One of the most noble things you can do as a business owner is recognize when you need help and ask for it. Dan Kiesewetter, of Kiesewetter Insurance in Farmington, IL, began contemplating selling his agency when he came to terms with the fact that his small agency in rural Illinois did not have the horsepower to compete. They weren’t big enough to specialize and they didn’t have the resources or the markets to remain competitive.
Step-By-Step Thinking
When agency owners begin thinking of who to sell their agency to, the thought process often goes: “I’ll sell to my kids; if they don’t want it’ I’ll sell to my producer; if they don’t want it, I’ll find a new young producer to take over; if they don’t want it, I’ll sell to a friendly competitor; if they don’t want it, I guess I’ll sell to private equity.” This is the exact stream of consciousness that Dan experienced as he began thinking about this transition 5 years ago – he explored each option, speaking to his kids, moving on to his employees, interviewing outside candidates, until he eventually entered into an NDA with a friendly competitor, Unland Insurance, in 2022. All was going to plan, until Unland suddenly was bought by a PE firm – Foundation Risk Partners.
“My customers are my family, my friends, my employees, my neighbors. I want the best for these people, and this is the only way I could get that.” Dan’s first plan was not to sell to PE, but he felt like he appropriately entertained every option leading up to it. He trusted Unland, and therefore FRP, completely – though not naively – and after putting the sale on hold for a year, Dan decided to lean in and allowed FRP to pursue the sale of Kiesewetter Insurance. One of the easiest decisions he made in this journey was embracing FRP because of the trust they had in him. He was able to retain the agency name, staff, location, and operations exactly the same, which was incredibly important to him.
Asking for Help
Before he began the process, Dan got connected with IA Valuations through their partnership with Big “I” Illinois. He quickly realized he was in over his head on the contractual side and knew he did not want to try to tackle this himself. He obtained an agency valuation, so he knew his value going into the sale, but he continued to work with IA Valuations through negotiations. “Having an independent third party was incredibly helpful. This is a once in a lifetime deal for me – I have been in the business for 44 years and there’s too much emotional attachment. I needed a third party to feel objective throughout, plus they helped me negotiate more for the agency!”
Heed His Advice
When we asked Dan about any advice he had for agencies as they embark on a transition like this, he had several pieces.
- Due diligence, due diligence, due diligence. He ran a small, rural agency that he took over from his father. They had a lot of handshake deals, verbal agreements, and informal partnerships. These types of deals can work great, but, in reality, they make an official deal “excruciating,” to use his words. It takes a lot to dig up proof of these deals, and outside accountants might not take your word for it. His advice: pay more attention to small details, specifically broker and carrier contracts. His late father was still named on some of his contracts over a decade later; these details matter.
- Patience is key. He was ready to come out in full force with his newly unlocked resources – but things take time. Markets and resources will come, but the transition is not going to happen overnight. Transitioning AMS technology was also a headache he anticipated but is still taking time to get used to. His advice: never go into a deal without at least one very capable and experienced agency manager. His long-time, loyal, and upbeat agency manager has helped ease their way through this transition because of her patience and talent.
- Don’t do it alone. While he already had a sophisticated buyer in mind, he knew he could not represent himself in this sale. His advice: work with at least one third party who can remain objective and honest. For him, it was IA Valuations. The transition is working out the way he anticipated, and he attributes the ease of sale to the help he had.
Dan has stayed on as an employee of FRP and receives a salary, commission, and benefits. He gave an exit timeline of 3-5 years, but he loves his staff, this business, and his new partners, so he can’t say if he’ll be gone by then. Dan remains dedicated to his community, ensuring that his family, friends, employees, and neighbors continue to receive the same care and attention they’ve always known, now and in the future.
By: Colleen Barbara
About IA Valuations and Agency Link – Founded in 2017, the IA Valuations team has performed over 270 valuations to independent insurance agencies across the U.S. Our advisors have 25+ years of experience guiding agency owners on maximizing their agency value, planning, and legal needs for ownership transition. In addition, IA Valuations has provided perpetuation planning, financial modeling and business planning for independent insurance agencies. Finally, IA Valuations has advised dozens of agency owners on selling their agencies through our Agency Link process. Agency Link is a platform that connects buyers and sellers together to further the growth and strength of the IA system. To learn more about IA Valuations, please visit IAValuations.com or contact@iavaluations.com.
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