MYTH #2: A Local Buyer is the Best Buyer
IN THIS FEATURED SERIES, WE DISPEL THE MYTHS ABOUT SELLING AN AGENCY
Allow me to share the story of our client, Ann, to illustrate the benefits of going to market to find the perfect buyer.
Ann built a specialty agency with a national client base. She was passionate about the clients and industry that she served and in many ways was one-of-a-kind in her domain. She saw immense potential for growth, despite already having a substantial client base. However, as a sole owner and specialist, she lacked the resources to capitalize on the full potential of her niche.
She was preparing for retirement and wanted to ensure her agency and clients were left in good hands, but who was the right successor? Local agencies lacked the expertise she had developed and knowledge of operating a specialty practice. A friend of Ann’s and former client of ABC suggested she speak with our firm.
The team at ABC understood the value of a niche agency, including a program that she had developed, and the pool of the best buyers. After preparing the agency and Ann for market, ABC disclosed an array of the most probable buyers and coordinated meetings between Ann and each.
At the end of the process, Ann was presented with a number offers. Most were competitive but two were head and shoulders above the rest (nearly 50% higher) due to unique strategic synergies that those buyers saw in Ann’s agency. Ann selected to buyer that she liked the best (who also made the most competitive offer) and agreed to stay on for a few years through a transition with the company.
- Don’t sell direct. Local agencies and peers are not necessarily the ideal buyer for your agency.
- Have clear communication. This seller was explicit about what she wanted out of the deal, what she was looking for, as well as understanding her company growth and abilities. This allowed Agency Brokerage to target buyers that would be interested in the specific specialty and quickly secure a deal.
- Be organized and direct. The seller wanted to make sure that whomever purchased her company would be passionate about her market and set up her company for ongoing success.
- Agency Brokerage can connect you with buyers you are unlikely to find on your own. At the end of the day, the seller wanted a strategic buyer for their specialty firm and our firm delivered.
What can we learn from Ann? Brokers Find Better Buyers.