So you’re thinking about selling your insurance agency — that's fantastic! The fact that you've reached this decision tells me you've put your heart and soul into building a business that's worth something. You want to get this right.

Selling your agency is the main event that will enable you to see a return on the fruits of your labor while relieving you of the responsibility that comes with owning a business. Sounds good, right? We get it.

There are a million reasons why you might want to sell your business — and we’ll talk about more of them in just a minute — but for now, let’s take a step back and consider some of the many factors that come into play when you sell an insurance agency.

First of all, it’s essential to make sure you truly want to sell your business. People choose to sell their businesses for a variety of reasons.  Perhaps you want to spend more time on the golf course. Going fishing with your grandchildren or spending more quality time with your spouse.  Whatever the reason it’s essential to get clear on your motivation for selling the agency — you don’t want to make a decision you regret down the road!

If you’re determined to sell, be prepared to wait a period of time before the final signatures are in ink. It’s just a fact — insurance agency sales may take some time. It’s a process, but we promise it’s worth it to know that your sale is successful and the business you’ve built is in good hands!

The second most important factor to consider when you’re considering the sale of your insurance business is the actual value of your book of business. We’ll go into more detail later, but for now, here’s the most important thing to know: Yes, it’s not always easy to accurately estimate the true value of your business and get a good deal, but Sunbelt Atlanta can help! We are all about making business sales smooth and simple — we’ve even created a convenient online tool you can use to get started on the estimate of the value of your insurance business!

Once we've established a value for your book of business, we can strategize our plans for getting your business to market, finding the right buyer and settling on a fair price.

Sure, there are plenty of factors to consider when selling an insurance agency — but that doesn’t mean the process has to be overly difficult or complex. At Sunbelt Atlanta, we’re dedicated to making the transition of your insurance business as seamless as possible and for maximum value so that you can enjoy the rewards you’ve earned. We’re excited about partnering with you on the sale of your business — that’s why we’ve written this article!

Today, we’re walking you through all the details of selling your insurance business. We want to help you get the maximum returns on your insurance business sale, and we want you to have the confidence as you take this big step. Are you ready to get started? Then read on!

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So You Think You Want to Sell Your Insurance Agency?

Selling an insurance business is a big decision! You spend years investing your time and energy into this enterprise, and you’ve put a lot of passion into it as well — you don’t want to sell it too quickly and quite possibly leave money on the table! That said, there are plenty of reasons why selling might be the right choice for you. Here are just a few:

  • You’re ready to retire. You’ve pounded that pavement, kept your nose to the grindstone, and worked hard for every penny you’ve earned — congratulations! Now it’s time to take a step back and enjoy the rewards of everything you’ve created. If you’re ready to step back from your business and enjoy retired life but you want to give yourself a little time to adjust, selling your business is a great choice.
  • Your passion and fire are gone. You’re showing up to work day in and day out, but something doesn’t feel right — that hunger you used to have just isn’t there anymore. Maybe you’ve developed a new interest, started a side hustle that is more exciting to you, or you just don’t get the same buzz you used to. Whatever the reason, your passion for this particular business is gone, and you no longer have that drive to keep growing the business. If that’s you — it’s time to sell!
  • You realize a new owner will better serve the business. Maybe you’ve realized that your peers and employees have fresh, new ideas that will benefit the agency. Or perhaps that employee or family member you’ve been training is ready to take over the business and raise it to new heights. If you recognize that it’s someone else’s turn to step up and take the lead, selling is a great idea.
  • You no longer have the resources to level-up your company. You’ve built a fantastic business, but you’ve reached a ceiling — you no longer have the financial capital to invest, but you still want to take your business to the next level. In that case, it’s time to sell to a larger company with the resources, technology, and management structure to take what you’ve built and make it even bigger.
  • You don’t want to compromise your mental health. Your health comes first — no matter what. If the stress and strain of owning and running a business are weighing heavily on your mind, it might be the right time to sell. That doesn’t mean you have to step away entirely. You can still stay as involved as you desire — but someone else can shoulder the financial responsibility.

The truth is, there are a million reasons why you might want to sell your company, but it’s important to get crystal clear on what your reason is. Selling a business is a big decision, and you don’t want to regret it. Remember — once you’ve sold your business, you can’t get it back. Make sure that selling is truly what you want to do, and then proceed with confidence.

