The countdown begins. Now that all of the high school graduation festivities have subsided, my wife and I find ourselves a mere thirty days away from sending our only child off to college. In preparation for this milestone, I have had many friends and colleagues share their experiences in well-intentioned efforts to prepare, if not forewarn, me about what has been described as a very emotional event.
Like most parents, I look back in amazement as to where the time has gone and how we arrived at this point. The time, energy, work, and emotions that go into raising a child are immeasurable. But somehow, despite all of ones fears and anxieties, they do grow into young adults and reach a point where it is time to let them go.
I found the college selection process and impending drop off to be a particularly reflective time in my life and oddly similar to my experience of selling our insurance agency (Ovation Benefits Group).
I know that may sound like an odd relational connection, but in many ways when you start, build and grow an insurance agency—at times you think of it as your “child.” To some, that analogy may be difficult to connect with, but if you built an agency, currently own an agency, or are a partner in one, you know exactly what I am talking about.
Going through the college selection process, I found myself captured by many of the same emotions and anxieties I had in the process of selling our agency three years ago and wanted to share three simple observations I learned from both experiences.
- The right fit
We visited 10 schools during my daughter’s search and though all of them were fine institutions, she quickly narrowed her focus to three schools for additional visits. For the follow up visits, she got to attend classes, meet professors and interact with current students--all of which gave her a better understanding of where she might spend her next four years. When it was finally time for her to make a decision, I recall her saying “it just seems like the right fit.”
During our courtship by potential buyers, we too went through a similar due diligence to my daughter’s approach in meeting with management, site visits and interaction with personnel. Our investment in the process allowed us to relatively quickly identify OneDigital as the “right fit" for us.
My colleague, Mike Sullivan, does an excellent job diving into this concept in his piece "A Road Less Traveled."
- Trust your gut
My daughter moved from three schools to her final two. All of the college evaluation variables were close, but it was decision time. Though I thought she might break the tie by preferring school colors, I was impressed when she shared that her “gut” helped her make the final decision.
During the selling process, there are a myriad of variables that will swirl around any agency owner, forming a challenging array for the evaluation process --- multiples, earn outs, equity, non-competes, responsibilities, growth rates, brand etc. Despite all of the “empirical” data points you will evaluate, make sure you listen to your inner voice. More often than not, your gut will provide you with the compass your data analysis will not.
- Know when it’s time
Periodically, it can be challenging to not think of my daughter as a little girl traipsing around in her princess dresses. My new reality is that she is a young adult about to embark on the next exciting phase of her life. She is ready; and my wife and I have quickly come to terms with the fact that we are ready as well. It is difficult for any parent, and subsequently any agency owner, to come to the realization that you have done all you can. It is time to let go.
As an agency owner, it can be particularly challenging to know when you are ready—when it is time to sell, or “let go.” With an increasingly hypercompetitive environment (difficult to grow and retain), changing legislative landscape and requirements for continual and rapid innovation, it will be important for all independent firms to continually understand where they are in their agency lifecycle and to not miss your opportunity.
Looking back three years after selling our agency, I can honestly say it was the best business decision we could have made. Four years from now, I am pretty confident my daughter will have the same perspective.
If you want to learn more about OneDigital Mergers & Acquisitions, please contact us for more information.