Recently, one of my OAA members came to see me for advice on buying an insurance agency. His first question was, “Where can I find one for sale?”
His second question was whether he could hire someone to find a deal for him. In larger agency acquisitions this is very common, but in agencies that will sell for under $1 million dollars, it isn’t, because there aren’t enough “deal fees” to entice merger and acquisition people. So, you’re going to have to do it the hard way.
Get the Word Out
When you’re ready to start looking for an agency to buy, my best advice is to tell everyone you know what you’re looking for. Be specific. Let people know the size, product mix and location you’re comfortable with.
Spread the word. Tell every agent friend you have, go to agent meetings; tell your banker and your CPA. Tell all your insurance company contacts. Tell your Sunday School class! Put the word out and do it over and over. This is probably your best opportunity.
Write a Personal Letter to Agency Owners
Consider a direct mail campaign and write letters to agency owners in the area to let them know that you’re looking. Don’t write the “plain vanilla” letter everyone else sends out. Those will just go in the round file unless you get lucky.
When you put your mailing list together, cross reference as much information as you can. Try to find the agency’s financial size, carriers represented, age, web presence, specialization, etc. Do a Linkedin search on the agency.
For goodness sakes find out who the actual owner is! Then, instead of writing a form letter, write a personal letter to that agency owner. Sprinkle in some things about the agency that impressed you. Flattery helps. If you and your letter stand out you’ll have a better chance for a return call.
And Follow Up
Don’t just count on a letter. Follow it up with a phone call. Find out if the owner is interested in selling now or the near term. Everyone is interested eventually. Try to meet and get acquainted, and stay in touch if a deal isn’t imminent. This strategy will yield a lot of potential prospects over just a few years if you stay with it.
Advertising on websites like agencyequity.com is another idea. You can also consider Facebook or LinkedIn ads as a way to find prospects.
Really, this isn’t any different than marketing your agency. More than likely you won’t have a lot of prospects initially, but if you keep at it you will.