I have ways . . .
Non compete when buying book
- Thread starter wornout
- Start date
I have ways . . .
- Thread starter
- #12
wornout
Expert
- 70
Actually, his language is stating that I cannot work for any competitor in thirty miles and not solicit for 3 years. I would be okay if it just said I would not open another agency but that is not what he is requesting. He is worried that clients will seek me out after I leave. I have no intention of poaching the book I sell - I am looking forward to something new. He is also asking my husband to sign the non compete as well. Next he probably is going to ask my kids!
I think I am going to move on. It is a strong offer, but the non compete is ridiculous. Maybe I will try and bring my book to another agency and "partner" up.
- 5,463
In that case, so would I.
Your book will be far more valuable with you as part of it. Every once in awhile I get a phone call that's a bit comical. My client will ask about a bill they got, and why they are getting it. I laugh and tell them that's the insurance company I wrote them with. Then, they asked me if they should pay it. I laugh, and say yes. They aren't buying Liberty Mutual, or AmTrust, or Nationwide. They bought me. Without me, my book holds a fraction of its value.
- 10,708
Not solicit within that 30 mile range? If so, seems reasonable.
- 10,708
If its something new, why is the non-compete an issue?
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- #16
wornout
Expert
- 70
Mark, I was finding the opposite. Agencies wanting my book and me lowballed the book. Then wanted to pay me over 3 years - that is same as being captive and a non compete. My book isn't that big for that kind of limit and payout - particularly with the potential capital gains changes.
I agree, my clients do love me and I want to find the right agency for them. It is mostly personal lines and people shop, so I think buyers don't value personal lines. Sadly, I just want to move on and need to start remarketing the book.
Thanks for the feedback!
I agree, my clients do love me and I want to find the right agency for them. It is mostly personal lines and people shop, so I think buyers don't value personal lines. Sadly, I just want to move on and need to start remarketing the book.
Thanks for the feedback!
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- #17
wornout
Expert
- 70
The non-compete is an issue for me. My employment options are primarily with other agencies. He (and the bank) does not want me to work for another agency OR start up a new agency. I have 2 offers now - both at other agencies near my home but I can't accept if I sign this noncompete.
A non-solicit is fine - I will not reach out to clients. He is worried that if I go to another agency clients will find me. It could happen, clients do shop and they may end up where I work - but not by me seeking them out. Clients can and will leave regardless where I work - even if I decide to sell ice cream at the beach - clients will leave! It part of the business risk of buying book vs building one.
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- 5,463
Perhaps I am being pedantic, but I said your book would be more valuable with you as a part of it. I didn't say people would pay more for it in a buyout. Similar, but different.
Yes - that makes sense that personal lines holds less value as it is higher turnover, and I believe it is lower commission as well. I got out of the personal lines game years ago, and am only commercial now.
Since you bring it up, do you mind if I ask, what size is your book?
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- #19
wornout
Expert
- 70
The revenues are $180K a year -
Commission or premium?
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