Did you recently go public about having an insurance business for sale? If you are a first-time seller, be warned – countless buyers are out to blow up deals for unbelievable reasons. There’s no shortage of tire kickers who are full of hot air but don’t have the money to buy your agency. To avoid wasting time with any of them, you should learn how to maximize your business’ sale price.
Tips to Help You Maximize Your Insurance Business’ Sale Price
Get Your Financial Records Straight
Lack of financial data is one of the top reasons why insurance agencies fail to maximize their revenue. It’s best to separate your commission statements by month, year, and carrier before you save them in a central location. Be sure to maintain a spreadsheet that shows this breakdown. If you write Excess and Surplus (E&S) business, don’t forget to prepare a profit and loss (P&L) statement and keep track of related commissions.
Confirm the Buyer Has Funding
Did you know that it’s possible for a buyer to suddenly realize that they don’t have the financial capability to purchase your business after taking the deal to the day before closing? When this happens, you’ll be forced to go back to square one.
Therefore, it’s extremely important to confirm that the buyer has funding by requesting proof of funds. You may also ask them to give you a copy of a pre-approval letter from their bank and request that they submit this one the same day they submit the initial offer.
Have the Buyer Sign a Non-Disclosure Agreement
One way to protect yourself when selling your insurance agency is to have your prospective buyers sign an NDA. Furthermore, this should happen before you even think about discussing confidential business details.
Hire Representation
Hire someone to represent you to ensure persistence with the potential buyer while maintaining your leverage in negotiations.
Is Your Insurance Business for Sale?
So, if you’re planning to sell your agency, contact Energia Consulting Partners LLC for advice on the next steps. Schedule your appointment today!