1. Define a target market of buyers that can realize the most value for the agency. This could include local buyers, strategic buyers, or financial buyers.
2. Develop and execute a marketing strategy to attract the targeted buyers. The first step is to create a blind profile of the agency that will show three to five years of earnings, mix of business, and general location (if necessary this could be as broad as state or region.)
3. Prepare a Confidential Business Review that will only be shared with these prospective buyers after receiving a signed non-discloser agreement. This will provide all of the details a buyer will need in order to determine if they would like to pursue this agency opportunity.
4. Conduct Buyer/Seller meetings only with buyers that have shown they are serious and have access to the required funds. This is where the two parties will get to know each other and determine if they could see themselves working together. Buying an agency isn’t like buying a house or car. The buyer and seller will work together through a specified time period in order to ensure a smooth transition.
5. Negotiate the offers to maximize price while also making sure all parts of the offer work for both parties. The highest offer doesn’t always mean the best deal for the seller. We have seen offers above the asking price, but with longer earnouts, less money down, more contingencies than normal, and longer employment contracts.
6. Close the deal, which is the most important part of the process.