The Bridge: Spring 2018 | MGA/Broker Edition

I N S U R A N C E I N D U S T R Y K N O W L E D G E F R O M O A K S T R E E T F U N D I N GÂŽ

a first financial bank company

Spring 2018

Transformation: Is it time to update your brand?

Page 6

Expansion: Debt as a tool for growth Page 12

FEATURES

MGA/Broker Edition

Spring 2018

Publisher Oak Street Funding Editorial Director Stefanie Neer

Do you have what it takes to thrive in a competitive environment? Evolve your business and take it to the next level.

4

Contributing Editor Sharon Robbins Art Director/Designer Aidreen S. Hart Graphic Contributor Beth Winchell

6 Transformation: Time

The Bridge is a newsletter produced by:

Keep your brand fresh to engage clients.

Oak Street Funding 8888 Keystone Crossing, Suite 1700 Indianapolis, Indiana 46240 844-357-9346

for a brand update?

12

Expansion: Debt as a tool for growth Push beyond organic growth with an infusion of capital.

14 Business Attractivity Are potential partners or buyers interested in your business?

Share Your Thoughts If you have any questions, comments or ideas for The Bridge®, let us know. Email us at marketing.box@oakstreetfunding.com or visit us on social media.

Oak Street Funding does not make any representation as to the accuracy or suitability of any of the information contained in these advertisements or sites and does not accept any responsibility or liability for the conduct or content of those advertisements and sites and the offerings made by the third parties. Third party advertisements and links to other sites where goods or services are advertised are not endorsements or recommendations by Oak Street Funding of the third party sites, goods or services. Oak Street Funding assumes no responsibility for the content of the ads, promises made, or the quality/reliability of the products, services, or positions offered in all advertisements.

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Loans and lines of credit subject to approval.

Potential borrowers are responsible for their own due diligence on acquisitions. California residents: Loans made pursuant to a Department of Corporations California Finance Lenders License (#6039829). The materials in this paper are for informational purposes only. They are not offered as and do not constitute an offer for a loan, professional or legal advice or legal opinion and should not be used as a substitute for obtaining professional or legal advice. The use of this paper, including sending an email, voice mail or any other communication to Oak Street, does not create a relationship of any kind between you and Oak Street.

© 2018 by Oak Street Funding LLC. All rights reserved. Any duplication without prior written permission is strictly prohibited.

www.oakstreetfunding.com

LETTER FROM THE FOUNDER/CEO

Destination: EVOLUTION

Whether your business has experienced no, average or exponential growth in the last few years, it can become easy to get stuck on autopilot.

Doing things as you have always done them can jeopardize future growth, as stagnation can make it harder to implement the required changes for sustained success.

This edition of The Bridge is all about looking inward to determine which elements of your business need a push to evolve. Is your current branding doing an effective job at communicating who your company is, how you are different and what you offer? If you are considering selling, are your operations sophisticated enough to make your business appealing to a potential buyer? Is it time to implement those strategic growth initiatives? You are in the driver’s seat. In which areas will your business better itself this year?

Strategically evolving may require an investment. Oak Street Funding provides insurance businesses with debt capital for growth, acquisitions, successions and more. Whether you are maturing, expanding, or planning

Free Webinars on Demand Our resources are packed with expert advice and best practices.

Watch now! oakstreetfunding.com/webinars-mga

to exit your business, evolution should be a constant theme. We’ll get you there.

Oak Street Funding® Vision Statement Rick Dennen, Founder, President & CEO

To be the market leader in client experience for commercial financing by delivering unique and diverse product offerings through cutting edge technology and exceptional employee and client service.

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sk most people about naturalist Charles Darwin, and

they’ll probably mention evolution. But the real hall

mark of Darwin’s work dealt with a concept called natural selection. Through natural selection, species that adapt to the challenges of their environment achieve long-term survival, while those that fail to adapt quickly become extinct.

The concept is also widely known as “survival of the fittest,” and it’s equally applicable to the world in which today’s insurance professionals do business. Today’s insurance marketplace is incredibly complex and constantly evolving, particularly on the technology front. As Darwin clearly understood, you cannot control your environment. However, you are in control of how you respond to that environment. How you adapt - namely, how you modify or improve your products, processes, and your overall organization – will largely determine whether you survive the coming years.

