There comes a time when every independent insurance agency owner thinks about selling their business. Whether the motivation is retirement or the lure of a hot sellers’ market, selling the agency should be done with a lot of forethought and careful execution. An M&A Broker, such as Hines Ball Advisory Group, can help an agency owner understand the path to a sale and navigate the market for the best opportunity.
To understand whether going to market makes sense, the owner should find out what the agency is worth. If the value is well below your desired outcome, the timing may not be right to go to market. However, is your desired value realistic? No owner should get caught up in the folklore of a dream exit they heard of or were told about. The only story that matters is yours. Every buyer and every seller have different motivations and values at different times.
If the time is right, get your ducks in a row and go to market. One of the best tests of value is what the market will yield. This is where Hines Ball and other brokers can really shine. Having our pulse on the market, we know the who, what, how much, and other key elements as to the opportunity for the agency’s salability. Identifying potential buyers is key to a successful outcome for the agency owner. If the buyer for the agency is identified by the agency owner (current employee, family member, long time affiliate agency) the agency still needs to understand deal structure, value and how to successfully navigate the sales process. One oversight can be detrimental to the future success of the transaction.
Once the broker has a couple of potential buyers identified the process really heats up. Introductions are made where both parties seek that initial spark to determine cultural fit. Hines Ball believes preparation for these conversations is key. The future of the agency and what this will look like is a key discussion topic. Will the seller stay on for an extended period, just through the transition or is the seller looking to help take the agency to the next level? Other topics are large accounts, staff retention, and the agency’s atmosphere. Deals can go south from one misspeak in a conversation that causes trepidation and concern. Understanding how to bridge these conversations and patch over concerns is how a broker can make deals happen with the best possible outcome for both the buyer and seller.
With an agreed upon deal in hand, both sides will need to complete further due diligence. The buyer will examine every detail of the agency for assurance of what they are purchasing. The seller will vet the buyer’s financial capacity and plans for the agency’s future. Due diligence paints the picture for all parties as to what they are truly selling/acquiring. The importance of truthful and accurate data gathering will enable the deal to move smoothly and within expected timelines.
Now the time has come to complete the transaction and finalize the deal. This is where the parties complete the purchase agreement terms, future transition and employment agreements, and the integration/transition plan. Many parties will be involved in this finalization besides the buyer and seller. The accountants, lawyers, staff, financial institutions, carriers, and other key vendors will all be involved in this finalization of the transaction. The journey is full of conversations and stakeholders whom the broker will help keep on task and working towards the final successful transaction.
The right partner can make all the difference when you sell your agency. Hines Ball Advisory Group has their pulse on the industry. Knowing the current market, they connect buyers and sellers in win-win relationships. They listen to the sellers and buyers and ask the right questions to fully understand the outcomes both parties’ desire. They will ensure all parties are on the same page each step of the transaction.
Contact them today at (440) 856-5111 or Gary@Hinesball.com to discuss your goals.
When it comes to selling your agency, do not venture this journey alone. Contact Hines Ball Advisory Group or another professional to help you complete what may be the most financially crucial decision of your professional career. Hines Ball Advisory Group has the professional expertise to connect you with the right buyer while driving a higher return for your sale