What Is Your Business Worth?

Once you’re totally clear on your motivation for selling your business, it’s time to get to work securing that sale! There are plenty of things to consider — starting with the value of your business.

But the total value of your business isn’t necessarily easy to calculate. There are a number of factors to consider, including but not limited to:

  • Your total earnings. When we talk about the total earnings of your business, there are two key numbers to look for: your annualized gross commission and your EBITDA.

The annualized gross commission is exactly what it sounds like: The amount of money your business makes in a year. Most businesses sell for about 1.5 - 2.5x their annualized gross commission. So, for example, if your business generates $100,000 per year in net profits, a fair selling price could be anywhere from $150,000 to 250,000.

Keep in mind, however, that annualized gross commission is not all about the money your business owns. Assets and products that produce more income are going to be worth more than those that don’t, so businesses capable of growing their assets will be worth more.

But it’s not quite that simple. As a business owner, you know all too well that you’ve got to spend money to make money. That’s why it’s important to calculate your adjusted EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortization. To calculate those earnings, you’re going to want to add up all your profits and assets. Then, subtract loans, depreciation, and other expenses. And finally, adjust for the costs of your employee’s salaries and benefits, any rent you must pay, and the cost of hiring someone to replace you.

Once you’ve added up your assets and subtracted all debts, you’ll have a pretty good picture of your total earnings. From there, you can start to gain a clear picture of the value of your business. Keep in mind — most businesses sell for 4x - 5x the adjusted EBITDA.

Remember, too, that money — while important — is not the only indicator of the strength and value of your business. Potential buyers will want to see your clients’ reports, your average policies and policy premiums per household, your largest clients, and many more factors to determine the true worth of your business. Good reviews from impressive clients speak volumes about the strength and growth potential of your insurance agency.

  • The risk involved for the buyer. Sales always come with a certain amount of risk, so your buyer will want to take care that they’re not going to lose money in the long run. There are many warning signs of a high-risk sale; however, it’s not just about whether your company is losing money.

For example, employees or poor record-keeping are major red flags for potential buyers. If your buyer notices that your company has shown a pattern of high employee turnover, they’re going to scrutinize potential deep-rooted problems within your agency. Or, if they notice that your company’s books aren’t exactly well-organized and up-to-date, they might wonder about financial issues, waste, and irresponsibility on your part as the manager. Other risk factors include revenue concentrated only on a few carriers or accounts. Or an over reliance on carriers that are non-rated and/or serving substandard markets. These are things potential buyers will scrutinize.  

That’s not to say your business must be pristine to achieve a sale. Every wise buyer understands that there is some risk involved in any kind of acquisition of this size, but when seeking to sell your agency, it’s important to put your best foot forward and present your company in the most appealing light possible.

  • Your financing plan. When it comes to the buying and selling of businesses, it’s always best to encourage your buyer to use third-party financing. And the truth is, financing a large acquisition through a third party really does benefit both buyer and seller.

By using a third party to finance the purchase of your business, your buyer has the certainty of receiving a high enough loan to acquire the business and out-bid other competitors. Meanwhile, you’re much more likely to sell your business for what it’s worth instead of accepting a lower price or a larger note. Your buyer won’t be seeking difficult-to-find lines of credit — instead, you’ll reap the rewards of your labor on-time and in the highest amount, and the financial responsibility will pass to your company’s new owner. Truly a win-win!

Calculating the total value of your business is hard work. There are so many factors to consider, and it’s easy to feel overwhelmed as you attempt to find a reasonable asking price for your insurance agency. We’ve been there!

We have good news, though: Sunbelt Atlanta is here to help. We understand how important it is to accurately assess the value of your business and get the most out of your sale. We’ve brokered the sales of many insurance businesses during our 20+ years as a firm, and we pride ourselves on providing expert advice earned over more than 70 collective years of experience. We’d love to add you to our list of highly satisfied clients!

To help you through the process of estimating the total value of your business, we’ve even created a handy online tool that you can access right here. This provides you with a quick and easy way to value your business online. It doesn’t have to be painful. Evaluating the total worth of your business starts with just a few clicks!

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How Do You Want to Be Paid?

