PRIVATEEQUITY

Yes, valuations of independent agencies might have leveled off in the current interest rate environment. But owners can get a good price for their business if they have attractive cash flow and other positive attributes. Even with fewer prospective buyers, demand is high for larger and specialist agencies and always strong for those that are exceptionally well-run and growing

Additionally, there's a silver lining: the PE pause has created potential opportunities for agency owners to acquire another agency that otherwise might have been out of reach.

Strategies Outside of a Sale

An agency with reliable cash flows and a promising future will always be attractive, which means the first strategy outside of selling is to increase cash flow. Agency owners who place a strategic

Continued from page 38 emphasis on growing cash flow by running an effective, efficient operation are adding to agency value while broadening their tactical options over time. Cash flow drives the vitality and viability of a firm, funds its operations, and generates cash for future investment. It's also the source of compensation and wealth for the owners

Cash flow is the most-revered financial measure for lenders and buyers alike. Agencies are attractive investments because they generate reliable, recurring cash flows and offer future growth prospects

Other strategies for agency principals are to seek out acquisition opportunities. Less competition for an acquisition could bode well for principals who become timely buyers. A nimble, financially ready agency principal can become an agency buyer