Are You Fearful of Selling Your Insurance Agency?
Article By: Keith Payne, Sunbelt Business Advisors
Fear: An unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat.
Fear is a major emotion when owners think about selling their agency. It's a profound change in their personal & financial lives.
- Fear of change
- Fear of identity loss
- Fear of seller's remorse
- Fear of how a recession may impact the sale
- Fear of selling for too little
- Fear of having enough income after a sale
- Fear of the unknown (what will my employees and insured think?)
Eventually, every agency owner will need to exit their business and ideally will provide themselves a long enough timeline to ensure a smooth transition. Key items that should be included during this timeline are:
- Get help from a professional on the value/selling price of the agency.
- Determine the amount you need to retire.
- Weigh your exit options (i.e., internal buyer, external buyer, family member, etc.).
- Assess the current market.
With all this fear and uncertainty, there's still good news for agency owners:
- If your agency is profitable and is expected to remain profitable, it is always salable.
- Agency buyers outnumber agency sellers by an enormous ratio - it is common to have 10-15 buyers for every agency on the market.
- A record amount of capital remains in the market.One of the most common metrics for agency value - multiples or earnings - remains steady.
So now what? Speak with your team of advisors - attorney, accountant, business broker, financial planner - discuss the above fears/questions, ask additional questions, and make a plan that will allow you to maximize your life's work!
Keith Payne is an insurance industry specialist/licensed business broker at Sunbelt Business Advisors. Keith has over 30 years of corporate and small business experience and has provided services and guidance to a variety of business owners. Contact him at (612) 730-1030 or email@example.com to learn more.