Adapting begins with analysis

An insurance business that’s determined to succeed for the foreseeable future should be in constant adaptation mode. The 4 | w w w.oakstree tf un di ng.com • 8 4 4 - 3 5 7 - 9 3 4 6

measure of success in any business usually involves some measurement of customer or revenue growth. Whether your business has experienced average or exponential growth, it can become easy to get stuck on autopilot. Doing things as you have always done them can jeopardize future growth, as stagnation can make it harder to implement the required changes for sustained success.

In order to evolve, it is critical to evaluate the entire business operation and adapt to meet the company’s and market’s changing needs. Looking inward can help drive development of new skills within your staff as well as promote efficiency of internal processes – all of which bring about continued transformative growth and an improved bottom line.1

The role of talent

As you are likely aware, one unhappy team member can sink a business and reduce overall employee morale. This effect can trickle down into your processes, your client satisfaction numbers and bottom line.

Questions to Ask:

Are employees in your organization truly happy at work?

• Do they enjoy their roles and feel fulfilled?

• Do they feel adequately compensated and/or praised for their efforts?

• Are they getting along with other team members?

• Do they feel frustrated about any of their current job responsibilities or processes?

• What is their vision for their future career track?

Potential Solutions: • Review and evaluate employees at least quarterly to understand their needs, praise their efforts and evaluate current performance.

• Ensure employee compensation is in line with industry averages to reduce turnover.

• Foster employee engagement through team-building exercises and routine, company-wide social gatherings.

• Find ways to incentivize and reward star performers in your business.

• Give employees opportunities for growth within the organization when possible.

Managing your human capital and helping them adapt to the shifting needs of your business is critical. Investing in professional development is one of the most effective ways to sharpen a team’s performance. Generally speaking, it’s far more economical to build upon the investment you’ve already made in people than in trying to find and hire new team members. Assessing the skills of every team member and giving them opportunities to add skills not only makes them more valuable to your business; it also boosts their personal satisfaction and professional confidence.1 Employee Education Making sure your employees thrive in their roles involves more than just making sure they understand their day-to-day responsibilities. Your team members represent your company’s brand, and they should be living out the mission and values your business holds dear. In addition, it’s important that everyone maintains a consistency of service across the board. Here are some ways you can find out if employees have been properly prepared to serve in their current roles:

Questions to Ask:

• Help employees understand the current targeted customer, his/her main needs and concerns, and how your products and services fill that need.

• Start a training program or increase educational funding to improve employees’ knowledge of a specific product or service line.

• Set up a mentoring program to allow new employees to shadow seasoned staff members.

Business Operations: Streamlining a company’s operations can add tremendous value in all areas of the business. While business owners can analyze spreadsheets, the heart of improving the operation lies in evaluating and making changes within the people, processes and technologies. Solicit employee feedback to find out how your business can improve efficiencies:

Questions to Ask:

• Does every member of your team follow the same automated process?

• What inefficiencies, manual processes or overlap do employees encounter in their daily work?

• What solutions do employees recommend for automating these inefficiencies?

• Does your business need to adjust employee count in certain departments to continue with the current growth trajectory or meet revenue goals?

Potential Solutions: • Standardize and document current processes and procedures so that all team members (including new hires) are following the same methods.

• Reduce manual processes and eliminate paper trails through use of electronic filing and organization.

• Re-align staff and hire if necessary to better optimize processes and meet the needs of the organization as it grows.

• Invest in technology such as customer relationship management (CRM) software to help your sales and customer service staff perform their jobs better.

• Look to larger or more seasoned organizations in your industry for advice and solutions to consider for automation and improved efficiencies.

• Do employees know your company’s mission and vision?

• Are they aware of the company’s current goals and expectations?

• How well do they know your products and services and how are they articulating this information to clients?

• Are they being given the tools and training necessary to complete their jobs effectively?

• In what areas of the business do they need to or desire to learn more?

Your own adaptation All of the concepts outlined above provide insight into the types of self-examination and strategies insurance businesses can use in developing their own plans for adaptation. Your company is unique, and there may be other approaches that are more suitable. But you need to do something. The industry is ever-changing, and Darwin’s wisdom will be proven again and again.

