How to approach an agency not listed for sale?

[gamecockindependant]

Hello all-

I have been a company underwriter for 8 years. Losing my job at year end and taking the plunge to buy an independent agency. I live in a small metro area and to my knowledge no agencies are for sale.

I have found a target agency and would like to solicit advice on how to approach an agency not listed for sale. Owners are 62 and 59, my hope would be to work side by side with them for 5 years and hope for owner finance to supplement there retirement.

Otherwise where can I find information on agency financing or consultants to aid me in the process? I am very interested in buying in an agency and eventually assuming full ownership. I need to identify the agency in next 12 months and move into full ownership within 5 years.

What can I expect to pay on commission income? 1.5X, 2.0X This agency is around $2M, mainly personal lines, standard and nonstandard appointments. In business since 1960. Agency is very complacent and needs an active producer like myself.

If this one is not for sale I will keep pursuing and want to approach and owner with a business/finance plan in hand. Just don't want to offend an agency owner.

[scott]

Get a mutual friend to introduce you to the agency owners.

Fifteen years ago I was looking to do the same thing you are. I had a company marketing person I knew well to introduce me to the agency owner. His pitch was, "I know a guy looking to get into an agency where there is future opportunity for ownership. Are you interested in meeting him?" A week later we were having drinks. Two weeks later we had a deal.

[wlunday]

Hey, gamecockindy...
Scott is right about the introduction. Many small agency owners are interested in a perpetuation plan, and currently have none. Your attitude is great about working your way into the agency, starting as a "junior partner" and working your way up over a few years. If you mesh with the current owners, great. If you don't, then they will still be in a position to buy you out and do something different.
A properly written buy-sell agreement, funded with both life insurance and disability income policies should be in place from the onset. And, before any handshake, find an independent, competent agency appraisal service to properly value the agency. In that way both you and the sellers have assurance that the value is appropriate. There are lots of formulas for estimating the value of a business, but each one is unique so please hire a pro to help you. And, good luck in your new career!

Wayne Lunday, LUTCF, CLU, ChFC

[carlos gil]

We can help you get your own agency off the ground quickly visit www.fiestafranchise.com.

[sunflower_gal]

I think your plan appears well thought out and that you are on the right track. I like the previous poster's recommendation on having a mutual friend make the introductions.

If the agency you are looking at currently turns out to be uninterested, you can check out http://www.agencies4salelistings.com for additional insurance agencies for sale or post a message on that site on what you are looking for in an ideal agency.

Best of luck!

[ncoghill]

Hi - the Insurance Journal.com website offers the ability to post "Agencies Wanted / For Sale" advertising.
The site attracts over 250,000 viewers per month from the P&C insurance industry and beyond.

Ads can be tailored to target specific locations and there are no limits to the amount of text you upload.

The site is self serve, so ads can be uploaded and paid for online 24/7 - just visit https://www.insurancejournal.com/classi ... eatead.php
click on the most appropriate ad package (4 weeks or 8 weeks) and then follow the online prompts to upload your text and create a free account, to enable you to log in whenever you like to make changes to the text.

You can also check out some of the existing ads posted:
Agencies for Sale: http://www.insurancejournal.com/classifieds/?cat_id=1
Agencies Wanted: http://www.insurancejournal.com/classifieds/?cat_id=2