business operations
business operations

If you are at the point when you have primed your insurance agency for sale and have found a potential buyer, you’ll need to be prepared for the next steps to ensure a smooth and effective transition.

You will need to set an extraordinary amount of time aside for discussions and the due diligence process, as well as make sure everything is in place for a smooth and successful transition to the new owners if you strike a deal.

You’ve worked hard over the years to build your business, so you want to go through the sale’s operational transition process carefully and methodically.

The following are some key issues to consider after you reach a tentative agreement to sell and due diligence gets underway:


Your time

One of the biggest mistakes agency owners make is underestimating the amount of time that is required to manage the acquisition process. It can be a distraction to managing the operations of your agency, which still has business to conduct.

You need to be realistic about the time and effort you will have to devote to managing the sale and transition process. It will be more than you expect.

Most agency sales take between four and six months from start to finish. The longer the time frame, the more time you may be able to devote to ongoing operations. However, an enthusiastic buyer may be eager to perform due diligence and complete the purchase, which means a faster transition and more work on your part in a shorter amount of time.

Plan for interruptions: During due diligence you may receive requests for data, accounting documents and other materials that will require you to divert your focus to retrieve that information. In some cases, it may not be readily available, which will take even more your time and resources to produce. You may have to scramble to fulfill some of these requests.

You’ll also have to set aside time for regular meetings with the acquirers, as well as any outside consultants, accountants, management or partners you have involved in managing the sale of your agency.

And finally, after due diligence and you strike a deal, the planning process for your exit and the transition to the new owners taking over will demand even more of your time.


Your transition team

You may be doing the negotiations with some of your key executives, but once you are certain you have a deal, you’ll need input from key employees for the steps you need to take prior to and after the sale to ensure a smooth transition.

The best way to make that happen is to involve key personnel from each department who can be tapped for input when you design your transition plan.

You should choose personnel in different departments who are trusted and who are likely to manage the transition in their area of responsibility. There will be overlap with other parts of the operation (such as sales and customer service), so you want to ensure cross-department cooperation between the people you choose.


Your plan

A good transition plan will outline the priorities and strategies for transitioning the business to a new owner. It will cover the essential steps required for a successful migration to the new owners, including:

  • Announcing the acquisition to your employees alongside with the new owners. If you show a united front and project confidence in the future of the operations, it will help your staff digest the news positively.
  • Making time to meet with key staff individually to answer any questions they may have about training and the company’s future. Take the time to listen to how your employees are feeling at this stage and address any concerns they may have. It’s important to be frank with them about the incoming owner’s plans in terms of employee retention and direction.
  • Planning to transfer knowledge and skills to the new owners. This will require coordination between their incoming managers, supervisors and key personnel and your current crew in each department. Plan what you will train them on and which of your personnel you want involved in the training. The goal is to prepare the incoming owners to step into the new job with the knowledge they’ll need.


If your agency uses a different agency management system than the acquiring brokerage, you’ll need to plan with the new owners for whether they plan to keep it in place in your office or transition to the system they use.

  • Making a list of all key contacts to introduce to the new owners. This includes your main vendors and important clients. In some cases, you may be using the same vendors and the buying agency may or may not continue using all of those you currently do business with.
  • Reviewing details of contracts significant to the agency. This is so that the importance of those details does not get lost in the ownership transition.
Spread the love