How to Answer that Burning Question: When is the Right Time to Transition Your Agency?

January 28, 2022

This is the second in a series of ten articles that will help agency owners determine if now is the right time to transition their agency. By taking a step back from running the agency to consider what the future holds, agency owners might better understand their future options.

One thing to consider agency performance: annual growth, retention, and profitability.

Annual Growth

Is your agency seeing robust organic growth or growth through acquisition? Or, are you having trouble driving growth due to lack of energy, non-producing producers, or an overly competitive marketplace. You might ask yourself if you want to stay on to drive growth, or just ride out a few more years on renewal business. If you are planning to remain, you should take time to review or create a growth strategy, knowing your agency will be more valuable when you eventually sell, if you can show positive year-over-year growth. Think about setting growth goals and setting up mechanisms that measure activities and performance metrics that lead to sustained growth.


Is your agency retaining business at a high rate? Best Practices agencies retain business at a rate of 90% or greater. The notion that keeping a customer is easier than finding a new one should drive your retention focus. Does your service and support staff understand the importance of retention and are they equipped with the tools and training to drive it higher? Does your agency offer a differentiated customer service experience that will get your clients to give referrals to you? Focusing on high retention, with or without high annual growth, will lengthen the runway for the agency and give the owner more time to plan their eventual exit.


There are several things to consider regarding agency profitability. Is your agency profitable? Are you running your agency like a business of like a lifestyle? Can you cover your expenses without your contingency bonuses? Agency buyers look for a pro forma profitability of between 25-30%. If you are below that target, what changes can you make in the years before your exit to demonstrate that the agency can operate with these margins? By tightening your belt now and driving profitability, you could realize a more lucrative exit when the time comes.
By taking some time and considering these agency performance factors, you may get some clarity as to whether you have the will and the plans and procedures in place to drive agency growth, retention, and profitability.


This is the first in a series of weekly articles that will help agency owners determine if now is the right time to transition their agency.  As most agency owners are mired in the day-to-day operations of their agency, or busy prospecting or writing new business, many simply don’t have time to sit back and look at the big picture, and to plan their eventual exit.

January 10, 2022

One thing to consider is personal factors: health, focus, energy, age, and optimism.


Perhaps you are in good health and want to continue doing the job you love, but you might consider exiting earlier to enable you time to smell the roses. Have you thought about what you want to do in retirement?  Do you want to travel, or spend time with the grandkids or on a favorite hobby?

Focus & Energy

To lead and manage an agency requires focus and energy, every day.  Do you still enjoy the daily grind?  Or, are you retired in place?  Spend some time thinking about what makes you want to get up in the morning and that could help inform your decision to either keep working, or begin planning a transition.


How old are you and when do you plan to retire?  We meet many agency principals who are past retirement age and have no formal plan to perpetuate internally or to sell.  The sooner you plan your transition, and begin to enact your plan, you will set in place the timing, people, and resources necessary to exit the business.


For years, we have heard of the impending doom of the independent agency channel.  But, the agency plant continues to survive and thrive, despite increased competition and commoditization.  Couple this with the speed of technology innovation, and it can seem overwhelming.  Do you want to be part of the brave new world, embracing the technology necessary to thrive?

By taking some time and considering these personal factors you may get some insight into when you will transition your business, and why.  Determining what drives your personal satisfaction away from the office can help you make the right call.

If you are considering transitioning your agency and are looking for help, contact Jodie Shaw at and we’ll make sure you have everything you need to make the best decision for you and your agency.

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