Agency Focus

Buying another agency might be one of the fastest ways to grow, but it can also be one of the easiest ways to get yourself into trouble. Too often, we see agency owners jump in before they’re ready. They get excited about the opportunity and forget that buying a business is not the same as building one.

In the first session of our Buying an Agency webinar series, we talked about the things that smart buyers think through before they make an offer. If you missed it, here are some of the biggest takeaways that came out of the conversation.

Start by knowing your agency inside and out

Before you start reviewing someone else’s financials, you need to make sure yours are in order. That means more than just being profitable. You need clean, organized data that tells the story of your business.

At a minimum, you should know:

Your EBITDA and profit margin
How your revenue breaks down by line of business
Your retention and loss ratios
Where you land compared to industry benchmarks

If you don’t get your financials in order first, it will be difficult to identify expenses that can be eliminated, reduced or changed and you will miss out on the opportunity to maximize the combined profitability of the deal. Not knowing your number could cause you to lose a strong deal. Preparation puts you in control.

Be clear about why you’re buying

Not every deal that comes across your desk is a good one. Sometimes we get excited because there’s an opportunity in front of us, but we forget to ask whether it actually fits the direction we’re trying to go.

Before you look at anything, ask yourself:

Are you looking to grow geographically?
Do you want to acquire talent or leadership?
Are you trying to build a niche you don’t currently serve?
Is this about revenue, relationships, or operational scale?

If you don’t know what you’re trying to accomplish, you’re more likely to chase something that looks good on paper but causes friction down the road.

Build your buyer team early

I cannot stress this enough. Do not try to do this on your own. Surround yourself with the right people, and get them involved early.

Here’s who you need:

An advisor or consultant who understands insurance M&A
A CPA who knows this industry and has experience with deal structure and tax implications
Legal counsel who has handled agency transactions
Someone internal who can lead integration and assess operational readiness

If you try to take this on without a team, you’ll miss things. You’ll also slow down the process and potentially make promises you can’t deliver on.

Fit matters more than financials

You are not just buying a book of business. You’re buying relationships, workflows, expectations, and team dynamics. If the cultural or operational fit is off, the numbers won’t matter.

Ask yourself:

Does this agency operate in a similar way?
Are their producers paid like yours?
Do they use technology in a way that aligns with how your team works?
Will their staff be able to integrate with yours?
Do their clients look like your clients?

The most successful acquisitions I’ve seen are the ones where the fit made integration easier and culture was aligned from day one.

Know what to ask for and when

This came up a lot during the session. There’s a rhythm to how you gather information. Asking for everything up front is overwhelming. Asking too little means you’re flying blind.

Here’s a breakdown of what to ask for at each stage: