Carey Wallace, Agency Focus

Over the past several years I have worked with many agency owners across the country helping them understand the value of their agencies. It is some of the most rewarding work I have ever done, and I have learned a lot about agencies and agency owners as a result of this work. There is a common perception among agency owners in our industry that you only need to know the value of your agency when you are getting ready to sell or retire – that is 100% false. Through hundreds of conversations with agents, I have put together some of the most common reasons why so many agency owners hesitate to start the process of knowing their agency’s value.


So often I hear “I’ve been meaning to do this for years, but I could never find the time.” Time is the number one reason given why agency owners do not know the value of their agency. I know agency owners are busy and wearing many different hats. Their focus is on taking great care of their clients, building a great team, and running their agency. Far too often, taking care of the tasks that are time-sensitive leaves little time left over to get to the things that do not HAVE to be done. The thought of gathering information needed to complete a valuation report for your agency may seem like a daunting task given the system limitations or flexibility. Putting off knowing the value of your agency may be one of the most costly decisions an agency owner can make because you lose the gift of time. Investing the time to know your agency’s value is critical to you, as it will provide you with insights and opportunities to reallocate resources, invest in growth and ultimately increase your agency’s value over time. Without that insight, you could be missing opportunities, the long-term impact of which can be significant to you, and your agency. I recognize time is valuable and work hard to streamline the process and information needed to provide you with the insights you need to know your agency’s value and plan for your future.

Assumed Agency Value

Many times, agency owners share that they already know the value of their agency – “It’s one and a half times revenue, right?” or they share what they know about the last few agencies that they know who sold. All agencies are not created equal. When you use revenue as the only factor in valuing your agency you are forgetting that your agency may be growing faster, have less risk, be better positioned for future growth, have stronger carrier partners, have superior processes, systems, and marketing in place that are driving better performance and profitability. There are many factors to consider in valuing your agency and using only revenue or other examples of transactions is not a good reflection of your situation, timing, or specific strengths or weaknesses. In many cases, your agency is your largest asset, and it is worth knowing the true value, not just assuming you know. 


The last factor that prevents agency owners from taking the step to know their value is best described as fear. Fear of the unknown is difficult and applies to a few areas. First, no agency owner wants to learn that their agency’s value is not what they think it is or assumed it would be. In addition, many are afraid that they will not be able to transition their agency to the next generation. That may be because it has grown to a size that makes that transition difficult financially for the next generation. The most common fear is really about the owner. The thought of starting the process by getting a fair market valuation feels to many agency owners like the beginning of the end of their career. So many agents have worked their entire lives in their agency and the thought of retiring is hard to imagine. They cannot imagine what they will do, and so it becomes scary to even start the process. I can’t tell you how many times I have heard, “I’m not ready to retire.” or “I’m not sure what I would do in retirement.” This feeling is completely understandable for many the agency is a reflection of their life’s work, but putting off knowing the value of their agency may be the worst thing they could do for themselves and their agency.

Take the Time

What many agency owners do not realize is that knowing the value of your agency is important long before you are ready to retire. Each agency is unique so assuming the value is a dangerous practice that could be very costly, and finally knowing the value gives you the power to change it. In this process agency, owners learn far more than a number. They learn about important benchmarks that can impact how they think about allocating their resources, the risk factors inside their agency and what they can do to mitigate them, and most importantly the actions that they can take to increase their value. Going through this process gives you the insight you need to make informed decisions about running your agency. Waiting until you are ready to retire can be a very costly decision as there will be no time to utilize all that you learned to maximize the value of your agency.

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