Top Tips on Selling Your Insurance Agency
If you’ve already decided to sell your insurance agency, you should have at least a few questions on your mind. Maybe you saw some of the pitfalls when you were buying the agency and want to avoid them, or maybe you’re just not sure of where to even start. The truth of the matter is that you already know your business backward and forwards, but that doesn’t always make you qualified to sell your agency (if the hope is to get the best possible deal.)
5 Tips to Sell Your Agency with Confidence
Use these tips to move forward with a little more confidence.
1. Plan Ahead
It’s not going to be easy to sell your agency no matter what circumstances you’re facing. If your agency is incredibly successful, you’re going to need to find a way to bring the big bidders to the table. But you’ll also need to find a way to make their desire work for your bottom line. This is often easier said than done because you’re trying to strike a very delicate balance without alienating anyone. If your agency is performing well but not spectacularly, you’re going to need to find buyers who can spot the potential of the business to boost them to the next level. It takes negotiation as well as inside knowledge to come to terms that everyone’s happy with.
2. Go Over Your Finances
Any potential buyer is going to want to check out the financial situation of the agency thoroughly. The due diligence process is designed to ensure they have the right numbers before taking over the agency, so there are no liability surprises later on. From the state of your trust accounts to the way your taxes were filed, any mistake or discrepancy could make them want to back out of the deal. There are also compliance regulations you’ll need to meet when it comes to the offered price. Your exit strategy must thoroughly address the financials to get the best possible net worth of the agency. The clearer all of your numbers are, the more likely it is that lenders and buyers alike will trust your next move.
3. Do a Little Studying
The real market value of your agency isn’t what the assessor says it’s worth and it’s not what you say it’s worth. The more research you do, the more you’ll be prepared when it comes to evaluating your offers. You may even be able to do a few last-minute adjustments to make the agency that much more attractive to various buyers. The new year promises to hold a lot of opportunity for sellers. The trends point to growth for a number of different kinds of insurance, and while there is some failure, the overall forecast looks great. You can absolutely use this to your advantage during negotiations. Enticing the right buyers won’t be simple, but it will be worth it.
4. Let Go
This is often one of the most difficult things for owners to do, but it’s necessary if you’re looking to sell the agency. No matter the reason is for selling the agency, it can be a traumatic feeling to part with it Maybe you want to spend more time relaxing or maybe you know there’s another business opportunity that’s better suited for you. But that doesn’t mean you want to abandon your staff and your clients to a heartless buyer who will destroy what you worked for. Regardless of why you’re selling though, these emotions may get in the way of your goals. Too much attachment and you may end up making unrealistic demands from buyers.
5. Get Help
This is probably the best tip you’ll get if you’re looking to sell your agency, if only because you probably don’t have a lot of time to devote to the sales process. An intermediary’s job is to bundle up all of the good things about your company and to smooth out any questionable areas of your business, but they do so much more than this. It’s the specialized knowledge they’ve acquired that really can’t be taught without experience. It’s their attention to detail and entirely unbiased opinion that makes them so valuable when it comes to selling an agency.