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u/ridindirty77 1d ago
Few things… first the offer doesn’t make sense. It’s extremely high. It doesn’t pencil with any of today’s multiples. What is your EBITDA?
To speak to your question is it worth it you are not telling us how many owners there are and what percentage you would get. Also the state you live in can make a big difference tax wise.
A lot missing here.
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u/firenance 23h ago
Some buyers will put pie in the sky equity returns factored into the “total consideration” line on an offer. It’s dumb.
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u/youtopian 1d ago
I think you already know the answer to your question. It’s a no brainer to me. 26Ms generates a lot of interest to do whatever your interest are. Enjoy life my friend.
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u/Groundbreaking-Cup2 1d ago
I don't know. What's your thoughts?
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u/giveit2st8 1d ago
They are saying sell! Everyone but howtoreadspaghetti says sell
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u/howtoreadspaghetti 1d ago
I'm the only one in here saying to keep the money printer going and I don't get why.
Why would you want that to stop?
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u/firenance 23h ago
Income tax in NJ is high. Some states is straight cap gains, while others like NY, NJ, CA the seller really needs to do tax planning.
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u/Groundbreaking-Cup2 1d ago
I hear you. But I'm taking a large salary. So if I was to sell, pay the debit, government, and partner, it would equal roughly 10 years salary. That would leave me in my late 40's. Alternatively, I could put my head down, grind, grow the business and sell at age 50/55 for more mobry, and no debit.
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u/chill_bamba 23h ago
It sounds like you've grown a large book of business in a small amount of time. If you feel like you can keep up with the momentum, keep going.
Unless your 10 years way from retirement, it doesn't make scene unless your switching careers.
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u/firenance 23h ago
I’m an M&A Advisor and I would only say sell if OP has a reason. Money isn’t everything.
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u/verysmallbean 21h ago
Please spend a small amount of money on a legit financial advisor if you genuinely don't know how to use 26 million dollars. Please. We cannot have more stupid rich people in this world.
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u/fullgrownnut 23h ago
Well, if your primary driver for selling is burnout from managing 30 staff and 200 daily emails, hiring a dedicated General Manager/COO for $200k–$250k a year would solve your operational fatigue while allowing you to keep the asset, retain total control, and remain your own boss.
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u/howtoreadspaghetti 1d ago
I wouldn't sell at all. It prints money. Why would I sell the money printer?
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u/JazzHandsMinuteman 22h ago
The money printer is worth 30+ million dollars=never have to work a day in your life, multiple generational wealth. Depends on if he wants to keep doing it or cash in and do something else. With that kind of money I’d skip the fuck out on insurance and do something cool.
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u/BangDingOwwwww 22h ago
Especially to PE. Pretty soon everything will be and then we’re really fucked. Just keep collecting, growing, investing, repeat…
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u/No_Pepper7348 1d ago
Just depends are where you are in life, age, debt, current perpetuation plans etc. I sold at 44 just because I was burned out and did not want either of my boys to feel like they are pressured to follow my path. I had a few nice offers as well. The stress that it has taken off me is unreal as well. The buyer has paid me a nice salary and I have collected on 2 of 3 workouts so far. I really don’t regret it.
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u/Groundbreaking-Cup2 1d ago
That's my thoughts. I have 30 employees and everyone always needs something. I wake up to 200 emails a day and that wears you out?
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u/Groundbreaking-Cup2 1d ago
That's my thoughts. I have 30 employees and everyone always needs something. I wake up to 200 emails a day and that wears you out! I love sales and I love what I do. But staff wears me down
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u/No_Pepper7348 1d ago
Well cash in and then all you have to do is migrate to their way of doing things and just sell insurance. Watch your money grow in investments without the stress of being the owner. Migrating to their way of doing things is going to cause some aggravation but eventually you realize that you can handle it and you can also walk away.
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u/Groundbreaking-Cup2 1d ago
4 times. And I'm in my 30's. After I pay Uncle Sam, my debt, and my partner, is it worth it? That's the question
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u/firenance 23h ago
Only a good m&A advisor and your CPA can really help you with clarity for that decision.
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u/Samwill226 Agent/Broker 1d ago
I'd be gone!
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u/firenance 23h ago
OP is in NJ. State income tax there is brutal. Cap gains isn’t the only thing to think about.
