Acquisitions for Agency Owners: Blue or Red Pill? Three Turning Points That Lead Agency Owners to Sell

March 19, 2024

“This is your last chance. After this, there is no turning back.” Have the immortal words of Morpheus in “The Matrix” ever echoed in your mind when thinking about your agency’s future?

Many factors can drive an agency owner to sell. Here are three of the most frequent and influential factors observed before an acquisition:

1. The desire to shift focus and energy back to leadership and sales

As agency owners transition from sales and leading their team to managing a growing enterprise, various responsibilities like accounting, HR, IT and other day-to-day business operations can become very time-consuming. Faced with a desire to return to their core strength and passion of selling insurance and leading a team, many owners express common sentiments:

“I’m not an IT person or an accountant – I just want to sell and focus on leading my team.”

“My business has grown in size, but it’s also grown in complexity.”

There are, however, solutions to alleviate the burden. By joining a team with a network and a strong back-office, you can rely on their established business capabilities and resources to run the day-to-day, allowing you to shift your focus back to what you do best. Many owners find renewed passion and productivity after selling their business and concentrating on their customers and their team without worrying about the daily business management.

2. Taking the business to the next level and push through the ceiling

In the unpredictable journey of business growth, hitting a ceiling is not uncommon. Whether it’s plateauing networks or lack of capabilities and resources to go after the next level of customers, your business could reach a standstill.

Joining a larger company can help you gain further leadership opportunities by working alongside other leaders who have grown their businesses within that company.  You will also gain access to that company’s network of carrier relationships and proprietary products and capabilities, helping you reenergize your business.

The life cycle of a business rolls out in stages. It is possible for a successful business to plateau, needing a rejuvenating spark to continue its trajectory. Ultimately, you might have more gas in the tank than you think. You just need to unlock the next level.

3. Personal circumstances can influence acquisition timelines

Life’s unpredictability can abruptly shift priorities, prompting agency owners to reconsider their paths. Family, health and life circumstances can change quickly, forcing a shift in priorities.

Thus, it’s important to consider flexible deal structures that align with individual values and goals to make it a win-win for both you and the buyer. There is no one-size-fits-all deal structure, so having an honest conversation with the potential buyer can align the purchase structure with your personal values and goals.

Whether you are a young producer seeking a long-term partnership or an owner planning a structured transition towards the end of your career, tailoring an acquisition to your specific needs ensures a customized, mutually beneficial future.

What’s your story?

Maybe you felt a nudge from one of these factors. If you are considering a transaction, taking the time to weigh the influences will add clarity to your decision-making process. If you want to ensure that your team, customers and local community will remain a priority after the sale of your business, consider joining the Brown & Brown team.

Interested in speaking with our Mergers & Acquisitions team?
Email acquisitionsdept@bbins.com or contact us directly below. 

Acquisitions for Agency Owners
2024 Insurance Mergers & Acquisitions Outlook
by Vaughn Stoll, SVP & Director of Acquisitions
co-authored by Mark Prampero, Regional Director of Acquisitions

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