It’s important that you understand what we mean when we talk about ‘successful’ deals. For us, true success means helping our client to achieve all of their goals for the sale. However, a successful deal could be described as any deal that has a positive effect on the business and satisfies both buyer and seller. There are many ways to achieve a successful deal, meaning there are degrees of success.
For us to achieve our target, we need to achieve a really successful deal, a deal that emphatically meets all of our client’s targets. Achieving that level of success often requires us to look at the structure of the business, to work with the seller to help them understand their needs and to dig deep into the makeup of the agency to demonstrate its core value. That’s a challenge we love to get our teeth into, but it isn’t always required.
Selling A Successful Agency
There are occasions when the value in the business, the potential for growth and the opportunities for a buyer are already in plain view. Agencies that are on an upward curve in terms of growth and revenue generation with talented people will always be a relatively easy sell. These deals still require hard work to complete, but the process is a lot smoother. All we have to do is showcase the skills and experience in the agency, and the producers’ and owner’s ability to generate revenue does the rest.
We have mentioned the affect that revenue and growth have on agency value before on this blog. They both have a real impact on value, making it natural to point out that agencies, producers and owners that generate revenue will offer plenty of value. Unfortunately, owners running businesses achieving at that level rarely think about selling.
Instead, they are looking at the growth they are already achieving and looking for ways to sustain it. These owners sometimes see themselves as ‘above’ selling the business. They think, ‘I’m already successful, why would I hand that success over to someone else?’ Our challenge with these kinds of owners is to answer that question.
Seeing The Benefits
When you sell a successful, but small, agency you gain a wide variety of benefits that would otherwise be beyond you. Alongside the status that goes with operating as part of a large brokerage, you may get access to markets and technologies that were unavailable before. That larger entity will also provide support in administration and training that will allow you to focus on the thing that made you successful in the first place, generating revenue.
If you own an agency that’s booming, selling the business may well be the last thing on your mind. You may doubt that it would offer you anything you can’t get yourself. In truth, merging with a larger entity can turn your successful agency into an even more powerful business. No matter which way you look at it, that’s a really successful deal.
What is the Value of Your Insurance Agency?
As financial advisors who represent insurance brokers in business transactions, we are commonly asked one question “How much is my agency worth?” It is the 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. Click below to download our comprehensive whitepaper which details “The 9 Factors That Indicate Value”.
