The Five Ds of an Insurance Agency Sale
This has certainly been an unprecedented year. Your plans to stay in or possibly sell your business have most likely changed due to everything taking place. Regardless of your current outlook or decision, sooner or later you will have to turn your business over to someone else. As you approach the time when that decision is inevitable, that thought is usually foremost in owners’ minds at this time of year.
Thinking about an insurance agency sale can be intimidating. You have gained so much experience during your career, but this will be totally new to you. A lot of owners put off thinking about selling their agency because they don’t know what to expect. Every sale is different, but the process usually follows the same pattern.
Decision
It starts with the decision to sell. Most owners dwell over this decision for a long time. The decision to change your life in any manner can be daunting. When you’re ready to sell, and only when you’re ready, you should contact a financial advisor to discuss the sale. Making a decision will be difficult. You will spend a lot of time at this stage. Take your time with it, just don’t take too long.
Define Goals
When you engage a financial advisor, you need to discuss your goals. Those goals will include business goals for the insurance agency sale as well as your personal goals. You will need to define exactly where you want to be after the sale, because that is the only way to get there.
Documents
The process of selling your agency involves a lot of documents. Firstly you will go back through your agency’s history and build a picture of the business you have built. This is a lot more fun than it sounds, it can serve as a great reminder of just how far you have come and what you have achieved.
Once you have worked with your advisor to build a picture of the agency, they will help you to produce the marketing documents. These will be used to market your agency to potential buyers.
Decision
After a lull in activity on your side, while your advisor works to find you the right buyer, you may be presented with options. If your advisor has been able to find more than one suitable buyer, you will be faced with a choice. Now comes your final big decision as the owner of your agency, which buyer do you want to work with?
Due Diligence
When you have agreed to a deal in principle, you need to start due diligence. This will involve a lot of hard work. Most of our clients find themselves doing the longest days in their careers during due diligence. It is a time-consuming but vital part of the process.
D-Day
As the date of closure approaches, you will experience a variety of emotions. You will be anxious; it’s natural to consider the deal falling through and irrational fears tend to save themselves for the big moments in life. When you realize it is actually happening, you will experience other emotions, everything from relief to regret and back again.
Selling your insurance agency can be daunting. It will be one of the biggest moments in your life. The thing is, when you break it down, it’s really just a bunch of ‘D’ words.
If you are considering the sale of your insurance agency, Sukay and Associates are happy to offer you a free consultation. This is a no-strings consultation that gives you the opportunity to discuss your goals and find out what your agency value is.
Complimentary Agency Valuations. No strings attached.
As Financial Advisors who represent insurance agencies and brokers in business transactions, one commonly asked question we get is
“How much is my agency worth?”
It is one topic that each and every agency owner wants to discuss. It would be nice if we had one simple answer. Unfortunately, there is no simple answer.
It is impossible to estimate the value of an insurance agency without performing a financial analysis. Earnings of an agency are the main influencing factor, however, there are 9 factors that we take into consideration.
As a firm, we believe in answering the question above is our responsibility and the foundation of a great working relationship – even if that is in the future. Because of this, we unlike most firms, offer free insurance agency valuations for those who qualify.
