Preparing to Buy an Insurance Agency

There are hundreds of different resources for buying and selling insurance agencies. Finding the right resources and understanding the process for the sale of an insurance agency can save you a lot of money and heartache in the long run. This article will explain the process you will encounter, including advice regarding being on both ends of the spectrum for the sale of insurance agencies; buyer and seller.  

Consider Your Investment

Sit back and think about how purchasing and running your own insurance agency is going to affect you personally. Make sure you have the available hours and financial abilities for this huge undertaking. Otherwise, you’ll not be able to sustain a successful insurance agency and end up wasting precious time and money.

The Time it Requires to Run an Insurance Agency.

Running your own business can take a large amount of time. Your dedication directly correlates with how successful your insurance agency will be. When looking for an insurance agency for sale, make sure you are at a point in your life that you can make your brokerage a priority.

Being a business owner does afford you some flexibility. However, you will still need to put the hours in. Everything from communicating with clients to managing a team can eat up your days. Take a step back and look at how many hours a day you will have to dedicate to running your insurance agency.

Budgeting for Your Insurance Agency Purchase

Buying an insurance agency is an investment. It’s a financial risk that can pay off long term. However, it’s smart to plan your budgeting around both the initial purchase and the ongoing overhead costs. Always make sure that your agency will be profitable

How much are you able to invest financially in your insurance business? You don’t want to end up in over your head and not have the money to sustain operations. Everything from the cost of your office’s physical location to your marketing costs should be factored into your budget. If you plan to have a team of employees, that’s a huge line item that should be added to your financial outlook. Make sure you take this into account when looking at insurance agencies for sale.

Maybe you have been putting money away for years to buy your insurance brokerage with cash. Perhaps you are financing your purchase with a business loan. Either way, it’s important to have a firm grasp on your budget before you begin shopping. This allows you to narrow your search and to be realistic about your expectations.


Do Your Research

When looking at an insurance agency for sale, half the battle of shopping for an insurance agency is knowing what you are looking for. Having a good grasp of your markets and the types of insurance products agencies in the area sell will help guide you in your search.

Check Out the Insurance Market in Your Area

Look at the market in the area of prospective agencies. Is there potential for growth? If the market is oversaturated with brokerages, you may be setting yourself up for failure. 

If you are looking at agencies in an area that isn’t geographically close to your current location, it’s important to check them out in person. Make sure you enjoy the environment and familiarize yourself with the area. Your comfort in your new location is essential when you are looking at insurance agencies for sale.

Know Your Insurance Products

Look deeply into the product portfolios of agencies you are interested in. You may have expertise in certain areas that would be better suited to certain agencies’ client base. The last thing you want to do is end up overwhelmed by learning on the fly and lacking the capacity to serve your clients.

If you are looking at an insurance agency specializing in home and auto policies, but your expertise is in life insurance, it may not be a good fit. Look for agencies that align with your areas of skill and knowledge. This will allow you the best transition to take the helm and instill confidence in your newly acquired clients. Do this before you make an insurance agency sale.


Evaluate the Value of your Insurance Brokerage

Make sure you are getting what you pay for when looking at an insurance agency for sale. You don’t want to overpay for a new brokerage. It’s imperative to check out the value and make sure it was assessed correctly.

Consider Physical Assets

Checking out any tangible assets included with the purchase price is vital. Make sure they are quality and worth the cost. Having an understanding of what is included is also a good tool to use to negotiate. 

Analyze the Profits

Take a good look at the current financial situation of an insurance brokerage that you are considering. What are their profit margins? Is revenue steady and consistent?

This will be a good predictor of how your insurance agency will run and if it will be successful long term. Sales records are a good indicator of future profits. Carefully evaluate the revenue streams and consider how you will sustain them to benefit yourself as the new owner.


Carefully Complete the Transaction

With any huge purchase, it’s important to be diligent about the details. Even a small hiccup can cause stress and financial implications. Having expert advice is also helpful in making sure everything goes smoothly when looking at insurance agencies for sale.

Secure Financing on an Insurance Agency For Sale

If you aren’t purchasing your brokerage with cash, secure your financing well before closing the deal. This will ensure that everything on your end goes off without a hitch.

If you have a current relationship with a bank or credit union, they may give you a great deal on a business loan. Your loyal business with them can lead to a better interest rate and higher loan amount. Making sure you are approved well before you complete the transaction can make things go more smoothly.

Retain Representation

As an insurance agent, you’re likely not an expert in legal and accounting areas. It’s a good idea to lean on trusted advisors regarding these fields to ensure your sale has all of the proper details included.

Have your lawyer review any sales contracts before signing. Your accountant can take a look at an insurance agency’s financials before you close the deal to ensure you’re making a smart move. This added input can help you make a smart decision and avoid costly mistakes.


When You’re Ready to Sell Your Insurance Agency

Whether you are retiring, moving, or just ready for a change, you may decide to sell your insurance agency. How you prepare yourself for the process and market your insurance agency can make all the difference in your sales price and profit.


Making the Decision

You’ve likely spent years, possibly decades, building your insurance brokerage and client base. The decision to sell shouldn’t be taken lightly. Consider your reasons for the decision to sell your insurance agency.