Once you’ve discovered a fair sale price for your business, it’s time to decide how you want to be paid. As usual, there are multiple options — three, to be exact — and several factors to consider. Let’s look at the three methods of payment you can choose:

  • The “Lump Sum” Method: Plain and simple, this is the most straightforward way to bring home the amount of money your business is worth. Your buyer will take out a loan for the full purchase price of your business and cut you a check! It’s as simple as that.

The simplicity of this option is the beauty of it — you receive your money all at once, the deal is closed, and you can move on. If you’re looking for an easy, one-time payment, this option is for you.

However, it’s important to keep in mind that this is the riskiest option for your buyer. After all, if anything goes wrong and the acquisition doesn’t produce the projected growth, your buyer has lost a lot of money. As a result, buyers are more likely to offer the lowest amount of money possible, and you could end up paying for the simplicity of the deal.

  • The “Over Time” Method: This next method is still incredibly simple and straightforward, but it takes some of the pressure off the buyer to secure a high-enough loan upfront. With the over-time method, your buyer will pay you an agreed-upon percentage of the total value of the sale upfront and then give you a note for the rest. Then, you can either continue to receive regular payments on the note, or you can sell it to a company that specializes in note purchases.

Keep in mind — this method of sale still carries a significant risk for your buyer. Even though they’re no longer expected to pay the full amount of the sale upfront, they’re still committing to a specific dollar amount to be paid over time. That means that they’re still not going to offer you the absolute highest valuation you could possibly ask for.

However, there are significant advantages to this method. For one, your money is guaranteed — you and your buyer will still sign a contract agreeing to the amount of money to be paid. After that, you even have the option of selling the note to a note-purchasing company, further securing your profits. Additionally, because your buyer does not need to seek such a high upfront loan, they’re more likely to offer a higher valuation for your company, and over time you’ll make more money than you would from the lump-sum method.

  • The “Earn-Out” Method. The final method of selling your insurance agency or business carries the highest risk for you, but it also offers the highest rewards. Your buyer will pay you 60-80% of the value of your business upfront, and the remaining 20-40% will be paid out over time as your agency grows and produces net profits for the owning agency.

The earn-out method is often used to resolve discrepancies between the buyer’s and seller’s evaluations of the company. By making the ultimate price of the sale contingent upon your company’s ability to add to the profitability of the new owning company, your buyer absolves themself of financial responsibility if their acquisition proves to be less profitable than projected.

However, because the buyer has an added layer of security, they’re more likely to offer a higher price for your business should the acquisition become profitable. You take on more risk — you’ll need to ensure your buyer is trustworthy — but you have the opportunity to earn the highest possible valuation in the long-run.

All three of these methods are effective ways to earn a reasonable profit from the sale of your business. At the end of the day, it comes down to the amount of risk you want to take: Do you want to receive a lump sum upfront and walk away secure? Or would you rather take on a little extra risk for the possibility of earning more money in the long-run? The choice is up to you! And either way, Sunbelt Atlanta is here to help.

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Who Is Your Buyer?

You’ve calculated the total value of your agency, and you’ve decided how you want to be paid — now it’s time to find a buyer and close the deal.

Who do you want to buy your business? Are you planning to pass it on to a friend or family member? Is one of your employees ready to take on ownership of the company? Great! Even if your potential buyer doesn’t have the cash or credit necessary to purchase the company outright, there are newer forms of financing that can allow you to sell your company to your trusted successor in a way that works for everyone.

And if you’re looking to sell your agency to a larger company, a good sales broker can help generate interest for you. Business brokers can reach out to contacts in your industry and help you market your agency as a potentially profitable acquisition for larger companies. Then, you’ll be able to take a look at the competition and accept the most favorable sales offer for you.

When it comes to choosing the right buyer, remember — it’s important to do your due diligence. Even if you have a personal relationship with your hopeful successor business owner, it’s important to ensure that you’re putting your company in good hands. Ensure that your buyer’s goals and intentions for the company are in alignment with your vision, even if they’re looking to make some fresh changes. Also, make sure that they have the financial stability and management ability in place to successfully maintain and grow the company to new heights.

Your legacy is important — that’s why it’s essential to find a buyer who will honor and continue that legacy. Don’t be afraid to discontinue conversations with a potential buyer if you lose confidence in their ability to take good care of the company you’ve built — you don’t want to have any regrets. But if you find the right buyer for you, you can make the sale and walk away proud — you reaped your rewards, and your hard work will be taken care of.

