Business Planning in Action

OIA launched a business planning, valuation and perpetuation practice in early 2018 to help agents transition their businesses – either internally or externally.  Many of our member agencies are owned and managed by owners approaching retirement age.  Many do not have a plan on how to exit their agencies and preserve their legacies. Since that time, we have been able to assist over 100 agencies gain an understanding regarding their fair market value, use that knowledge to grow their value, create a perpetuation plan, and transition or sell their agency.

OIA recognized that many agencies were selling and transitioning their agencies without knowing their value and we wanted to provide as many agencies as possible the ability to obtain this critical information as they planned for the future of their agency. We knew that by providing this at a reasonable cost we could help provide agents with the information they need to weigh all of their options.  We know from talking to our members that the mere thought of transitioning their agency can  sometimes be both overwhelming and difficult and many agency owners are not sure where to start.  There is no question that there was a need for this service that was not being met in the market by traditional, national consulting firms, and we had a strong desire to help our agents every step in the process.  Because OIA understands the space and the needs of our members, we began developing products and services that are first and foremost affordable to our clients, while delivering the technical expertise they needed.

Shortly after launching our perpetuation consulting practice, OIA was engaged by an agency owner who was planning to transition his business to his key employee and top producer.  He knew that he wanted to make this transition but didn’t know how to do it. We spent time talking with the agency owner in order to define his priorities and goals, and to understand his timeline and expectations for ongoing involvement in the agency.  The most critical part of the process is to help define these key factors that will support the many decisions that an agency owner will make as they move through this process. Additionally, he was still actively producing business and managing the day-to-day operation of the agency, so it was hard to come up with the necessary time.  Enter OIA’s consulting team.

We met with the agency owner and proposed serving as the quarterback of his business transition. Our proposal included a kick-off meeting with key stakeholders, quarterly in-person meetings, and monthly touch-base calls to ensure that progress towards the goal was achieved.


Although the agency owner had an idea of what his agency might be worth, he asked OIA to complete an agency valuation.  The valuation process examines the financial health of the agency and assesses any risk of the agency and its book of business.  The valuation range serves as a conversation starter on the sale price.  In the current M&A market, agencies can often fetch a higher multiple and higher value, just as when selling internally to family members or key employees, an agency owner might sell at a discount to ensure the viability of the agency and the legacy of the outgoing owner.

Financial Modelling

Based on the valuation, our next step was to perform financial modelling that would examine the ability of the agency to fund the transition out of agency cash flow.  We developed an interactive model which enables agency principals to do scenario planning by adjusting various assumptions such as sale price, interest rate, projected growth, and incorporated forecasting future agency expenditures. This also allows all parties to see the impact of many different factors to consider in this process and facilitates some detailed conversations about resources, expectations, and transition plans.  Many times, the conversations that are required to arrive at the appropriate price, timing, and transition plan can be difficult for current agency owners and future agencies to navigate.  By including an outside party to ask the questions and the ability to provide a visual of the impact of each of the critical decisions in the process, we are able to help make these conversations much more productive and informed and allows the process to continue to progress.

Trusted Advisor

Throughout the process, OIA served as a trusted advisor to the agency owner.  We were able to use the model to provide in-depth analysis to facilitate discussions between both parties.  We were also able to discuss best practices, provide things for them to consider as they structured the deal including if the owner is including the building in the deal, and what type of earn-out structure to include. We also explored compensation before, during, and after the transition, and the future hires in the agency. All of these factors and many more were included in the modeling so both the current owner and future owner could evaluate and weigh the impact of each decision in this process. Lastly, we helped advise the principal on how to structure the terms of the employment contract, as the new owner asked him to stay on for a few years to help transition key accounts while retaining the business.


After the current and future owners agreed on the terms and timing of the deal, OIA was able to introduce them to banking resources.  Our resources are familiar with lending to insurance agencies and are able to structure loans that make the transition feasible.  OIA was also able to refer the stakeholders to tax advisors and legal experts who were able to answer more complex questions, where we do not have in-house expertise.


With OIA’s assistance, the owner was able to arrive at an agreement that positioned the new owner and agency for success and give the current owner a fair price and reasonable transition plan for his agency. The agreement ultimately worked well for both parties.  OIA was able to keep both parties on track to meet established goals and milestones.  The result is the perpetuation of a great main street insurance agency to the next owner, while ensuring that the deal was feasible for both parties and the agency was setup for success for many years to come. These transitions are unique to the circumstances in each agency, and our team is honored to have the opportunity to work with agencies to determine the structure, timing, and details that work best for their specific situation.


If you would like to learn more about the perpetuation consulting services that are available at OIA, please visit our website at

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