Page 218 - The UnCaptive Agent

A FINAL WORD OF ENCOURAGEMENT 191

income reductions, independent agents, while facing
some pressures on commissions, also have unprece-
dented opportunities to earn additional income through
bonuses, profit sharing, and the sale of new products.
As I write this, insurance agencies have never traded
or sold for higher nominal multiples. At the end of
2019, insurance agencies with greater than $1 million
in revenue were selling at an average of 10.5 times
EBITDA cash, with an additional three to four times
EBITDA in an earn out. (EBITDA stands for Earnings
Before Interest Taxes Depreciation and Amortization.
Essentially, EBITDA is profits adjusted for the things
that are unique in the tax situation of a given business
organization.)
This translates to between two and a half to three
times or more of revenue for small agencies under $1
million. This represents nearly double the nominal
value of insurance agencies on a traditional basis. As
you build your new business, you’re not only building a
larger income, freedom, and the other intangible things
that you seek, you are also involved in building wealth
on an unprecedented scale in this business.
With all of this, I find that creating an independent
insurance agency is an enormous opportunity for the
committed entrepreneur. If I can be of help to you
personally, or if my organization can be of assistance
to you, please feel to reach out to me. Good luck in
building your dream of insurance agency ownership!