Determining your exact reason for selling can help guide you through the sales process. Maybe the workload of a large client base has become too much. This can help you market your business to younger, eager agents ready to take on a bustling business.

You might have built your insurance business up over time and are simply ready to retire. Maybe you have a strong insurance agency but need to relocate and can no longer run it. Marketing your brokerage as a well-established business will appeal to agents that don’t want to start from scratch.

Make sure your website is top quality to add value to your agency.

Determining the Value of Your Insurance Agency

It’s essential to decide on a fair purchase price for your insurance agency. You want to find a good balance between making the most profit and appealing to buyers. This is essential when putting up businesses for sale.

Think about what your insurance agency has to offer potential buyers. Be prepared to justify your pricing strategy and sell all of the great things your business has to offer. Whether you have an amazing client list or impressive insurance agency sales, make sure to be transparent on why your agency is worth the price tag. 


Marketing Your Insurance Agency For Sale

Once you decide on your sales price, it’s time to highlight your brokerage’s awesome assets. Marketing your agency takes skill and strategy. Try to think about it through the eyes of a prospective buyer.

If you were shopping for a brokerage, what features would stand out to you? What great benefits would you look for in businesses to buy? Find those great things about your agency and use them to market it to other agents in the market for their own brokerage.


Finding the Right Buyer

When looking for a buyer, you want to find one that syncs well with your mission. After all, some of your clients have likely been loyal to you for years. It’s your duty to them to make sure they are taken care of in the future.

Look for a qualified, knowledgeable agent to transition your business to. You want them to be ready to take the lead and responsibility of managing your client list with minimal disruption to your service after they buy. 


Making the Transition From Insurance Brokerage Owner

Plan to help make the transition to new ownership go smoothly. Your new owner and clients will thank you. Plus, you’ll keep your great reputation intact as you help make the process as optimal as possible for everyone involved.

Take the time to show the new owner the ropes if possible. Guide them through your existing processes and systems. Try to make yourself available to them in the early days of them running the business. 


Selecting a Listing Site For Your Insurance Agency for Sale

Finding the right place to list your agency is essential. The number of online options makes this easy. Look for a site that can reach a wide audience of agents and is tailored to fit your needs.

Different websites have different options. Your unique needs and preferences can help you decide which one to use. A combination of listings can be helpful if you are trying to sell quickly. 


The Best Sites for Buying and Selling Insurance Agencies

Marketing an insurance agency on sale can be a daunting task. We’ve compiled a list of the best sites for selling your insurance brokerage online.  


Insurance Journal

This is a unique option as it’s also an online publication that targets insurance agents. Listing on the news webpage can get your agent seen by the many browsers on this highly trafficked site. 

The great thing is that listing your agency on Insurance Journal’s site is absolutely free. When you find the right buyer, they simply ask that you pay a $1000 finders fee. This is a great low-cost option to get your listings tons of exposure at no risk or initial cost.


Agency Equity

Agency Equity is another good option for listing your business. With intuitive tools, it can guide you in creating the best sales strategy. With an Agencies Wanted section, the site provides an effective way to connect with potential buyers.

Your first basic listing is only $49, and you can upgrade to a premium listing for $79. This gives you four months of great exposure to the 15,000 visitors on the site

The site has some effective tools for planning your listing. An agency evaluation tool can help you pinpoint the right price. It also has a prescreening tool to make finding serious buyers more manageable. 


General Insurance Brokerage

General Insurance Brokerage is a promising tool to list your insurance agency. They can assist you with evaluating your agency’s worth and close the purchase with your agency with a buyer. 

This easy-to-use site offers a free consultation to jumpstart the process. Also, there is never a fee to the seller, making it a super affordable option. 


Right Choice Agency

Right Choice Agency’s employees are experts at the art of selling insurance agencies. They can provide guidance on everything from financing to valuing your business. They offer a quick process ensuring a sale sooner than other platforms. 

With Right Choice, you can receive a free initial meeting to discuss the process and your unique situation. They will create a plan to sell or acquire your agency custom to your needs.


Biz Buy Sell

Biz Buy Sell provides you with a more general approach to selling your agency. The site hosts listings from all types of businesses, possibly giving your agency more exposure and reach.

The site boasts 10.7 million monthly views, an impressive amount of traffic. It can also cross-list your agency on other webpages and partner sites. With their tools and free guide on selling your business, you will be confident in your price and the process as you connect with buyers. 


Selling Success

Successfully selling your insurance agency can be a great feeling. Accomplishing this transaction is a huge step in making a profit and moving forward. Finding the right site to facilitate your sale can make the entire process go much more smoothly. 

Facilitating the proper planning and research can bring the rewards you crave from selling your business. As you sell your insurance agency there are many free tools that can help stay in communication with your previous clients. Consider Podium to stay in touch with old clients or help create new ones as you sell one business to start another. You can even get started with Podium for free today.

Jeffrey Child
Jeffrey Child Director of Financial Services Named Accounts

Jeffrey Child is an insurance and tax professional at Podium, the leading messaging platform that connects financial service businesses with their members and prospects.

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