paid in cash. Should you choose this option, the bulk of your capital gains tax will be due immediately after closing.

This capital gains rate you’ll be paying will be based on your adjusted gross income, or AGI. By taking the bulk of your payment at closing, your AGI will jump, and your tax rate will follow.

If you prefer to avoid this tax rate increase, you can choose to spread payments out. While a long-term payment plan should be avoided, receiving three separate payments for your business over three separate tax years means that your AGI never reaches astronomical rates. A little patience in this regard could put more cash in your pocket, both now and over time.

Consult the specialists at Springtree Group so we can help you decide the best tactics that will help you achieve your goals as an insurance agency seller. Email us at or contact us online.