Selling our Final Expense Agency and Lead Company

[brkrsrevolution]

10 Year old final expense agency and lead company, owner looking to retire.

Current gross monthly profit approximately 25,000.

Could run company with 1-2 employees. We have the two employees already trained or you can use your own team.

Looking for $650,000 to secure retirement.

 

[Life Hawk]

Just a financial suggestion here. Keep the $25K a month and work the business down.

The numbers don't add up here for what you want to sell for. Have you had someone run the numbers for you?

 

[DayTimer]

Current gross monthly profit approximately 25,000.

I don't understand this valuation at all. But I'm a lone wolf and not an agency. But a solid single producer can work $1600 worth of leads and write over $25k/month. I'm sure I'm missing something. What is it? Are you sitting at home in your underwear earning this $25K? Or are you working for it. If you have agents earning it for you, what's to say that they aren't gone the day after you sell the agency?

 

[goillini52]

Just a financial suggestion here. Keep the $25K a month and work the business down.

The numbers don't add up here for what you want to sell for. Have you had someone run the numbers for you?

"Current gross monthly profit approximately 25,000."

Maybe that's why the #'s don't add up. Approximately might be $15,000 a month.

 

[rousemark]

The monthly profit would include current production. The question for the valuation would be how much renewal income is being collected. .

 

[DayTimer]

The monthly profit would include current production. The question for the valuation would be how much renewal income is being collected. .

That's what I mean when I say something is missing. Hey, if any of y'all want to buy my "agency" you can have it for just $100k I'll even sign a non-compete to keep me away from my current customers for 5 years and out of my two main counties for 2 years. Any takers?

 

[HoosierLife]

We had to ask this question when Brandon and I were setting up our Operating Agreement. We have to have a valuation in there. Depending on the perceived value of your company, a life agency could get 4-6x their NET annual profit. At least that's how we were told to value it.

Now @brkrsrevolution mentioned Gross monthly profit. What's your net annual profit after expenses, paying yourself etc for 2018 and so far for 2019?

I might not be your buyer, but I know some people that would be interested.

 

[Todd King]

We had to ask this question when Brandon and I were setting up our Operating Agreement. We have to have a valuation in there. Depending on the perceived value of your company, a life agency could get 4-6x their NET annual profit. At least that's how we were told to value it.

Now @brkrsrevolution mentioned Gross monthly profit. What's your net annual profit after expenses, paying yourself etc for 2018 and so far for 2019?

I might not be your buyer, but I know some people that would be interested.

No, life would only value out at 1 to 1.5 times. Not sure of any insurance products that would be valued at 4-6 times. That's way too much.

 

[HoosierLife]

No, life would only value out at 1 to 1.5 times. Not sure of any insurance products that would be valued at 4-6 times. That's way too much.

Well I've heard 1-1.5x annual premium or 4-6x net profit. I thought it was too high too. But I heard that from a number of sources, specifically from principals that had sold their agencies in the past.

 

[Todd King]

I've actually heard several things over the years, so I'm not sure what is correct. I know we working with a lender right now and that is what they told us.