Potential Solutions: • Make sure your employee on-boarding process includes training on information about the company’s history, mission, vision and values.

Footnotes 1 Charles Schwab, “Accelerate Your Success: How Talent Development Can Benefit Your Firm,” schwab.com, July 2016.

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When you think about your company’s brand, what comes to mind? Are you fully aware of how your customers perceive your business? When is the last time you asked yourself: Is our current brand doing an effective job in communicating who our company is and what we offer?

To get started, let’s review exactly what a brand is, and what that means to your business. Your brand includes a comprehensive blend of several things, including the following: • C ompany Mission/Vision: What does your company stand for? For example, Steve Jobs’ original mission statement for Apple® was “To make a contribution to the world by making tools for the mind that advance humankind.”1 •P romise: This is typically an extension of your company mission. What is the tangible benefit you give to customers when they purchase your product or service?

•P ersonality or Voice: If your company was a person, what would be its personality? Funny? Cheerful? Serious?

Sophisticated? This brand personality or voice can come across in your marketing and communication.

• Logo (visual representation of your business): This is what most people imagine when they hear the word “branding.” The logo is the company’s symbol that represents the brand visually, using graphically-designed symbols and/or words. You can even seek to trademark your logo.

• Tagline (catchphrase or slogan): When referring to branding, the tagline can be used alongside the company name and logo to represent or identify with your product, service or company.

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• Marketing messaging: The language you use in marketing materials should also correlate with your overall brand strategy. This includes the personality or tone of the content in an advertisement, your website content and printed marketing materials.

Successful Brands Start with a Plan.

One way you can create a successful brand is to have a formal marketing and communication plan. A marketing plan can help guide you toward creating a memorable brand because it involves steps like analyzing your competitive landscape, identifying your ideal customer, and developing your unique selling proposition (USP). From there, you can determine your mission and vision, along with the best logo, tagline and marketing messages to use in your marketing and sales campaigns.

Let’s dive in further on how you can identify your unique brand through an exercise:

Uncovering Your Unique Selling Proposition (USP)

The acronym USP, is a marketing term which stands for your unique selling proposition, answers the question, “What is it that my company offers that our competitors do not?” In other words, “What makes us so unique that our customers prefer to buy from us over anyone else?” If you are not using your USP in your branding and marketing activities, you are failing to differentiate your business from your competitors.

First, you need to have completed some analysis on your ideal customer, so you can understand their top pain points, beliefs and values, as well as research on how you can find other similar customers. Second, think about the one benefit that makes you stand out from the rest. Make sure that your competitor cannot claim the same thing, or it’s not a unique differentiator. What problem do you solve for your customer?

Here are some common ways you can create a USP for your business: •P rice (higher or lower): Be sure to explain why your company positions itself as a high-or low-cost provider and make this your differentiating factor. If you want to step away from becoming a commodity product or service, the key is to make your company stand out so much from the crowd that people are willing to pay a little extra to get the added benefit from your differentiator.

• Above and Beyond Service: Instead of simply stating that you offer the best service, tell us why by providing a few examples. One way to do this might be to highlight a testimonial or client story.

• Convenience: Do you offer a special way for clients to interact with you?

An example might be online interaction or an incredibly quick turnaround time for requests. Again, think of your ideal customer and their reasons for choosing you.

• Product features or benefits (exclusive, popular or innovative): Don’t spend your time here describing what your products include. Think of something extra that you offer that your competitors don’t offer, which is also appealing to your customer.

Your USP Statement:

___________________________________________________________ (my company) offers ____________________________________________________________

(target audience) As you begin to think about your company’s brand, consider writing your own USP statement using the exercise above. If it’s not ______________________________________________________________ unique enough, ask your clients why they choose you. Sometimes this (your unique offering) process will reveal a hidden USP that you didn’t consider. This might so that they can _______________________________ become the ticket toward a successful new brand! (benefit gained) Once you have written your USP statement, it’s time to create or update your brand. Enlist the help of a professional marketer or design firm to create your new brand, which will include a mission/vision, promise, voice, tagline, logo and color scheme. In addition, you should establish a brand guideline sheet which outlines your brand details and how to use it. Your brand needs to be everywhere, including your website, business cards, email signature, customer invoices, social media, advertisements, direct mail campaigns, office signage, and more. Try to establish a cohesiveness across all mediums to reinforce your mission for your prospects and customers. Stay true to your brand and strive to be distinct. Train your employees to live and breathe the new brand, and it will continue to serve you well.

