America's Benefit Specialist October 2023

WHAT TO ASK IF YOU ARE CONSIDERING BUYING ANOTHER AGENT’S BUSINESS

By Dan Mangus Vice President of Growth and Development Senior Marketing Specialists Columbia, Missouri dan.mangus@smsteam.net

In today’s competitive insurance market, looking for growth opportunities requires skill and creativity. One method be ing increasingly used is acquisition growth. It allows agency owners to quickly add large amounts of clients to their agency in short order. Acquiring blocks of policies can result in compound growth as your base of relationships widens. If you want to

grow your practice by acquisition, there are questions you would do well to ask yourself and the prospective seller. Let’s begin by discussing some things you will need to ask yourself. All agencies, even those primarily dependent on re ferral business, have direct or indirect client-acquisition costs. You will benefit from understanding your current acquisition costs and the lifetime value of your average client. These

ONCE YOU HAVE DETERMINED HOW MUCH YOU CAN PAY TO ATTAIN A NEW CLIENT AND REMAIN PROFITABLE BASED ON THEIR POTENTIAL LIFETIME VALUE, YOU CAN SET THRESHOLDS FOR WHAT YOU ARE WILLING TO PAY FOR EACH NEW CLIENT RELATIONSHIP.

14 ABS | benefitspecialistmagazine.com