Ready To Learn More About Selling Your Insurance Agency?

Sunbelt Atlanta was recently interviewed on Radio 1100 "Ask The Experts Radio Show" in Atlanta, GA and the topic of discussion was specifically on selling an independent insurance agency. 

We've embedded the interview audio below and provided the interview transcription for your benefit.  

Listen to the Interview (Audio)

Read the Interview Transcripts

Announcer 1:  Welcome back to Ask the Experts, brought to you by Custom Comfort Cooling and Heating. Now back to your host, Steve O. 

Steve: And we're back. We have another great expert that because of the times with COVID going on, there are people out there looking for maybe something new to do – maybe own their own business. We have now made a deal that we are going to have the Sunbelt business broker experts on with us every week at 9:30 a.m. And we'll be talking about how to sell your business and buy a business, and we're going to use different areas of business. 

For example, today we're going to be talking about insurance agencies. And we are so lucky to have our expert from Sunbelt Business Brokers, Laura Chapman. Good morning, Laura.

Laura:  Good morning. How are you?

Steve:  I'm so glad we're zooming in we're like catching up with the times. We used to do the show by phone.

Laura: Right, right. Yes, definitely interesting times.

Steve:  Laura, tell us about what you do with Sunbelt business brokers.

Laura: Well, I have been with Sunbelt since 2015. And I sell small- to medium-sized businesses, focus on technology businesses, and definitely insurance agencies. That tends to be my main focus. I also do service businesses. So, you know, any kind of small to medium-sized business is my focus.

Steve:  So Laura, I just want to preface the show because about 15 years ago, I was selling my business. And I tried to do a dumb thing and sell it myself. It was the biggest nightmare. Finally, a friend of mine told me, “you gotta get a business broker.” And I gotta tell you, I didn't even know business brokers existed. And not only do you exist, but Sunbelt Business Brokers, I've learned over the years, is one of the finest, most reputable business brokers out there. And you're not just in the Georgia area. You're throughout the country.

Laura:  Yes, we're actually worldwide. We're in 10 countries, and 250 offices worldwide.

Steve:  Well, it is so important. I think one of the biggest problems I had, Laura was the tire kickers, you know, and I found myself explaining my business to probably 80% of the people who didn't really qualify, if you know what I mean.

Laura: Right, right. Well, I can tell you, I was there myself. I've had three businesses of my own – had no idea that business brokers existed. And looking back, I left a lot of money sitting on the table and went through a lot of things that, you know, weren't necessary. I [wish I’d] known there was a business broker that could help me. The biggest thing was that it was not confidential. Everyone told me that my business was for sale. And that's a huge, huge thing. We want to keep it confidential. You know, there are a lot of pitfalls. For a seller when they're trying to sell on their own, they need to find a buyer that has enough cash and credit. They want to make sure that one can take out a loan to buy the agency; it's difficult for sellers to hide the fact like we said that it's for sale. And then you might try to sell it to a competitor. But once the news gets around that it's for sale, then you're more likely to get low offers. And that's when it's a problem. And that's what I feel like I experienced in my own personal business sales. And so, that's why I'm enjoying being on the other side of this, helping people so that they don't make the same mistakes I made when I sold my business.

Steve:  Absolutely. And I gotta tell you, because when you own a business, it's your baby. And sometimes you think it's worth a little bit more than it probably really is in real life. But you know, it's your baby. And I gotta tell you that I thought my business was worth a lot more than it really was. So that was one of the things that were hurting me, I had it priced out too high. But I didn't know better. So that's again, and what Sunbelt does, is, you really do due diligence, that is so important to you.

Laura: It is. We want to make sure that we get all of the information together. We don't want to know what you think your business is worth. We don't even ask you that upfront; we want to get all the information together first. And then what we do is we put it all together. And we run comps, and we have, you know, a few platforms that we use to get what a multiple of the industry standard to sell would be. And one, the main one that we use sits right on top of the SBA, so everything that goes through SBA, because through that platform, and that way, we're able to give you the highest and best selling price, you know what we believe that it can be sold for. And usually, we're pretty, pretty right on that most of our offers that we get are full-price offers, because the buyers know that the value is there.

