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  • Sale of small business

    updated 3 years, 4 months ago 0 Member · 1 Post
  • Charles

    Member
    September 5, 2019 at 8:02 pm

    Hello r/smallbusiness, We own a captive insurance agency and received approval from the company to sell it to someone. We showed him everything he wanted to see regarding revenue, expenses, and insurance policies contained in the business, and worked out a contract and sale price from there. He signed, we signed, and set the sale date roughly 4 months from the date of the contract (per company rules.) Before we made an agreement, he expressed concern that the revenue had been shrinking. We acknowledged that this was the case, as we had planned on selling the agency, and we had stopped putting any money into marketing. Aside from that, we remained open during regular hours, still continued to quote and sell policies, and aside from marketing, operated the agency like any business owner would. We also have kept as quiet as possible about the sale, and have hardly told a soul. One person in the community made an offer to buy, we turned her down, and she started to tell people around town we were selling. We are about a month away from the sale, and in that time, customers are canceling their policies left and right. It’s as bad as I’ve ever seen it – probably at least 100k drop in premium (~10k in revenue or so). We tracked the cancellations and asked people why they cancel, and 99% of it has been price related, i.e. they found it cheaper somewhere else. I feel bad but at the same time this company has done us dirty, and I cannot wait to part ways. Our lawyer says he signed the contract, so if he backs out and/or wants to pay us less, he’s out of luck. But something about it still bothers me. Do any of you have experience with something like this? Insurance related or not? This is in the US. Thank you tl;dr: captive selling insurance agency, sale about to go through, agency has shrunk a lot do to carrier price issues – by hq overview insurance_cv – –

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