1 https://www.investopedia.com/ask/answers/042315/what-apples-current-mission-statement-and-how-does-it-differ-steve-jobs-original-ideals.asp

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:industry news

Ouch!

How severe was P/C insurers’ underwriting loss in 2017?

Calling all producers: Make social media a friend, not foe Amidst following up on leads, generating new business,

The U.S. property/casualty industry recorded a

and meeting with clients, many insurance producers are

net underwriting loss of $23.5 billion for year-end

ignoring the power of the web. A lackluster online

2017, according to preliminary results from A.M.

presence can cut agents and brokers off from a wide sea

Best. The 2017 underwriting loss was mainly

of potential customers. “These are people that have lots

due to an estimated $52.9 billion paid out for

of experience and knowledge to share, and they don’t

catastrophes, more than double what P/C insurers

do a very good job of getting that out into the world for

handled the previous year, according to the A.M.

others to see,” said David Estrada, industry veteran.

Best analysts.

Watch out! Tech giants’ data expertise could challenge insurers The vast amount of data held by tech behemoths, and the insight that such data can offer into consumer habits, may well give them an edge over insurers still struggling to get to grips with technology. “It wouldn’t take much for a big tech giant to start offering insurance, given what they know about people already,” Sanjay Parekh, CEO of Cocoon, told Insurance Business.

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Time to invest?

Large commercial insurance brokers investing in AI, Analytics 13 creative ways to get the word out about your new job opening Struggling to capture the attention of qualified candidates? 13 entrepreneurs from Young

Large commercial brokers transacting business with

Entrepreneur Council (YEC) came up with several

multiple carriers and distributors are seeking to differen-

innovative and non-traditional ideas, such as

tiate themselves in a competitive marketplace through

rewarding your existing employees when they

improved technology such as artificial intelligence,

talent scout, using Instagram stories or holding

analytics and workflow tools. A report found that mobile

an open house to allow candidates to get a feel for

and portals are also important areas for investment.

your company culture.

Workflow is the number one problem that brokers face.

®

Lesson: What did the cyber insurance industry learn from 2017 hacks?

The NotPetya, WannaCry and Equifax® hacks of last year were evidence that the U.S. insurance industry has been ill-prepared to handle a large cyber-attack. As a consequence of the attacks in 2017, the industry and its customers may be at a tipping point in favor of better cyber readiness and coverage, according to panelists at the 2018 AIR Casualty-Cyber Seminar. Although the risks are broad and the industry should recognize it can’t protect against everything from every perpetrator, it needs to be working to minimize risk as much as possible.

https://www.insurancebusinessmag.com/us/news/breaking-news/how-producers-can-make-social-media-a-friend-not-foe-95230.aspx https://www.insurancejournal.com/news/national/2018/03/20/483870.htm https://smallbiztrends.com/2017/09/top-social-media-sites-for-marketing-small-business.html https://smallbiztrends.com/2018/03/creative-ways-to-share-new-job-openings.html https://www.insurancejournal.com/news/national/2018/03/13/482919.htm https://www.insurancejournal.com/news/national/2018/03/14/483196.htm

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Get to Know BRAD KRONLAND

Brad Kronland is Vice President of Strategic Markets Sales at Oak Street Funding®. If you need capital to support your insurance business goals, we encourage you to talk to Brad. Below are some questions that he frequently receives from his borrowers that may help you as well.

What is the biggest struggle you are currently seeing insurance businesses face while striving to grow?

The major growth challenges in the industry include the continued consolidation of major players, the lack of new young talent, and the implementation of technology into insurance.

Competition for acquisitions is at an all-time high with new private equity players entering the market, large aggregators swallowing up smaller shops, and market multiples pricing out the smaller to middle market players.

The best way to face these challenges is to create internal succession plans by hiring and training good young talent, embracing technology to differentiate yourself from competitors, providing true value add to the client and creating a defined plan around organic vs. acquisition growth.

and don’t sell them in the secondary market, it’s easy for us to not only fund the first acquisition, but the second, third, and fourth as well.

Other mistakes people make are overestimating and relying on future revenue growth to cover debt service, underestimating the deal costs associated with an acquisition, and wanting to overleverage the business which provides little cushion for any unseen downside.

What makes Oak Street Funding different?

What are some of the mistakes people make when trying to borrow?

Tunnel vision – Here’s an example: I’d say about 70% of our loans fund acquisitions. Sometimes borrowers get so focused on trying to win the acquisition in front of them that they don’t consider the other potential lending needs they may have in the future. We try to sit down with our prospects early in the process in hopes to fully understand what their long-term goals are. We want to make sure we structure loan facilities that make sense for the long-haul, not just a short-term fix. Since we hold all our loans 10 | w ww.o akstree tf un di ng.com • 8 4 4 - 3 5 7 - 9 3 4 6

Oak Street Funding isn’t just another lender. We have deep insurance industry expertise so there’s no need to teach your lender how insurance works. Long story short, we understand you and that is what leads to a prosperous relationship. A consistent theme we hear over and over again is that our ability to structure loans based on our client’s needs, instead of SBA requirements, is really is appreciated and valued. Clients also give us high marks on our closing speed and exceptional customer service.

Are you ready to learn more from Brad? You can reach him at brad.kronland@oakstreetfunding.com or 317-428-3827.

Think MarshBerry: Creating a Customized Path to Success Your agency is unique. So why settle for off the shelf advice?

You deserve a customized approach to growth—a path designed specifically for your business. One that accounts for your people, your culture, your market and your goals for the future.

You are different. Think differently with MarshBerry and succeed your own way.

800.426.2774 • MarshBerry.com

MARSHBERRY learn. improve. realize.

MarshBerry Solutions: • Merger & Acquisition Advisory* • Capital Raising* • Perpetuation Planning • Valuations • Sales Performance Consulting • Talent Acquisition • Executive Peer Exchange Networks • Business Strategy & Planning • Proprietary Financial Benchmarking • Industry Analytics & Perspectives

Insurance Consulting & Advisory For: • Independent Agents & Brokers • National Brokers • Private Equity Firms • Banks & Credit Unions • Insurance Carriers • Specialty Distributors • InsurTech • Insurance Service Providers

* Securities offered through MarshBerry Capital, Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 (440.354.3230).

ADVERTISEMENT

Debt

“Neither a borrower nor a lender be,” cautioned Polonius in “Hamlet.” William Shakespeare’s advice has gone on to form an attitude about debt that has survived countless generations.

Most insurance professionals are financially conservative by nature, and their attitudes toward borrowing often spill over into their businesses. They avoid debt in their personal lives and do their best to steer clear of it in their professional life as well.

There is unquestionably some wisdom in avoiding debt, particularly for individuals. One of the first financial lessons most people learn is to live within their means. Taking on more debt than we can afford to repay can easily push us into a situation that spirals out of control.

Different for businesses

But debt plays different roles for individuals and businesses. In fact, when it comes to business borrowing, “debt” isn’t the most accurate term. A better choice is “leverage,” because that describes the role borrowing can play in your insurance business. Essentially, when your company borrows, you’re leveraging other people’s money to achieve a purpose that will increase your wealth and/or the value of the business.1 In fact, the idea of borrowing is so negative to many business owners, that they make a big mistake in an effort to avoid it. When they need extra capital, instead of taking on temporary debt, they permanently give up part of their equity by assuming partners or equity investors.

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When you sell equity, you’re giving someone else the opportunity to profit from the hard work you’ve already put into the business, and you’re taking on what Kevin O’Leary describes as “a permanent partner that will bother you for the rest of your business’ life.” 2 Some business owners believe a more sensible approach to business is a reliance on organic growth that doesn’t involve borrowing. On the surface, that may seem like a better solution, but pursuing organic growth forces you to reinvest profits that you would otherwise be taking out of the business as income. It takes more time to achieve, and it essentially forces you to accept a smaller return on your personal investment in exchange for the eventual growth of the business. Careful borrowing, on the other hand, gives you the opportunity to simultaneously increase your company’s profits and your overall return. 3

Debt can be healthy

When you use debt instead of granting equity, you don’t lose any control of the company. As long as you repay the loan on time, you know exactly what your borrowing costs will be, and once you make the final payment, the loan disappears for good.

