The first step in selling your insurance agency should be to have a valuation performed by a firm involved in agency/broker M&A transactions. One might ask “Why?”. Well, thanks for asking. There are a few excellent reasons:
The freedoms we have in the US are amazing compared to other parts of the world. This time of year is when most people often reflect on things they are thankful for. But that’s not really the topic of my post. I’m talking about financial freedom and the freedom of letting go of your business.
At the “suggestion” of my wife, we recently started looking for a new house. Like most other home shoppers, I wound up on Zillow.com. If you have never used it, Zillow is a great website loaded with information and resources to aid in the process of buying a new home. While shopping for a home is exciting and fun, my experience drove home a few points that relate to selling an insurance agency.
Our clients don’t like to talk about taxes and neither do we but, as Ben Franklin said, nothing is more certain in life than death and taxes. So we put together a little summary about the differences between stock and asset sales when selling an insurance agency and how the IRS treats various assets in the sale of a business.
The due diligence process is a critical stage for either selling or acquiring an insurance agency or brokerage. M&A transaction “due diligence” is the process by which a buyer of … Continue reading
I’ve come across a few articles posted by agency valuation consultants challenging the use of EBITDA multiples in valuations. It can be argued that EBITDA is not a measure of … Continue reading
What I’ll discuss in this post differs from most of my other ones. The discussion is an amalgamation of my studies, experiences and observations from working with business owners over … Continue reading
One of our clients this last year came to us after a failed transaction with a buyer that had approached them. This particular client had negotiated a 7-figure sale price with the buyer and started down the process of trying to get the deal done. To keep the story short, we’ll just say that six months later the deal was still dragging out and the buyer had attempted to renegotiate the terms for no fault of the seller. Reaching their wits end, the client went online to find someone to help, found our website and called us. …
I was recently interviewed for the Independent Agents Magazine for an upcoming article on perpetuation planning. I said something that I typically don’t say, which is that now (or at least within the next 18 months) is the optimum time to sell an agency. I believe that market values are as high as they will be for a decade and will crest within the next 18 months.
It’s pretty common knowledge that Allstate agencies generally sell for a higher multiple of revenue than independent agencies. Independent agents, and former Allstate agents, are also pretty vocal that the … Continue reading