In this age of consolidation and acquisition, many insurance businesses are keeping their options open for a future partnership or sale. If you are a business owner interested in these options, do you know whether your business operations are truly sophisticated enough to be appealing to a potential partner or buyer? If not, it may be time to step up your game. With many successful, growing insurance businesses in the marketplace, it’s important to understand what the buyers are looking for, as well as how you can make your company stand out among the crowd of sellers.

1. Your Financial Health:

Insurance businesses with solid, organized financial records will look more appealing to potential partners or acquiring companies. Here are some things to gather or have in place to improve your chances of selling and make the transition smoother:

  • Compare financials with industry norms: When analyzing your budget, profitability and other financial numbers, research and compare your figures with those in the industry. Look for areas that seem out of the ordinary for a company of your size and adjust accordingly. You can track and compare common expenses such as rent, acquisition costs, overhead and more to make sure you are in line with industry averages.
  • Invest strategically: When making working capital investments for the growth of your business, keep them in line with your goals and mission. For instance, prioritize spending and investing in things such as marketing, new technologies and people that will result in a greater return for your business.
  • Keep your operations streamlined: Reduce manual procedures and invest in new technologies to automate your sales and processes. This includes customer relationship management (CRM), proposals and financial documentation. Make sure all of your employees are following the same processes, and document these processes in order to create a more streamlined operation and reduce overall costs.

2. Your People:

One of the greatest assets in your insurance business is your human capital, otherwise known as your employees. To position yourself for an acquisition, make a note of the value that your people bring to the equation. Some ways that you can tout your team as an asset include:

  • Experience and Longevity: Do you have owners, producers or team members with decades of experience in the insurance industry? Have any staff members stayed with the company for many years? Highlight their extensive knowledge on your website’s company overview page and in your promotional materials.
  • Specialized Training: Tell the story of how your leaders or support team have undergone extensive training or complete regular continuing education to make your business more appealing to a buyer or partner.
  • Company Culture: Keep in mind that an acquired business will need to merge staff and leadership with the new company. Clearly define, communicate and execute a consistent and unique company culture (your values, work ethic, techniques and goals) so that they mesh well with a buyer’s ideals. This includes the positive traits of the owner, producers and employees, along with the management style of the business.

3. Your Marketing Plan:

The final step in making your business more attractive includes having a written strategy for who you are, who you reach, how you retain and how you find your clients. Think about and answer the following questions:

  1. How do you nurture your existing clients to ensure they continue working with you?
  2. How do you currently communicate your business to prospective customers?
  3. Have you clearly identified and fleshed out who your ideal clients is and how you can find more of them?
  4. Do you have a marketing plan for how to reach your target audience?
  5. Does your business have a professional website that can be easily found via search methods?
  6. Are you currently tracking your return (ROI) on your marketing investments?

Companies who have a clear picture of who they are, who they are targeting, and how they are reaching their current client base will automatically become more appealing to a potential buyer or partner.

The Effort Can Pay Off:

The bottom line is that your business must become the best version it can be to make your company more appealing to a buyer or partner. Look to other successful insurance businesses as examples to guide your analysis and strategy. Be sure to align your internal staff and hiring process to fit your new growth and business goals. Continue to organize and streamline your operations, processes and marketing approach for maximum effectiveness and future growth potential. Finally, ensure that your vision, mission and culture are clearly defined and ready to integrate with another potential company. With a plan in place to make your company more marketable from a financial and personnel standpoint, you’ll be in a better position to make that happen when the time is right.

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