Agency Buyer, Seller Goals Often Differ

While independent agents who put their firms up for sale often want simply to maximize the profit from years of hard work in building a book of business, a buyers demands often center more on strategic goals–usually the growth potential an acquisition provides in terms of geography or product line, industry observers say.

Buyers can have a number of strategic objectives, pointed out Steven Reichman, executive vice president with NIA Group in Paramus, N.J., who is president of the Professional Insurance Agents of New Jersey. His agency, which has 15 offices in four states, buys other agencies with the aim of strategic growth.

“We are always trying to grow the business,” said Mr. Reichman. “Instead of using cold calls to grow the business, we buy [other agencies] because there is a relationship in place and it seems to have worked better for us over the years.”

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