Seller Readiness Scorecard

3+ years of tax returns organized and available

Buyers will request at least 3 years of returns during due diligence.

Clean Profit & Loss statement prepared

Separate agency P&L from personal expenses. Add back owner perks.

SDE/EBITDA calculated with add-backs documented

Document every add-back (owner comp, personal expenses, one-time costs).

Revenue trend data for past 3 years compiled

Show consistent or growing revenue. Explain any dips clearly.

Balance sheet and accounts receivable current

Outstanding receivables and carrier balances should be reconciled.

Producer non-solicitation agreements in place

Without these, producers can take clients when they leave.

E&O insurance current with no open claims

Active claims or a history of claims will reduce your valuation.

Entity structure reviewed (LLC, Corp, etc.)

Consult with a tax attorney on the best structure for a sale.

Carrier contracts reviewed for assignment clauses

Some carriers restrict transferability. Identify these early.

Office lease terms reviewed and documented

Long-term leases can be a liability. Short-term or virtual is preferred.

Retention rate tracked and above 88%

Retention is the #1 metric buyers evaluate. Above 92% commands a premium.

Client concentration under 20% for top 10 clients

High concentration is a deal-breaker. Diversify before going to market.

Policy count and premium by line of business documented

Commercial lines typically command higher multiples than personal.

Carrier diversification healthy (no single carrier >50%)

Over-reliance on one carrier creates termination risk.

Loss ratio data available by carrier

Low loss ratios show a quality book that carriers want to retain.

Agency management system (AMS) in place and current

Buyers want modern, cloud-based systems with clean data.

Standard operating procedures documented

SOPs demonstrate the business can run without the owner.

Staff roles clearly defined with job descriptions

Buyers need to understand the team structure and each person's role.

Key workflows are digital/automated where possible

Manual processes increase cost and risk. Automate before selling.

Transition timeline documented (6-24 months)

Buyers expect the owner to stay on for 6-12 months minimum.

Key client relationships mapped (who knows who)

Identify which clients are owner-dependent vs. staff-managed.

Staff retention plan discussed or incentivized

Staff leaving during transition destroys value. Retention bonuses help.

Buyer profile and ideal deal structure considered

Know if you want a strategic buyer, PE firm, or internal succession.

Unique value proposition or niche identified

Specialization in a niche (e.g., trucking, construction) commands a premium.

Brand reputation and online presence assessed

Google reviews, website quality, and community reputation matter.

Growth pipeline documented (new business activity)

Active new business writing proves the agency isn't just running on renewals.

Competitive landscape in your market understood

Know your market density and how your agency compares locally.