You’ve always wanted to pursue your dream of being an insurance business owner. However, when you don’t know what to look for, your options may seem daunting each time you browse through insurance agency listings.
Things You Should Know Before You Purchase an Insurance Agency
Your Reasons for Buying
Since buying an insurance business can be a huge investment, you wouldn’t want to do it for the wrong reasons. For instance, being a “people person” won’t be enough to sustain your ownership of the business long-term. In contrast, you’re probably on the right track if you’re passionate about the insurance business and view this as a golden opportunity to build your dream agency.
If you’re purchasing an agency “as is”, you’ll have to make sure that you understand the market. To help you assess whether or not you’ll be able to reap consistent profits, find out about any fluctuations that may have occurred over time. Lastly, you’ll have to know everything there is to know about the area, demographics, and the demand for your insurance products.
The Seller’s Motivation
Why did the seller put the agency on the market? Unless you’re willing to run the risk of ending up with a failing business, you’ll want to find out if the seller is simply ready to move onto a new business venture or retire.
The Seller’s Valuation of the Agency
It’s extremely important to understand the valuation process that was used by the seller to determine the agency’s purchase price. Find out if the agency is profitable and understand where the profit comes from. You should also assess the physical assets that you’ll be acquiring as part of the purchase, the sales records, the quality of employees to be retained, and the agency’s financial and risk management.
Learn How to Navigate Insurance Agency Listings!
To help you find a secure investment with great returns, get in touch with the team of experts at Energia Consulting Partners, LLC. We can give you the tools to make purchasing your insurance agency easier!