I have had the fortune of interacting with hundreds of business owners over the years. Going even back as far as my college days when I bar tended at a yacht club, I’ve always tried to take note of successful [...]
This question is one of the main reasons people call our office. In fact, we complete over 120 valuations of insurance agencies and brokerages each year for agency owners, buyers and lenders all asking for our professional opinion on agency market value. We are the most experienced firm in the nation when it comes to valuing agencies with under $5M in revenue, which is why the leading lenders in the insurance industry turn to us.
Selling a business is a major decision. On occasion the decision to sell is driven by one factor, such as the principal facing a health concern. For most agency owners though, the decision is based on a number of factors. [...]
Since you will only sell your agency one time, its vitally important that you get it right the first time. So here are six mistakes to avoid when selling your insurance agency:
In my post from October, I discussed debt coverage ratios and EBITDA multiples. Now let’s talk about projecting cash flow. I’m shocked how many buyers make offers without figuring out what the cash flow will be with financing. I’m not alone either. I’ve spoken with many loan officers that deal with the same issue. This article is long overdue.
When it comes time to selling your agency, confidentiality is vitally important. You may be dealing with one or more buyers, each of whom will have a multitude of questions and requests and his/her own opinion of how to go [...]
Different lenders underwrite acquisition financing a little differently; however, they all typically want to stay under 6 x EBITDA on leverage. The reasoning is fairly simple…cash flow. As we’ll see below, agencies don’t cash flow well when they leverage themselves over about 6 x EBITDA. One of lenders’ key underwriting metrics is something called the debt coverage ratio, which is a measure of the cash flow cushion over debt payments.
National Preparedness Month is about taking the necessary steps to prepare for natural disasters or the unforeseen emergency. When it comes to preparing for the unexpected – the first step is to check your insurance coverage. Without the proper coverage [...]
If you think a loan is just a loan – stop. The purpose of a commercial loan is to generate revenue, make improvements (equipment) or commence new construction development. Generally, these loans have short durations, some have balloon payments and [...]
It's difficult to imagine a time when insurance wasn't an integral part of managing risk for both individuals and businesses alike. But insurance has evolved over the millennia from something we would barely recognize to the products of today. To [...]