Steve:  Exactly. And I think another thing, which we're going to talk about today, and we're going to be talking about how to sell your independent insurance agency. But I want people to know that you don't ask for money upfront, you get paid for what you do for your client. And I mean, you take a lot of risks. And people don't realize that they can call you up and make an appointment with you and come in and see you, and you're not going to ask for payment.

Laura: That's right, the same way, we don't get paid unless the seller gets paid.  

Steve:  You do so much work, Laura, before it gets to that point.  

Laura: We do. But we do not take any retainer fees. We just believe that you know,   we want to do the best we can, do the best job we can do to get it sold. And we sit with the seller, you know, from the beginning all the way to the closing table.

Steve:  So let's get to why should a seller (and we've kind of kind of gone over this) but I want to really target insurance agencies because that's one of your forte's. We knew that hiring a business broker to sell an agency. I gotta tell you, we've been kind of talking about this. Folks, please do not try to do this on your own. This. I mean, this is something that a business broker does all day long. And why try to save yourself a little money. The aggravation outweighs the money you're gonna save.

Laura:  Right. Yeah, you'll spend a lot of time and there again, you can lose employees. If they find out it's for sale. They'll get nervous. They'll want to leave and start looking for another job. So we've seen people lose their businesses just from the news getting out. So we encourage them to keep everything confidential. We keep everything confidential. On our end, we don't even let buyers have any information until they've signed a nondisclosure agreement. They have to agree not to reveal that the agency or any business that we have for sale is for sale. And we always make sure that any potential buyer has the financial capability to do so. We do a full buyer screening. And before we give them any confidential information, they have to go through that screening process.

Steve:   Yeah, I like the way. If someone from out of state maybe is looking to relocate and buy a business in the Atlanta or Georgia area, you have so many contacts. Around, as you said, not just the United States, but around the world.

Laura: We do. We have a lot of lender relationships, we have lots of relationships with CPAs and financial advisors all across the U.S. and very strong. Of course, in Georgia, we work with lenders, we like to try to send the information on the business and insurance agencies as we live them, we like to send them to lenders to go ahead and get pre-approval, so to speak, get term sheets, and that way, when we we get the buyer, we already have that part done, and then we can just introduce them to the lender, and a large part of that process has already been worked out. And so we just introduce them to the buyer, and then they kind of take it from there. And then we work all the way along the process with the lender very closely, and the buyer on behalf of the seller. And if there's a lease, we negotiate, you know, the lease with the landlord, and we do all of that, on behalf of the buyer, on behalf of the seller with the buyer.

Steve:  And Laura, I guess Sunbelt has negotiated so many sales that you know how to get creative, which is another thing because sometimes you can actually come up with a way to make it work for both parties.

Laura: Absolutely. Yes, every deal is different. And I think we have to get creative almost every time. So I feel like as long as I've been doing this, I still learn something new every day as well because we're always coming up with different ways to make a deal work. And the great thing is we have a really good team. So we can all pull together our ideas and our experiences. And maybe somebody else on the team has had that experience. And so if this is what you know, or this is how we overcame that, if it was a difficulty, we can kind of brainstorm together. And that makes a big difference when you have a good team to work with like that. You're not just kind of an island on your own.

Steve:  So what are some of the most important factors to consider when a seller is considering the sale of their insurance company?

Laura: Well, the first thing is that it's essential for a seller to make sure that they truly want to sell their business. You know, people choose to sell their businesses for a variety of reasons. There are a million reasons why somebody might want to sell an agency. And it's important for them to get a crystal clear idea of what their reason is. selling. Selling somebody's business is a big decision. Like you said earlier. It's like their child. And it is very emotional at this level; it is a very emotional decision. So we don't want someone to regret it. We want to make sure that they are ready to sell when they decide to move forward with the process. And we want to make sure that it's what they truly want to do. And then we want them to be able to proceed with confidence. And the second important factor to consider would be the actual value of the book of business. And that's for insurance agencies. It's very important to have the actual value of the book of business when trying to sell an insurance agency.

Steve:  We just got a Tweet,  a message from one of the listeners who actually use Sunbelt business brokers in Dallas, Texas. Saying “what a  great way to sell a business”.  This must be your cousin, Laura, that's writing.

Laura: I don't believe I have any cousins in Dallas. I do have one in Houston. 

