Start exploratory conversations as early as possible
THIRD OF FOUR INSTALLMENTS
BY AMY EVANS
In October 2021, my employee benefits agency was acquired by Shorepoint Insurance Services, an Acrisure agency partner. I joined Shorepoint as an Associate VP of Employee Benefits. California Broker Magazine editors asked me to write about my experience in a four-part series. In the previous installment, I shared the steps I took to position my agency for sale. In installment three, I’ll share my process for finding the right buyer, and some things for agency owners to consider if they engage in the sales process.
Be open to conversations (even before you are ready to sell). I mentioned in my first installment that I’ve always been open about wanting to have a strategy that would allow me to make a graceful exit from my business when I was ready. At conferences, industry association meetings and on social media, I had exploratory conversations with recruiters, M&A specialists and people who sold their agencies and were willing to share their experiences with me. Through these conversations, I was able to gather information about who was buying, how they were buying, and what I could expect when I was ready to sell. If you’re considering selling your agency, start the conversations as early as possible so that you are well-informed and have good resources in place when you are ready to move forward.
Be clear about what you want for yourself and your clients. The process of selling your agency can be overwhelming (more on that in the fourth installment) and it’s important to be really clear about what you want so that you can stay on course. I truly believe there is a buyer out there for every seller and that you can structure a deal that fits your needs. It’s also important to remember that you are the person who is the most capable of acting in your best interests, so decide what you want and then ask for it. Here are some of the questions I considered when looking for the right buyer for my book of business:
● Are you ready to kick your sales into high-gear or are you ready to downshift?
● Are you looking for the same level of independence?
● Do you want a bigger service team for your clients?
● Do you want the opportunity to cross-sell into your existing book of business to generate more revenue?
● Do you want to manage a team of people?
● Do you want more learning opportunities?
Consider which factors will make for a smooth(er) transition. A significant part of selling an agency or a book of business is moving your clients from your systems to the buyer’s systems. There will be change — for you, your clients, and the buyer — but it’s possible to minimize the upheaval by looking for a buyer whose systems have some alignments with yours — agency management, enrollment platform, human resources support, file sharing.
Also, consider which carriers you write the most business with. Does your buyer have a good, or even preferential, relationship with those carriers? If they do, that will make it easier for the buyer’s service team to support your clients. Even better, if your buyer is a top producer with those carriers, you may actually get better support, better underwriting and even better commissions as part of the sale. Becoming part of a larger organization often comes with leverage you may not have had previously.
Focus on the “who” more than the “how.” One of the best things I did for myself early in the acquisition process was accept that it was going to be stressful and that things were not always going to go the way I expected, or even the way the seller expected. There was no way I was going to completely understand the “how” part of the process. So, instead, I focused on the “who” part:
● Who were the people I was considering selling to?
● What did other people say about them (especially carrier reps and general agency reps who had working relationships with them)?
● How did I feel when I was in a room with them?
● Did I trust them and believe that they trusted me?
● Did I feel like there were things I could learn from them?
With all of this work done in advance, I felt well-prepared to engage in conversations with prospective buyers when opportunities presented themselves. I was able to rule out the wrong ones quickly. The right opportunity was clearly the right opportunity when it came along via a personal introduction from a friend who was acquired by the same buyer the previous year. In my fourth and final installment, I’ll talk about some of the emotions I went through during the acquisition process, and wrap up with some valuable lessons I learned.
AMY EVANS is now associate VP at Shorepoint Insurance Services. She has more than 20 years of experience in the insurance industry simplifying employee benefits for employers and their employees. As an associate VP with At Shorepoint, Amy works with employers to help them navigate the complex world of employee benefits, business insurance and risk management.
Amy is passionate about empowering professional women to network more effectively. In 2019, she founded AlignWomen, a leadership and networking organization for professional women. She is also the host of The AlignWomen Podcast, which features female entrepreneurs, leaders and other professionals who have demonstrated agency and innovation in their personal andprofessional lives.