How to sell an insurance agency

how to sell an insurance agency

The first step to the successful sale of an insurance agency is an objective evaluation of its strengths and weaknesses by a competent professional specializing in insurance agency business sales.

Agency owners often have trouble establishing realistic selling prices. Wishful thinking may sometimes produce inflated prices. On the other hand, some owners tend to understate the value of their agencies.

When operating a business, it is sometimes thought to be prudent to minimize reported earnings and reduce taxes. But when selling a business, prospective buyers must see a true picture of its profitability and cash flow.

A thorough business evaluation can include scrutinizing the financial statements to establish the actual available cash flow by eliminating excessive owner compensation, perks, nonessential and nonrecurring expenses and owner's debt service. Assets, both apparent and hidden, must be assessed and restated to reflect true values.

The evaluation should analyze other factors such as competition, market position, insurance carrier representation, customer base, employees and improvement potential.

The final price and terms of a sale will be developed using all of the data contained in the Evaluation.

The analysis of the MKL Acquisitions Team can help you decide how much you want to sell your Agency for in today’s insurance market.

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WHO CAN I TRUST?

The MKL Acquisitions Team are experienced Business Brokers. As such we pride ourselves in our professionalism and performance. We honor your confidentiality and work hard at closing your transaction for you. We will not accept an engagement (listing) unless we feel strongly that we can help you achieve your goal of selling your insurance agency at the price you want.

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WHAT IS THE COST?

MKL offers 3 Options to help you decide how we help you sell your business

MKL offers 3 Options to you that give you the flexibility to determine what exactly your cost will be to sell your Agency at the price you feel its worth!

CAN I SELL IT CONFIDENTIALLY?

Can I sell my Agency without my employees, my customers and my markets (suppliers) knowledge?

Absolutely! Everything we do at MKL Acquisitions is done to protect you and your business from anyone finding out that you have decided to market your business until such time as a transaction is in the final stages of the process.

WHAT IS THE PROCESS LIKE?

The MKL Acquisitions Team meets with the business owners and asks a multitude of questions and combines this with their experience and research designed to allow the MKL Acquisitions Team to get to the answer of this one important question:

1. Is this business saleable; and if so, at what price?

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DO I HAVE TO DEAL WITH EVERY BUYER?

Screening potential buyers is one of the most important benefits a Business Broker like the MKL Acquisitions Team can provide for you. Keep in mind that roughly 90 percent of those who respond to business-for-sale ads are either not serious buyers or are not financially qualified. By screening prospects, the business broker will contribute to confidentiality by limiting the exposure of the business to the most promising buyers instead of the merely curious time-wasters.

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Confidentiality is of primary concern in searching for sellers or buyers. A seller generally cannot prospect for buyers without revealing their identity. They often make the mistake of turning to people they know within the insurance industry. Despite efforts to keep things confidential, the owner’s intention all too often becomes common knowledge.

Sellers do not always have ready access to qualified buyers. Neither do buyers always have access to interested sellers. There are typically far more buyers than there are profitable insurance agencies for sale. We can provide optimum access to both buyers and sellers while still maintaining strict confidentiality.

Selling your business is not something that will happen overnight. This is a sensitive complex process that when done right not only finds you the RIGHT business buyer, but also protects you from worrying about the sale being disclosed to your employees, suppliers, customers, clients, patients and competitors prior to the time it is necessary for them to know. The MKL Acquisitions Team works hard to maintain your trust and does not waste your time with unqualified buyers.

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Separating qualified buyers and sellers from the mildly curious is an art mastered only by the experienced specialist. Buyers and sellers coming to MKL Acquisitions are thoroughly interviewed before the identity and any specific information about a buying or selling agency are revealed.

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INTRODUCING THE BUSINESS

Introducing a prospective agency buyer to an agency seller business involves a great deal of expertise in pre-qualifying both parties. Both buyer and seller must gain a feel for the business of the other by viewing an operation firsthand and by discussing its many facets. Our role as an intermediary of utmost importance at this point, as we assist in discovering and addressing any concerns that a buyer or seller might have.

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Once a buyer and seller signals an interest to move forward, the most critical step in the selling process begins. Some proposed business sales never close because of relatively minor stalemates in negotiating. Even some deals which do close falter during the negotiation process. Our communication and people skills will serve to keep a good deal going when it might otherwise lose momentum. Our skilled use of the following major aspects of the art of negotiation will benefit both buyer and seller:

a. Mediation: Negotiating an insurance agency sale is an arduous, emotional process. As face-to-face confrontations progress, sellers and buyers sometimes become less flexible. They may become more concerned with holding their positions than with finding a common ground.

MKL Acquisitions serves a vital role as a third-party mediator. Instead of focusing on dollar amounts or other areas of disagreement, we encourage the parties to concentrate on their primary areas of compatibility and the development of a mutually beneficial agreement.

b. Deal Structuring: Technical expertise, flexibility, and creativity are the key components necessary to develop an approach that is economically feasible for both parties. Of all the elements of a business sale, structuring the transaction can be the most difficult and the least understood. The following are representative samples of some of the various deal-structuring factors which may be considered:

· E. B. I. T. D. A.

· Stock Redemption

Source: iaseller.com

Category: Insurance

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