When an insurance agency grows past $1 million in annual revenue, new challenges often replace old ones. For one agency owner in Toledo, Ohio, the question wasn’t whether the business could keep scaling, it was how much longer he could keep doing it all himself.
With a $7 million book of business that’s 95% personal lines and multiple acquisitions under his belt, this agency owner built a thriving business. But like many agency leaders, he found himself wearing too many hats handling HR issues, juggling bookkeeping, and managing day-to-day staff concerns. The dream of growth was becoming a grind.
That’s when he connected with Equity Expansion to explore a new path: partnership.
Building a $1M+ Agency but at What Cost?
The agency owner had spent nearly a decade growing his agency through smart acquisitions and carrier relationships. Two key purchases, one focused exclusively on Progressive auto and another tied to Grange Insurance helped him establish a strong regional presence in Ohio’s Hispanic market.
Key Stats:
- Book size: $7M in premium
- Mix: 95% personal lines, 5% commercial
- Revenue: ~$1.1M projected by 2025
- Carriers: Progressive, National General, Nationwide, Erie
- Growth: Double-digit percentage increases year-over-year
Despite the financial success, the owner admitted:
“By this point, I should be working less. But it feels like I’m working more.”
The issue wasn’t sales it was operational overload. With no dedicated staff from prior acquisitions, and a growing agency to manage, the burdens of HR, payroll, and vendor management began to overshadow his ability to focus on client relationships and new growth opportunities.
Why Explore a Partnership?
The decision to reach out to Equity Expansion wasn’t about giving up control it was about regaining balance.
“The HR stuff I could definitely use to help with... just the day-to-day nitpicking. Who’s going to come in? Who’s sick? Bookkeeping too.”
The owner had successfully phased out commissions and streamlined payroll, but the administrative load remained heavy. Even with automation, he found himself bogged down in details instead of scaling his agency further or planning for his own exit.
The turning point? A realization that he wanted more time away from the business and a structure that could help him transition out by early next year.
How Equity Expansion Structured the Path Forward
Equity Expansion provided a clear framework for partnership evaluation built on three core pillars: operational relief, financial upside, and cultural alignment.
1. Operational Support
The agency owner was particularly drawn to the idea of offloading:
- HR management
- Bookkeeping and reconciliation
- Licensing and compliance
- Recruiting and staffing
- Sales and marketing support
In a partnership, Equity Expansion’s vetted network of partners could assume these responsibilities, freeing him to focus on what he enjoys or step back entirely.
2. Financial Structuring
Using a projected $1M–$1.1M revenue figure, Equity Expansion modeled a $3M–$4M total transaction value under a partnership structure:
- 80% upfront cash = $2.4M to $3.2M
- 20% equity rollover = $600K to $800K retained in the partner’s business
- 3–5-year recapitalization potential = equity expected to 3x–4x, generating another $1.8M–$3.2M
- Earnouts = additional $500K–$1M based on continued double-digit growth
This multi-pronged financial package offered the owner a chance to get paid twice first in upfront cash, then again through equity and performance incentives.
“I like the numbers he threw out. Absolute bare minimum is $3M… a sweeter spot is around $4M.”
3. Cultural Alignment
Equity Expansion emphasized the importance of pairing the agency with a culturally aligned buyer one who shares values, leadership style, and long-term goals.
The agency owner agreed:
“If I’m going to do this, it’s got to be with someone I trust and can work with.”
Before any formal offer, Equity Expansion arranged a confidential meet-and-greet with a vetted buyer aligned by geography, business mix, and values. The agency owner would only proceed if that called confirmed cultural fit.
A Vision for Life After the Agency
The agency owner wasn’t ready to disappear overnight, but he was ready for a phased exit. His ideal scenario?
- Transition away from daily operations by February or March next year
- Reduce working hours without compromising client experience
- Preserve his legacy while still benefiting from future growth
Equity Expansion mapped out a custom timeline, with financial modeling led by its internal finance team. A cleaned-up P&L and thoughtful comp structure would help the agency owner command the highest possible multiple without getting bogged down in details.
The Benefits of Partnership
This agency’s story highlights the real-world benefits of a strategic insurance agency partnership:
- Operational freedom: Offload back-office tasks and focus on growth—or step away entirely
- Financial reward: Get paid upfront and again through equity and earnouts
- Legacy protection: Ensure continuity for clients, carriers, and team
- Strategic alignment: Partner only if the fit is right no pressure, no binding commitment
“The cash consideration makes you rich. Equity makes you wealthy.”
Ready to Explore a Smarter Way Forward?
If you’re approaching $1M in revenue or already there you don’t have to do it all alone. Like the agency owner in Toledo, you can take a step back while your business moves forward.
At Equity Expansion, we guide agency owners through confidential, strategic partnerships that preserve legacy and unlock long-term value. Let’s explore what’s possible. Schedule your consultation
