Purchase a book of business?

[Evan]

if you can get a medicare book for 1.5x, then absolutely do it. its a steal.

I believe the going rate is more in the 2.5 - 3.5x range, depending on the average age and mix.

Ok.. Thank you..

 

[axeman462]

I buy books for 1 year of income.

When you write your book on negotiation tactics, let me know. I'll be first in line

 

[Tom in RI]

What is appropriate will depend on so many circumstances. I bought a book last year for 1.5 times revenue but, the guy who was selling was basically no longer able to take care of business and as a result his book had decreased in size each of the last 5 years. Additionally he’s in his 70’s and just looking to get out. We are both happy.

My book is quite a bit larger than his and growing faster every year. I would not consider selling for less than 4-5 times revenue. But someone who has 100-200 heads really shouldn’t expect more than 1-1.5x.

 

[David Poston]

It’s funny how people who have never bought a book and have no interest in selling theirs have such strong opinions when someone asks about this topic.

1.5x-2.5x is the most common range for buying BOOKS, not agencies.

To the point made above, if they have a staff in place who will manage it all, then you’re buying an AGENCY and the multiple will be higher, tho the days of 8-10x are gone for now unless the agency is a machine with massive growth.

 

[StephanieCJ]

I'm in a contract to buy a book at 1.5x with the payout over 3 years and a clause that if CMS or the carriers cause commissions to be terminated in some way, then I am released from my obligation to pay. Payment is based on the commissions at the time of transfer and not anyone who dies off during those 3 years. Also, it is a family member from whom I am going to be purchasing the book, so I think I got a good deal on that and she just wants to make sure that her clients are taken care of.