Buy a book?

[NCAgent828]

Lole I’ve said before I’m new to the agency game and figuring a lot out the easy way and hard way.

I’m interested in buying a book of business and currently trying to find one that might fit me and my agency.

What are the risks involved with this? It seems like a great thing but there’s got to be something more to it.

Retention?
Non compete?
Bad book?

 

[NCAgent828]

If there is a thread I missed related to this please point me in that direction!

 

[BIG one]

Growing Rich my Randall Baskin is a good book, buy that one. Have you read Raising myself from failure to success by Frank Bettger, another classic in my opinion. Any one of these books would be good business books, it really depends on what your looking for? As far as your question goes I've never heard of either of the first two books you mentioned Retention and Non compete and I agree there are bad books out here.

 

[NCAgent828]

What I mean is buying a book of business. Not a book to read. Risks involved. Is it too early to immediately buy a book of business?

 

[TeePee]

I worked for a captive in NC for 22 years and finally got tired of seeing the 3 Million dollar BOB get screwed every renewal so I switched to IA 7 weeks ago and it was the best move I ever made. When buying a BOB, you will lose at least 10% immediately because most people stay solely for the agent.

 

[NCAgent828]

That makes since. I thought there would be some sort of retention issues. Do most deals include 2nd and 3rd year pay out percentages based on retention of the book?

 

[NCAgent828]

In your experience, where is the best place to find out for sale? Agentequity has seemed like a good one but are there any other resources you recommend?

 

[TeePee]

I had no part in the ownership nor had no part of the business numbers side, so I have no clue what any payouts were. I am no dummy because I knew the business model was sucking the agency dry of customers so I just left.

I haven't told anyone, but plenty of former insureds have sought me out, just because I know their stories and what they need for insurance. I am not taking that business but a lot of them will come to me because they know me, not the agency owner. They are loyal to me. They are begging me to quote them but I will when the time is right. There is nothing the captive agent can do to keep this business.

 

[indienoise]

In your experience, where is the best place to find out for sale? Agentequity has seemed like a good one but are there any other resources you recommend?

The age old question. The "good" ones often never see a for sale listing. Takes lots of patience and you have to market yourself. Making acquisitions can be a very full time endeavor.