Steve:  Isn't that nice? To have somebody listen to the show and say “what a great experience it was. And I could not have done this myself.” And that's kind of the key to all this.

Laura: Right. Well,  that's great to hear. It's great to hear that from someone that has had that experience. We do hear that quite often. And like I said, having sold three of my own [businesses without a broker], I can honestly say, I would never ever do that again.

Steve:  Oh, listen, I'm with you. I was finally smart enough after over a year to hire a business broker. I wasted a year. Laura, you know what we go through when it comes to selling a business. Imagine someone like myself who knew nothing about it. I knew how to run my business. I just didn't know how to sell it. But we're gonna go to break. Give everybody your phone number, how they can reach you.

Laura: It's 770-936-9099 and I'm an Extension 802.

Steve:  And what about your website?

Laura: It is www SunbeltAtlanta.com.

Steve:  Okay. But you cover actually all of Georgia, not just Atlanta. Is that right? 

Laura: Correct. 

Steve: Okay, because we get people out of the Atlanta area that listen to the show. We're gonna go to break. We're here with Laura Chapman. She's with Sunbelt Business Brokers, and we're talking about selling a business. We'll be right back.

Announcer 1: Sunbelt Atlanta their team is made up of seasoned professionals with more than seven years of collective experience selling companies. Their backgrounds and industry experience are as varied as the companies they represent. Some come from Main Street, some from Wall Street. Now collectively, Sunbelt Atlanta Business Brokers have closed hundreds of transactions and the companies they have sold range in size from 100,000 to $50 million in revenue and spanned all industries, Doreen Morgan owns Sunbelt Atlanta and she is one of the leading merger and acquisition advisors in the United States specializing in franchise and specialty distribution business models. For more than 15 years. Doreen has advised franchisors, multi-unit franchisees and owners of proprietary and patented products on short and long-term portfolio exit strategies and corporate divestitures. Sunbelt has helped hundreds of business owners in Georgia get the most value from the sale of their business. Sunbelt Atlanta Business Brokers are a full-service company when it comes time to sell or buy a business with zero upfront fees. So, discover the Sunbelt Atlanta difference and contact them today at 770-936-9099. Once again, that's 770-936-9099 or you can visit them on the web at Sunbelt atlanta.com.

Announcer 2:  Welcome back to Ask the Experts brought to you by custom comfort, cooling and heating. Now back to your host, Steve O.

Steve:  And this is the Ask the Experts radio show. We’re with you every Wednesday, from nine to 10, your drive time in the mornings, on 1100 am here. We're talking with Laura Chapman. She's with Sunbelt business brokers. We're talking about selling a business today and how to go about it. And Laura, how does a seller determine? I guess along with your agency what their business is worth?

Laura:   Right. Well, since we're discussing how to sell independent insurance agencies today, that's kind of what I'm gonna focus on. It does carry over into other businesses a lot of these things as well, but there'll be a few things that we're talking about. that's specific to insurance agencies. But there's a number of factors to consider. There are your total earnings. When we talk about total earnings of an insurance agency, there are a couple of key numbers to look for. And that would be the annualized gross commission. An EBIT to an EBITDA is Earnings before interest, taxes, depreciation and amortization. The annualized gross commission is exactly what it sounds like the amount of money that a business makes in a year. To calculate these earnings, we're going to want to add up all the profits and subtract the expenses. And then we adjust for any rent that might be paid, especially if it's an independent agency, they don't usually need a physical office, depending on what their clientele is. And if that's the case, that's something that can be added back. And then any other expenses that are not business related, that are paid through the company. And sometimes that's the case, sometimes it's not the case. But if it is, then we like to add those expenses back. So once we've done this, then, you know, sellers can have a pretty good picture of their total earnings. And then we can start to get a clearer picture of what the value of the business is. And just for, you know, agency sellers to keep in mind, most agencies do sell for three to four times the adjusted EBIT a predictor.

Steve: How do you figure growth?

Laura: Growth plays a big part in the value because it drives the agency value. If there's strong consistent growth, prospective buyers are going to look for that. And so they're looking for solid, consistent, repeatable growth. And that just helps the value of the agency. When we got a price that

Steve:  We're really targeting today on insurance agencies. How important are carrier relationships? And do they have an impact on the value?

