- Step 1 – Develop sales documentation. This includes a full Offering Memorandum and Profile Letter.
- Step 2 – Create a comprehensive marketing list. The actual size of this will vary dramatically, but it will typically include a full set of strategic players having synergies with your company as well as equity firms with holdings in your niche.
- Step 3 – Compile and review all offers. Each organization that indicates interest is sent a Confidentiality Agreement (CA), which protects you from having any proprietary information about your company become public knowledge.
- Step 4 – Negotiate with specific buyers. Negotiating a business deal isn't like negotiating for a car. Agency buyers will oftentimes offer letters of intents (LOI) vs an actual offer. A lot of offers will include earnouts based on retention, payouts depending on time seller stays on board, lease agreements with options to purchase, etc... All of these items are things to consider. That is why it is extremely important to have a professional Intermediary that understands the process and can help sort through the different types of offers.
- Step 5 – Letter of intent and due diligence. This is where the limited auction is narrowed to one buyer, and the most intense piece of the process begins, due diligence. FYI, most deals fall out at least once at this stage because buyers delve deeply into the operations of your company.
- Step 6 – The deal closes. This sounds easier than it is. When you finally get to this point, expect to encounter a full range of emotions, and be ready to handle them all.
Here are some of the steps we go through when listing an insurance agency for sale: