[0:20] Get a cheat sheet for providing value to prospects first!
agentsgrowthacademy.com/sales
Jim introduces Mike
War stories from the M&A battlefield
CEO and co-founder of Agency Brokerage Consultants
Masters and PhD candidate in multiple fields
Made over 220 M&A transactions and 150 evaluations
His top positions and awards
[3:15] How he got into agenting after graduating as a scientist
His dad was a physicist and his mom was a business broker
[4:15] There's a lot of fruit to get into the acquisition game
Mike's friend with a drug dealer and a video gamer
Jim shares their company acquisitions origin story
A great example of playing the long game
Having breakfast with Kendal and selling to him 10 years later
Insurance is like growing a seed
[7:08] Tips and tricks from Mike
His company sees 100 deals a year
The active time makes it difficult for agents to make deals
[8:45] The first rule: take your emotions out of the acquisition
Take time to understand all of the elements on the owner's P&L
You have to ask the questions
2) As the buyer, you need to understand that everyone has their own role
You're making the calls and they're working under you
[12:15] What point in the game should you be getting NDA's?
It's in the seller's best interest to present an NDA first for peace of mind
[13:15] Private equity: how can someone getting into acquisitions compete and not over-buy?
It's tough!
"The easy thing is that they're not going after the smaller agencies." -Mike Mensch
The ones under half-a-million in revenue are the sweet spot
What multiples are they seeing in these?
"Our deals and multiples are higher than the ones we look at outside of us." -Mike Mensch
The market is about two-and-a-half times per agency
[5:40] Are management systems important if your agency is buying another?
Yes!
Consider the sellers that are staying on; some may not want to change but need to
[16:35] How do you deal with the people aspect of acquisitions
The buyers don't want to be the bad guy when they come in
Does Mike advise the buyers not to tell the staff about selling?
An example of how difficult it can get when an employee learned about a company selling
It depends on the relationship!
The day Jim announced selling the Florida agency
[[21:27] What's Mike's acquisition process?
It's hard to find places in a tight market
Expanding out to other states and regions can be difficult
"I would like to find an agency to buy"
Dealing with the sales side
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[24:20] The interview that Mike did for Ted and Arlene
How do you find interested buying parties?
Screen the buyers right to ensure they qualify
Do they have money?
Have they gone through acquisitions before?
You should have a good relationship with the lender
You should have some money saved up
Study the process!
Check out the articles on their website to learn more
20% of the purchase price should be liquid
[27:30] What's the time frame for getting a deal done?
This is the difference between a controlled process versus calling agency owners
For them, it's about four months
[28:38] War stories from Mike
Someone making an acquisition that got him only one P&L
He didn't do his due diligence because the bank gave him the ok
A seven figure deal where the buyers waited 30 to 45 days to meet the staff
They lost 20% revenue in the first year!
"You got to have boots on the ground and calm everybody down." -Mike Mensch
You have to have the script ready
[31:43] One piece of tech that Mike can't live without
His phone
[32:09] A book Mike is reading right now
Predictable Revenue: Turn Your Business Into a Sales Machine with the $100 Million Best Practices of Salesforce.com by Aaron Ross and Marylou Tyler
Jim offers a free Audible book to you!
[34:20] One last piece of advice
"The danger is not knowing what you don't know, so seek the right guidance and counsel." -Mike Mensch
[35:00] Soup or marshmallows?
Soup
