Listing ID: 77326

Business Overview

11,000+ PIF Count Preferred California Insurance Agency – (Or Book Only!)

Once in a generation acquisition target for a PEG, MGA, insurance carrier level (to rewrite yourselves), or large insurance agency that is looking for a long term cash flow / ROI play. Retention rates in the 90’s, loss ratios in the 50’s across the entire book and all carriers. Heavily concentrated in one popular preferred carrier with a commission rate of 15%, primarily P&C personal auto, with about 15% home and 5% commercial.

There are two golden geese in this acquisition: 1) This is a cross sellers paradise. Here lies a pool of 10,000+ health insurance cases, life insurance cases, annuities/AUM type targets, additional commercial accounts/business owners, the sky is the limit. Assuming only 10% penetration you have an additional 1,000 customers ACROSS EACH DIVISION!! Maybe more is possible, depends on the acquiring entity. 2) Seller is a master at operations management and extracts an industry best production and net income level on a per employee basis. Sprinkle some of that secret sauce into your organization, and consider how much more profitable would you be if you were running at ~$400k in revenue per staff member??? That IP alone is worth the price, let alone the book of business, future commissions, and cross sale empire to secure.

NDA is required to secure comprehensive Confidential Information Memorandum (CIM) crafted by ProNova Partners.

Financial

  • Asking Price: N/A
  • Cash Flow: $1,894,121
  • Gross Revenue: $2,492,363
  • EBITDA: N/A
  • FF&E: $20,000
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 1994

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:7
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Multi-office acquisition target. Easy leases to absorb or get out of. Clients have been trained to be serviced and supported remotely, 99% direct bill, very few clients visit the subject locations to make payments. Ideal roll up or take over as-is per Buyer preference.

Is Support & Training Included:

All employees will stay. Seller will stay for as long as needed per Buyer request and subject to mutual negotiation of a satisfactory consulting/employment arrangement.

Purpose For Selling:

Liquidity event for Seller.

Pros and Cons:

Insurance is a very competitive industry, but this Agency has weathered the various upturns and downturns due to its impressive size and retention metrics.

Opportunities and Growth:

A cross selling paradise. Round this out for another million or two in revenue upside if the right Buyer is strong in other lines.

Additional Info

The company was established in 1994, making the business 28 years old.

Why is the Current Owner Selling The Business?

There are all kinds of reasons people choose to sell businesses. However, the true factor vs the one they say to you might be 2 completely different things. For instance, they may claim "I have way too many other responsibilities" or "I am retiring". For lots of sellers, these factors are valid. But, for some, these may simply be excuses to try to hide the reality of changing demographics, increased competitors, current reduction in profits, or an array of other factors. This is why it is really important that you not depend totally on a vendor's word, however instead, utilize the seller's response combined with your total due diligence. This will repaint a more practical image of the business's existing situation.

Existing Debts and Future Obligations

If the current business is in debt, which many businesses are, then you will need to consider this when valuating/preparing your offer. Numerous operating businesses take out loans in order to cover points such as stock, payroll, accounts payable, and so on. Remember that in some cases this can imply that earnings margins are too tight. Many organisations fall under a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may also be future obligations to think about. There might be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with suppliers that need to be fulfilled or might cause charges if canceled early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do businesses in the area draw in brand-new clients? Most times, companies have repeat clients, which form the core of their day-to-day revenues. Particular variables such as new competition growing up around the area, roadway construction, and personnel turnover can impact repeat consumers as well as negatively affect future incomes. One crucial thing to take into consideration is the location of the business. Is it in a highly trafficked shopping mall, or is it hidden from the highway? Undoubtedly, the more individuals that see the business regularly, the higher the possibility to develop a returning customer base. A last thought is the general area demographics. Is the business situated in a densely populated city, or is it located on the outskirts of town? How might the neighborhood mean house earnings effect future earnings potential?