You've put years of your life into building your agency. Have you decided who it will go to when you are ready to retire? A well-crafted exit strategy can ensure that your business lands in capable hands. Many small agencies are passed down to family members. In other cases, they are sold to third-parties. There are also many agency owners who would prefer to sell their agency to younger agents in your firm. However, they often do not have the capital to buy the agency.
Experts at Insurance Journal recommend an alternative where the agency is divided into shares. Shareholders are awarded shares based on the business that they bring in. Over time, it allows younger agents to build equity in the business and makes it possible for the original owners to retire and eventually sell their shares back. This arrangement can ensure that the business goes to those who have put in the work to build it. It also gives clients a sense of continuity, with agents who are familiar with their needs continuing to service their insurance policies.
The American Agents Alliance is here to offer support at every stage of your independent agency's lifecycle. If you have questions about a perpetuation plan for your agency, call us today.