Family-owned insurance agencies are an integral part of the fabric of the insurance industry. Built...
In Cedar City, Utah, a second-generation agency owner is facing the challenge many family-run businesses eventually confront: how to step back from a decades-long career without jeopardizing the future of the agency or the next generation running it.
With $680,000 in annual commissions and a 50-year legacy in health insurance, this small but mighty two-person shop run by a father-son team is built on strong client relationships and consistent growth. But with no additional staff and every operational hat worn by the two of them, the strain is beginning to show.
So how can this agency owner secure an eventual exit without walking away from what he’s built or leaving his son to shoulder the same burdens alone?
That’s exactly the kind of question Equity Expansion helps answer.
A Family Legacy and a Two-Person Operation
Based in Cedar City, Utah, the agency is deeply rooted in its community. Founded in 1972 by the current owner’s father, it passed to the second generation in 2002, and in 2022, a third generation joined the ranks.
“We’ve grown every year,” the agency owner shared. “But it’s just the two of us. No employees. We’re exhausted.”
Specializing 99% in health insurance across individual plans, Medicare, and small group benefits, the agency generates around $680,000 in annual commissions, with 40% of revenue from employer group benefits. Carrier relationships include Select Health, Regence BlueCross BlueShield, UnitedHealthcare, and Anthem.
With no back-office support, everything from quoting and renewals to IT and payroll falls squarely on the shoulders of father and son. During Q4’s open enrollment, there’s no time to sell, grow, or even breathe.
Why Explore a Partnership?
Despite the agency’s consistent performance and multi-generational strength, the owner began to question what the next phase of success could look like. After seeing his father work until his final day never formally retiring, he knew that wasn't the path he wanted.
“My dad has been in the business for 50 years. I want to exit at 30. That puts me in 2032. I want to do better than sitting in the office forever.”
More than a personal exit plan, the priority was making sure his son had a long, successful runway ahead and didn’t inherit a business weighed down by the same time and operational constraints.
The owner wasn’t actively seeking a buyer. In fact, he hadn’t even considered a partnership until Equity Expansion reached out with a structured, strategic alternative.
How Equity Expansion Helped
Equity Expansion approached the agency with a custom-fit partnership model focused on three core pillars: operational support, cultural alignment, and financial upside.
Operational Support: Taking Off the Hats That Don’t Drive Revenue
With only two people managing an entire agency, the load is massive. Equity Expansion helps offload:
- HR: Recruiting, hiring, job descriptions, onboarding
- Accounting: Payroll, rent, commissions, carrier reconciliations
- IT: Hardware support, software upgrades, licensing
- Carrier Access: Streamlined licensing, access to national markets
- Cross-Sell Opportunities: Referrals from other partner agencies
This support is especially crucial during Q4, when owners are overwhelmed by renewals and fire-fighting instead of selling. As the owner put it:
“I don’t really grow my book during the busy time, which is unfortunate.”
By offloading non-revenue tasks, the agency can focus on what matters most growth and client service.
Financial Structure: A Real Example Based on $680K in Commissions
Equity Expansion provided a financial model based on the agency’s performance. While the final valuation depends on earnings and profitability, a sample breakdown looks like this:
- Purchase Price Estimate: ~$2.5 million
- Upfront Cash (80%): ~$2 million
- Equity Rollover (20%): ~$500,000
- Potential Equity Growth: 3x–5x over 3–5 years
→ Potential future value: $1.5M–$2.5M+ - Earnouts: Growth-based bonuses for exceeding benchmarks
- Salary & Commission: Continues post-transaction to maintain income stability
This structure gives the father an opportunity to “take chips off the table” now while setting up long-term wealth for his son through equity rollover.
Culture & Long-Term Fit: More Than a Transaction
Equity Expansion doesn’t just match agencies with any buyer. They focus on trusted partners who:
- Share values around people, service, and legacy
- Are growth-oriented but people-first
- Understand the dynamics of family-run operations
“Your success is their success. Their success is your success,” Equity Expansion emphasized. “It has to be a true partnership.”
Importantly, the owner retains full autonomy through the exploration process there’s no exclusivity, no obligation, and no pressure. Equity Expansion gets paid only if a deal closes and only by the buyer.
The Outcome: Options, Clarity, and Control
The agency owner left the discovery call energized and thoughtful.
“You’ve got the wheels turning. Having support during a busy season… that alone would be a game-changer.”
He didn’t commit on the spot. Instead, he requested time to think, travel with family, and review the roadmap and questions Equity Expansion provided.
And that’s the point.
Equity Expansion isn’t rushing owners to sell. They're helping agency leaders, especially those who’ve built something valuable and personal, create a path forward that balances wealth, freedom, and legacy.
Are You in the Same Boat?
If you’re an agency owner with $500K to $2M in annual revenue, facing similar questions about growth, staffing, succession, or burnout, you’re not alone.
You may not want to sell. You may not be ready to retire. But you owe it to yourself and your future to explore your options.
Equity Expansion is here to help. No pressure, no contracts, just expert insight and confidential guidance.
Ready to Explore the Possibilities?
Schedule a confidential consultation today and learn how a strategic partnership can secure your legacy and unlock new growth without giving up control.
