Many insurance agents dream of the day when they can sit back,kick up their feet, relax and enjoy the rewards of their hard work.They may be thinking they'll just slow down and work less, or theymay think they want to retire completely.

Either way, they typically have only one of two options in mindfor their business when that day comes:

  • Create a business that runs on its own and provides its ownerwith consistent cash flow — one with very little dependence onowners being present to accomplish growth.

  • Sell the business to an outside investor for a nice valuation,based on a multiple of the practice's revenue or earnings.

Whether it's the automated cash flow machine you want or asell-out, both of these strategies would be a great option for asuccessful advisor to have in order to live the retirement years they'vealways dreamed of. But 9 times out of 10, these business peopleeither end up with a practice that is much more dependent on themthan they expected, forcing them to work and not retire at all. Orthe valuation they get on their business and what they thought itwould be worth, are miles apart.

I spoke with a successful financial advisor recently — let'scall him “Mike” — who was at this point in his life. He wasreaching retirement age and was very proud of the business he hadbuilt over the last 30 years. He knew all of the blood, sweat andtears it took to build his business. He was sure the business would be very attractiveto buyers, and expected to get a high valuation for it.Besides, he had heard, the bigger the business, the higher themultiple he would get. Unfortunately, outside investors had anotheropinion on what his company was worth.

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