You’re left to run your business the way you want. 4 In addition, you may be able to deduct both the interest and the principal on the loan from your business taxes, making debt even more affordable. However, be sure to verify deductibility with your CPA or other tax preparer before you borrow. 5

When does it make sense?

It’s important to think of debt as a strategic tool. You can use tools such as lines of credit to help you with shorter-term needs such as managing cash flow. There should be a specific purpose for your decision to obtain financing, whether that’s to buy upgraded technology, build a new office, or acquire another business. Before deciding to borrow, create a business plan explaining your objectives and the return on investment that you anticipate receiving. Be conservative when estimating – understate expected revenues and overstate your costs – so that any surprises are pleasant ones.

If the expected return on investment is significantly higher than what it will cost you to borrow, taking on debt may be strategically wise. However, you should always stress-test your plan. In other words, consider whether you’ll be able to meet your obligations if, for example, your profits don’t match your expectations. 6

have to pay a higher-than-normal interest rate. The more you borrow, the higher that rate is likely to go. 7 Finally, if your business becomes heavily dependent upon debt, it might be viewed as risky at some point in the future when you’re courting a buyer or partner. 8

The financing to support your growth

Once you’ve made the decision to expand and transform your insurance business, you’ll probably need to invest some additional capital in your business.

Where should you go? Often, business owners turn to a familiar source: a bank. However, most traditional banks aren’t comfortable with the financial structure of insurance businesses.

Most are geared to making loans to businesses that have tangible assets such as inventory, equipment, and real estate.

That’s why a growing number of insurance business owners are turning to specialty lenders that are accustomed to working with the confines of the insurance industry. Such lenders understand how a business like yours operates, and are familiar with the nature of your income streams, so they can approach the underwriting with realistic expectations and an appreciation for inherent risks.

Are you ready to strategically take your business to the next level? 9

Are you ready to strategically take your agency to the next level?

17%

working capital

14%

hiring

How Oak Street Funding® loans were used to implement growth in 2017 marketing/leads location/office expansion

22%

acquisition

24%

pay off company debt

tech upgrades

3% shareholder buyout

Debt drawbacks

As an insurance professional, you know that every reward carries corresponding risks, and the use of debt is no exception.

The advantages of using debt to grow your business are offset to some degree by several points. The biggest is that you’ll be expected to repay what you owe, even if something happens to your business. In some cases, you’ll be expected to back your loan with a personal guarantee, so that if the lender can’t collect from your business, it can chase your personal assets. And, if the lender requires collateral, borrowing may place some of your business assets at risk. In addition, if you file bankruptcy, the lender will get first crack at any assets that remain.

Depending on the market, the lender, your company’s financial health, and your own personal credit history, you may

Footnotes 1 “When Debt is Good,” Investment Advisor, July 3, 2017.

2 O’Leary, Kevin, “3 Ways to Grow Your Cash Flow With Debt,” inc.com, April 7, 2016.

3 Scott, Mark, “Debt is a cheaper way to grow your business,” sbnonline.com, January 1, 2017.

4 Allen, Scott, “Debt Financing: Pros and Cons,” thebalance.com, March 20, 2017.

5 Kunigis, Allan, “How to Finance Your Business Growth,” thehartford.com, undated.

6 Scott, ibid.

7 Allen, ibid.

8 Kunigis, ibid.

9 Date as of January 1, 2018. Individual loan results may vary and revenue growth is not guaranteed. In November of 2017, Oak Street Funding® sent an online survey via email to over 20,000 insurance agency owners throughout the United States. The results presented are from 200+ professionals who responded to the survey.

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EVOLUTION CROSSWORD 1

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the crossword digitally.

