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How to Achieve Your End Goal for Your Independent Insurance Agency

Posted by Scott Tietz, CLU on Wed, Jul 24, 2019 @ 12:00 PM

You've built your agency  now what?

As an agency owner, you’ve put in the years of work — sometimes 60-80 per hour weeks. Maybe you even had to spend time away from family to get the thing off the ground just so you could have the lifestyle you want now. I know I did when I started Partners Advantage over 20 years ago.

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When you hung out your shingle and opened your doors to a career in recruiting, training and supervising agents – you had an end goal that would make all your hard work worth it. In my experience, most agency owners build their business with one of three exit strategies in mind.

What was yours? And what are you doing today to prepare for the future?

This blog post can help you get back on track to achieving the end goal you set when you started your agency: 

Did You Build to Sell?

If you built to sell, whether that timeline was 3, 5, or 10 years down the road, you must continually build value so that when you find the person to buy your agency, you’ll be able to sell it at profit. Have you taken the time to consider how long it will take to find the right buyer? Will you find a buyer … at the price you want to sell?  Have you done all the groundwork and established all the procedures so you can quickly and accurately get through a due-diligence process? With the build to sell approach, you will always put a significant amount of energy in building an agency in order to sell it down the road, and here are a few practical ways to increase the value of your agency:

  • Identify and continue to develop your niche — whether that’s a territory, product line, or market that you can dominate.
  • Invest in marketing and technology
  • Explore new market segments and increase cross-sells
  • Cut costs and increase efficiency
  • Get rid of debt
  • Have a good middle management team to help run the company to be less dependent on you
  • Team up with an IMO that understands you want to sell — get mentorship!

I’ve been approached by many agencies to buy them, and in some cases, it was the right fit and we both benefited from the sale. In other cases, we either missed on the timing or on the opportunity. At Partners Advantage, we’ve built a robust team to help guide you in order to position your agency for a potential successful sale. If you’re even thinking about selling your insurance agency, whether that’s two, five or ten years down the road, we’d be a good sounding board to help walk you through the process we’ve used over the years. 

Did You Build to Retire and Leave a Legacy?  

Maybe you set a tentative retirement date when you’d move to Mexico, golf your days away, and live off the dividends while leaving the business in the capable hands of your family or an internal successor you trust.

If this is your goal, you need to figure out who wants to take over the business and make sure that’s in line with who you’d like to take over when you’re no longer involved in the day-to-day. Even though you might have selected a right internal candidate to run the show, for some people, it’s hard making the transition from employee to manager, and there are a lot of mistakes that can happen along that path. Ultimately this person, or persons you identify, may want more than just a paycheck and day-to-day management responsibilities, which is why you need to put a process in place to transition ownership, at least a portion at the beginning.

Take these steps to put that into place:

  • Hire a leadership team that shares your vision, mentor them and in some cases — offer part ownership now
  • Create a timeline for transferring full ownership
  • But keep your timeline fluid — many things can change the date you set, such as health, financial responsibilities, or you just “being ready”

With the build to leave a legacy, you’re still going to want to think through and build out internal processes so that the business continues to run smoothly as you gracefully ride off into the sunset. You put a lot of blood, sweat and sometimes tears into building your business, and having a robust business process makes that transition go smoother. You want to ensure the people you served over the years, continue to enjoy that same level of support, especially once you’re not around to make sure things go right.  If you need any help in building out those internal processes to run your business, we can help put you on the right track so that your transition goes more smoothly.  

Was Your Plan to Work Until You Die?

If you want to stay in the business for as long as you live because you love what you do, that’s great, I applaud you. But it’s important to take into consideration that working into your later years can take a mental and more likely physical toll on you. When you are physically and mentally drained in the later years, this typically leads to a lag in your business because you’re not as actively involved in growing the business, and let’s be honest, this is a very tough job.

What are you doing to prevent the business from going downhill as you and your agents age?

Take these steps to help prevent that from happening:  

  • Seek out new lead sources and add new producers
  • Have a solid support staff in place who know how to run the day-to-day operations of the business
  • Create an emergency plan

I know we’re all in the life insurance business, so maybe this goes without saying, but I hope you have some sort of life insurance or estate plan in place so that you don’t leave your loved ones with a mess trying to unravel your ownership.  If you have employees that have been with you throughout the years, if you die in the business, will their jobs die too? I know that’s never the intent, but unfortunately sometimes that’s the reality. If you’re planning to work until you die, you need to have a plan to ultimately transition the business so that it can survive.


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This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

The information provided should not be construed as an offer to buy or sell a security or any ownership interest in another organization by Partners Advantage- A Gallagher Company.. An offer to buy an insurance services company or other type of business entity is made by a formal written document following a due diligence period and review of the applicable laws of the appropriate jurisdiction.

Partners Advantage- A Gallagher Company and their representatives do not give tax or legal advice. You should not treat any opinion expressed by the author as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion and experiences. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.