Leadership Lessons from Coaching Kids

2022-05-19T13:22:43-04:00May 18th, 2022|

I had the pleasure of being the assistant coach for my sons' under-11 soccer team this spring.  I should mention it was my first time coaching.  I’ve managed employees for years, but the experience amplified some points about leading a [...]

The Value of Customer Retention

2023-04-26T23:53:30-04:00February 10th, 2022|

When it comes to agency valuations, agency owners often ask us questions like, “How is the value of our years in business, our reputation, our organic growth, or our customer retention rate factored into the analysis”? The simple answer is [...]

What kind of agency owner are you?

2023-04-26T23:57:23-04:00March 23rd, 2020|

I have had the fortune of interacting with hundreds of business owners over the years.  Going even back as far as my college days when I bar tended at a yacht club, I’ve always tried to take note of successful [...]

Projecting Cash Flow from an Agency Acquisition

2023-04-26T23:46:41-04:00January 14th, 2019|

In my post from October, I discussed debt coverage ratios and EBITDA multiples. Now let’s talk about projecting cash flow. I’m shocked how many buyers make offers without figuring out what the cash flow will be with financing. I’m not alone either. I’ve spoken with many loan officers that deal with the same issue. This article is long overdue.

Financing Agency Acquisitions – Understanding Debt Coverage

2023-04-26T23:25:44-04:00October 11th, 2018|

Different lenders underwrite acquisition financing a little differently; however, they all typically want to stay under 6 x EBITDA on leverage.  The reasoning is fairly simple…cash flow.  As we’ll see below, agencies don’t cash flow well when they leverage themselves over about 6 x EBITDA.  One of lenders’ key underwriting metrics is something called the debt coverage ratio, which is a measure of the cash flow cushion over debt payments. 

If you can’t Grow, it might be time to Go!

2023-04-26T23:38:47-04:00April 20th, 2018|

When agency revenues start to fall year-over-year, there is usually a reason.  Sometimes the trend can be reversed, such as if it is tied to an economic cycle, but quite often the downward trend is unstoppable.  In our experience, a steady decline in the business is typically an indicator that one or more of the agency principals are spending less time running the business.  The enthusiasm and competitiveness that perhaps once drove growth in the business has waned. 

What is Preventing Your Agency from Growing?

2023-04-26T23:57:14-04:00February 21st, 2016|

What I’ll discuss in this post differs from most of my other ones.  The discussion is an amalgamation of my studies, experiences and observations from working with business owners over the last 10 years.  During that time, I have analyzed [...]

Insurance Agency Financial Models

2022-09-29T09:59:27-04:00October 3rd, 2014|

A key to running a profitable insurance agency is understanding your target financial model, i.e. how you allocate your revenue to various expense items.  If you were not aware, every business does have a financial model.  There are resources available [...]