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4

7

3

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8 10

9

11

12

13

Across 1. Your biggest asset 3. Expansion 4. What you are striving for 8. Survival of the fittest 9. Tool for growth 12. Lender who understands your unique capital needs 13. Buying a business

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Down 2. Destination 5. Becoming the best business you can be 6. Logo and tagline 7. To simplify processes 10. To simplify processes 11. Communicate to prospects

ACROSS: 1. employees 3. growth 4. success 8. adaptation 9. debt 12. oakstreetfunding 13. acquire DOWN: 2. evolution 5. sophistication 6. brand 7. streamline 10. mission 11. marketing

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Are potential partners or buyers interested in your business?

In this age of consolidation and acquisition, many insurance businesses are keeping their options open for a future partnership or sale. If you are a business owner interested in these options, do you know whether your business operations are truly sophisticated enough to be appealing to a potential partner or buyer? If not, it may be time to step up your game. With many successful, growing insurance businesses in the marketplace, it’s important to understand what the buyers are looking for, as well as how you can make your company stand out among the crowd of sellers.

Company Culture: Keep in mind that an acquired business will need to merge staff and leadership with the new company. Clearly define, communicate and execute a consistent and unique company culture (your values, work ethic, techniques and goals) so that they mesh well with a buyer’s ideals. This includes the positive traits of the owner, producers and employees, along with the management style of the business.

Your Financial Health

The final step in making your business more attractive includes having a written strategy for who you are, who you reach, how you retain and how you find your clients. Think about and answer the following questions:

Insurance businesses with solid, organized financial records will look more appealing to potential partners or acquiring companies. Here are some things to gather or have in place to improve your chances of selling and make the transition smoother: Compare financials with industry norms: When analyzing your budget, profitability and other financial numbers, research and compare your figures with those in the industry. Look for areas that seem out of the ordinary for a company of your size and adjust accordingly. You can track and compare common expenses such as rent, acquisition costs, overhead and more to make sure you are in line with industry averages.

Invest strategically: When making working capital investments for the growth of your business, keep them in line with your goals and mission. For instance, prioritize spending and investing in things such as marketing, new technologies and people that will result in a greater return for your business.

Keep your operations streamlined: Reduce manual procedures and invest in new technologies to automate your sales and processes. This includes customer relationship management (CRM), proposals and financial documentation. Make sure all of your employees are following the same processes, and document these processes in order to create a more streamlined operation and reduce overall costs.

Your People

One of the greatest assets in your insurance business is your human capital, otherwise known as your employees. To position yourself for an acquisition, make a note of the value that your people bring to the equation. Some ways that you can tout your team as an asset include: Experience and Longevity: Do you have owners, producers or team members with decades of experience in the insurance industry? Have any staff members stayed with the company for many years? Highlight their extensive knowledge on your website’s company overview page and in your promotional materials.

Specialized Training: Tell the story of how your leaders or support team have undergone extensive training or complete regular continuing education to make your business more appealing to a buyer or partner.

Your Marketing Plan:

 How do you nurture your existing clients to ensure they continue working with you

 How do you currently communicate your business to prospective customers?

 Have you clearly identified and fleshed out who your ideal clients is and how you can find more of them?

 Do you have a marketing plan for how to reach your target audience?

 Does your business have a professional website that can be easily found via search methods?

 Are you currently tracking your return (ROI) on your marketing investments?

Companies who have a clear picture of who they are, who they are targeting, and how they are reaching their current client base will automatically become more appealing to a potential buyer or partner.

The Effort Can Pay Off:

The bottom line is that your business must become the best version it can be to make your company more appealing to a buyer or partner. Look to other successful insurance businesses as examples to guide your analysis and strategy. Be sure to align your internal staff and hiring process to fit your new growth and business goals. Continue to organize and streamline your operations, processes and marketing approach for maximum effectiveness and future growth potential. Finally, ensure that your vision, mission and culture are clearly defined and ready to integrate with another potential company. With a plan in place to make your company more marketable from a financial and personnel standpoint, you’ll be in a better position to make that happen when the time is right.

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#OakStreetCares Giving back is very important to Oak Street FundingŽ. This year, our staff has participated in many local and national events and charities. We collected 400+ teddy bears to help reduce trauma suffered by children in violent scenarios, have tutored children – helping them learn how to read, as well as provided school supplies and clothing, have sent supplies for pets affected by the hurricanes, and even have volunteered with Big Brothers

Big Sisters. We are very proud to say we have been busy.