Who Tends to Buy
- Larger agencyAdds your policies and staff to an office it already runs.
- Producer who is ready to ownWants to buy the agency they have worked in.
- Agency roll upBuys books of business in a region and combines the back office.
The book of business
An agency's value sits in its book, the set of policies and clients that renew each year. Buyers study the commissions, the lines of business and the age of the accounts.
Break out personal, commercial and benefits business. A buyer prices each line by how reliably it renews.
Retention rate
If you keep most clients each year, a buyer sees a stable book. Show retention over several years and explain any loss, such as a carrier leaving the market.
Carrier contracts
Your carrier appointments and contracts matter. A buyer will check which carriers hold your business, how concentrated it is and what terms apply to a sale. Some carriers must approve a change in ownership.
Producers and staff
Clients often feel loyal to a person, not a building. If the owner holds most relationships, a buyer will ask for a transition and perhaps part of the price tied to retention.
Licensed staff need to stay through the handoff, so talk to your team with your broker's advice about timing.
What to gather before you list
Assemble a policy count by line, commissions by carrier and retention for the last three to five years. Add your producer agreements, your agency's licenses and the contract terms from your main carriers.
A buyer will also ask about your errors and omissions coverage and any open complaints. Having clean answers keeps diligence short.
Plan the handoff with care, since clients follow people. See transition time and noncompete terms.
What helps the price
- A clean, well documented book with steady renewals
- Clients spread across several carriers
- Producers who are likely to stay
- A written plan for introducing the new owner
The structure of payment matters, including seller notes, covered in how SBA financing shapes your sale price. For a figure, request a private price range.