Exclusivefocus Summer 2012.pdf - National Association of ...

featurePreparing for the Future:The ins and outs of selling your agencyBy John McKenzieWhen the time comes to sellyour agency, the best approachis to be prepared.After meeting with the first potentialbuyer of my agency, I saw that it was difficultfor him to visualize the concepts ofthe income/expense/opportunity cycle. Iquickly learned that while I was an experiencedand successful insurance agent,I had absolutely no experience in sellingmy Allstate agency. It was clear thatI needed to develop a presentation thatwas easy for prospective buyers to followand understand.Since I only had one agency to sell, Iconcluded that I needed to become anexpert in sale presentation. I could not affordto “practice” on potential buyers. Seriousbuyers don’t come along every day,so each presentation had to count. Eachand every prospect needed and deservedto see an expert presentation on the specificsof my agency and I needed to devisea track to keep my presentations oncourse. What I decided to do was to developa three-ring, tabbed binder to helpkeep me focused when speaking with potentialbuyers. This was a great help, as Iwas able to stay focused on the conversationand avoid small talk during the presentation.Later, the information in thebinder became helpful for the accountantand attorney working with the buyer.I also decided it was best to avoid “chatterconversation” about the sale. Whenfellow agents casually inquired how thesale was going or if I had any offers, Iwould ask if they were interested in buyingmy agency. If not, I would close thatconversation. In my opinion, the WW IIsaying, “loose lips sink ships” applies tothis process. Conversations should onlytake place with interested buyers and,until the contract is signed, no one elseshould be privy to the status of the sale,especially Allstate management.It took me two years to sell my agency.Over that period, I had nineteen solidprospects. One never knows where abuyer may come from. You should listthe agency for sale on all sites available,including www.napaausa.org and www.allstate.com. Some financial institutionswho lend money for agency purchasesmay have buyers who are interested.Other agents in your area may know ofinterested customers or family memberswho want to buy an agency. Yourown customers may be a referral sourceas well. In my case, my final buyer hadworked as a licensed sales producer foranother Allstate agency and wanted toown his own agency.The Tabbed Binder– What to Include• Three years of your IRS ScheduleC with your Social Security numberblacked out. The income and expensesfor your agency are detailed on this36 — Exclusivefocus Summer 2012