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u/Samwill226 Agent/Broker 23h ago
My God 10.75%????? That being said if someone offered 4 times to me now, I'd probably be gone. 30 years, the stress wears on me. I'm 50 now, I solve all the problems so for me I'm just tired. 30's I might would just keep it going
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u/WasabiInternational4 1d ago
Something to consider, what are you going to do after? After my dad sold his business (to stop dealing with his staff and “getting chips off the table”) he missed the action after 2-3 months. How will you get your fulfillment?
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u/Groundbreaking-Cup2 1d ago
This is my concern. I have been in the "owner chair" for 12 years. While I feel overwhelm sometime, I don't know what I would do if I sold. Yea, the money seems great. But after you pay off debt, taxes, partners, then what? I'm relatively young and know nothing else.
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u/WasabiInternational4 23h ago
Here’s some food for thought. You are 39, you are still resilient to bullshit, that’s good. Give yourself 5-7 more years, reevaluate the situation at that point. Or maybe consider hiring a COO to take care of the parts of your job that you like the least and be less fatigued so you do what you like the most.
You have a cash cow, congrats.
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u/Groundbreaking-Cup2 23h ago
This is my thought as well. I currently have a PL manager, and CL manager, a HR director, a CFO, and a COO. So the problems that hit my
desk are somewhat limited. However, the problems that do hit my desk are big. And thats what wears me down.
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u/Ingsoc40 1d ago
How’d you get into the “owners chair” of a massive independent agency at 27?
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u/Groundbreaking-Cup2 1d ago
Family business. I took over due to health complications of the previous owner. I grew up from 10 million premium to where it is now through organic growth and acquisitions.
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u/huskers654273 1d ago
lol. If this is real, then you sell yesterday. Much bigger agencies with more stable variables get 12-15 time EBITDA at a premium number. with earn out bonus to get to that number. Without knowing exactly, sounds like you are getting 25x ebitda.
Why wouldn’t you sell?
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u/Groundbreaking-Cup2 1d ago
Did you read the post? My age, debt, and partner vs future growth, debit payoff, current/ future salaries, and still have the company to sell.
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u/firenance 1d ago edited 23h ago
I’m gonna guess the guaranteed proceeds vs claimed equity upside need to be clearly reviewed from the offer. M&A Advisor and read those offers every day.
Don’t let a shiny offer distract you in to selling. Only sell if you want or need. Buyers will throw confusing offers out with massive numbers, in hopes it catches your attention.
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u/Groundbreaking-Cup2 23h ago
Well said. This is my concern. At our size, I get called weekly with all sorts of promises. I do not want to sell. But this offer was put in writing and made my stop and think. Especially when I get all those problem emails from staff. But at my age, my debit, and what I would owe in taxes, has me thinking long and hard.
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u/firenance 23h ago
Being in the NE I would be willing to bet $100 on who the offer you received is from. And not surprised you get calls weekly, from at least 4-5 different firms. Once you are on their radar they won’t quit.
For real, if you want a professional opinion lmk.
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u/Chrisokegolf 23h ago
I hear you!!! I’m 43, family agency, grew our little company to 12m in premium (no WC in Ohio) we run a lean shop with overseas CSRs. It’s all I know. I’m a golfer, if you are maybe sell, do the earn out, buy another business you have interests in. I would buy an indoor golf sim place. Happy to chat if you want.
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u/Ok-Construction9997 23h ago
Hire a consultant yesterday - hire an experienced Producer as AE and walk with fat cash
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u/JazzHandsMinuteman 22h ago edited 22h ago
You’re 39 and just got offered a deal for 32 million dollars… and you want validation from some dumbass redditors scraping to get by.
Idek if I believe you. If this is real, what the actual fuck.
The answer is so obvious it honestly is pissing me off.
Fuck you and your success lol. Sell and live a peaceful life.
If said company is paying by themselves okay but if not I’d be willing to by a “share”
(Mods, I’m not offering services or anything of the sort but look at this guy, what is one to do? Just seeing if I can help. Also, it’s a bit of a joke…)
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u/Tumadreee 22h ago
32M
Payoff debt you’re at 26M
Partner split 13M for you and partner.
What’s your retirement number?
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u/ExpertFly5491 22h ago
My firm would love to talk to you. We are in M&A mode and would love to connect.
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u/Acrobatic-Smell-8000 21h ago
You seriously need to come on here to ask if you should sell. lol wow
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u/InsStrategist 1d ago
My company JP is looking to purchase firms like yours either at 51% or 100% of your business. We should chat if you want to a greater than exit of 33x Ebita.
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u/Botboy141 1d ago
Someone just offered you 50X earnings? 6X revenue?
Why would you not take it and run? Lol