This month on the blog, we’re going to do things a little differently. In order to offer more focus on specific elements within insurance agency sales, each post will outline a reason why deals succeed or why they fail. Alongside posts from myself, and from John, we will have guest posts that offer the buyers’ perspective on why insurance agency mergers succeed or fail.
To start with, I will take a look at a vital factor in every agency sale; finding the right time to sell. By ‘the right time’ I don’t mean the time to earn the highest value, or the best time of year; I mean the right time for you and the right time for the business.
Engaging With The Sales Process
No two deals are the same, however, there is one factor that is common to ninety-nine percent of the successful deals we have been involved with. In each instance, the owner was ready to sell and ready to engage with the process.
Selling your insurance agency is a huge undertaking. It involves a detailed dissection of your life’s work and will require you to look at your business through the eyes of a third party. As positive as the results may be, this is not an easy thing to do.
The Emotional Moment
In order to sell your business successfully, you need to go into that process with your eyes open and with a one hundred percent commitment to selling. We tell every owner there will come a moment when the gravity of the decision will hit them; we refer to this as the ‘emotional moment’. It happens in every sale.
If you are not committed to the sale, or you are just looking at things from a financial perspective, that emotional moment can derail the whole deal or at least give you second thoughts. However, if you approach the sale with the right mindset, it will simply be the last step on the road to passing on the ownership of the agency.
Talking To The Buyer
You also need to be ready to deal with the buyer. Owners who have the most productive discussions with buyers inevitably end up making the best deal. Owners who are unsure about selling or distrustful of the buyer will always be at a disadvantage. The most important factor in every deal is what happens the first day after the sale, the only way to make that first day a good one is to engage with the buyer and let them know exactly what you want out of the deal.
Defining your goals will be the most important piece of preparation you can do before selling the business. There is no point in going into a deal just to ‘see what you can get.’ That approach will only waste your time or leave you disappointed. Instead, think about what you would like to do after the sale. Would you like to retire? Are you looking for a new challenge or a change in responsibility? Do you simply need an injection of new motivation?
Finding The Right Time
The answers to these types of questions will help you to understand your goals for the sale of your business and help you to see why you should engage with the process. Most importantly, those goals will help you to understand whether or not you are ready to sell and pinpoint the right time to sell. After all, successful deals aren’t just about selling for the most money or merging with the best entity. They are about selling at the right time for the right reasons.