Laura: They do. Buyers want to make sure that sellers have really good solid carrier relationships with reputable carriers, they want to have a stable book of business, and they have consistent loss ratios. All of these things are kind of considered what we call the perfect storm. It results in a positive income stream, which can factor into the sale value of an agency and what potential buyers are going to be willing to pay. All of that is just focusing on making sure that a seller is doing business with the most profitable insurance companies and the ones that pay more commission than others.

Steve:  Has COVID impacted the insurance industry?

Laura: Everybody needs insurance. So it hasn't impacted it at all. But, there have been times that you know, people had to look at where their money was going. And, and even though it's a necessary thing, sometimes you might have to pick eating overpaying your insurance. So I think that it did have a slight impact. But overall, we haven't seen it being a huge impact.

Steve:  Laura, if a person was interested in buying an insurance company, now there's insurance companies out there that specialize. Maybe they specialize in life insurance, or maybe they specialize in auto insurance. Is it better to look at an agency that handles all different areas of insurance?

Laura: Yes,. Buyers do like versatility. We do have a larger buyer pool for insurance agencies and independent and insurance agencies is what we look for. Then, if they're selling a lot of home and auto. That's the big thing. Life is kind of a little bit different.  A lot of times they're separate buyers that are looking for people that just sell life insurance. A lot of times those agencies just focus on one or the other.

Steve:  What is the transition period for the seller?

Laura: Typically a transition period is going to be about two to four weeks. Once it closes, and that would be included in the sale, anything beyond eight weeks, we usually recommend that to be negotiated as compensation. So if the seller were to stay on longer than eight weeks to transition the business, then the buyer would usually compensate the seller for that time. Anything up to eight weeks, we would consider that typically included in the sale. If a seller is interested in staying on long term, it would depend on whether or not the deal is being financed through SBA. If that's the case, the seller can only stay on for a period up to one year, because that's an SBA rule. A consultation agreement is always a good way to kind of negotiate to keep the seller engaged. And that's usually something if the seller and the buyer are both interested in, then we can work out negotiating a compensation agreement. Or we can stay on typically longer than a year,

Steve:  We've only got about 30 seconds left. Tell people why they should retain Sunbelt business brokers?

Laura: Well, I can tell you, if you have an independent insurance agency, and you're looking to sell it, the last one I took to market went under contract in three days. And we had it sold in less than two months. We know how to sell. We know how to sell your business. We know how to sell your independent agency insurance agency and we can get the highest amount for your company.

Steve:   And you are so good at what you do. You know, if you have an insurance company you've been thinking about, you know, maybe retiring, hopefully, we've  told you about Sunbelt Business Brokers because they are without a doubt the best. And what we're going to do is every week we're going to zero in on a different type of business.. And today has been insurance. And, Laura, you've done such a great job. Let's give everybody your phone number one more time.

Laura: It's 770-936-9099 and I can be reached at extension 802.

Steve:  Laura, thank you what a great job you've done today representing Sunbelt business brokers. As I said, Sunbelt will be back with us again next week at 9:30 a.m. with more expert information.Laura, thanks again. You did such a great job and we'll be back again next Wednesday from nine to 10 a.m. with more experts. Everybody have a wonderful week. Thank you for tuning in. See you soon.

Announcer 2: At Sunbelt, Atlanta their team is made up of seasoned professionals with more than seven years of collective experience selling companies. Their backgrounds and industry experience are as varied as the companies they represent. Some come from Main Street, some from Wall Street. 

Now collectively Sunbelt Atlanta Business Brokers have closed hundreds of transactions and the companies they have sold range in size from $100,000 to $50 million in revenue and span all industries. 

Doreen Morgan owns Sunbelt Atlanta and she is one of the leading merger and acquisition advisors in the United States specializing in franchise and specialty distribution business models. For more than 15 years. Doreen has advised franchisors, multi-unit franchisees and owners of proprietary and patented products on short and long term portfolio exit strategies and corporate divestitures. 

Sunbelt has helped hundreds of business owners in Georgia get the most value from the sale of their business. Sunbelt Atlanta Business Brokers are a full-service company when it comes time to sell or buy a business with zero upfront fees. 

So, discover the Sunbelt Atlanta difference and contact them today at 770-936-9099. Once again, that's 770-936-9099 or you can visit them on the web at Sunbelt atlanta.com.

Sunbelt Marketing

Written by Sunbelt Marketing