The solution? Strategic partnerships.
Strategic partnerships can provide insurance agency owners with the necessary resources to scale their businesses without getting weighed down by operational tasks. By partnering with a well-established organization, agency owners can delegate back-office responsibilities while focusing on the growth of their core business. In this blog, we’ll explore the benefits of strategic partnerships, discuss how a discovery call with Equity Expansion works, and provide a real-life example of how partnerships can unlock substantial growth opportunities for insurance agencies.
What is a Discovery Call?
At Equity Expansion, we approach partnerships with a consultative mindset. Our goal is to understand your business, evaluate its current standing, and determine whether a strategic partnership is the right fit. This process begins with a discovery call.
A discovery call is an exploratory conversation between you and our team. During this call, we’ll dive into the details of your agency—learning about your history, current challenges, goals, and long-term vision. We believe in providing value upfront, offering insights and information that will help you decide whether a partnership could accelerate your growth.
Terry Swift, Vice President of Mergers and Acquisitions at Equity Expansion, emphasizes that the discovery call is about providing you with the right tools and knowledge. “A discovery call is not a hard sell. It’s about giving you the information you need to decide if a partnership is right for your agency,” he says. “We never push clients into decisions. Instead, we help them explore their options.”
The discovery call is your opportunity to evaluate whether a partnership can help you scale your business, manage your operations more efficiently, and achieve long-term success. It’s the first step toward understanding if a strategic partnership is the key to unlocking new growth for your agency.
The Agency’s Growth Strategy and Market Expansion
During a recent discovery call with an insurance agency, we learned about their growth strategy and market expansion plans. Our client had already achieved considerable success in their initial markets, but they recognized the need to expand into new territories to continue growing.
“We’ve been in the post-COVID phase, expanding our presence across the U.S.,” our client shared. “While we initially focused on the West and Midwest, we’ve also started moving into the East Coast, particularly Georgia, Florida, and Massachusetts. These markets have shown great potential for us.”
This geographic diversification was part of a deliberate strategy to broaden their customer base and solidify their national footprint. The decision to move into new markets was driven by their goal of reaching more clients and positioning the agency for long-term growth.
“California has always been a major market for us,” our client continued. “The commission rates are higher there compared to the Midwest, so we saw a significant opportunity in California’s insurance space and decided to expand our presence.”
By focusing on high-commission states like California, the agency was able to accelerate its revenue growth. Expanding into new markets is a powerful way for agencies to reach new clients and increase their business, but it requires careful planning and strategic decision-making.
Key Insights for Expanding into New Markets:
Adapting to Market Challenges
As our client shared their story, they also highlighted several challenges they had faced along the way. One of the primary challenges was their experience in the under-10 market for employee benefits, which had become increasingly difficult to penetrate.
“It’s been extremely hard to get business written in the under-10 market,” our client explained. “Carriers are restricting our ability to write business for small groups.”
This challenge is not unique to our client. Many agency owners struggle to get business written in the smaller employee benefits market due to restrictions and carrier policies. To overcome this, our client decided to shift focus toward mid-market opportunities.
“We’ve found great success in the 50-75 lives market,” our client continued. “By focusing on mid-sized businesses, we’ve been able to gain better traction and increase our growth potential.”
This pivot highlights the importance of adaptability in business. As markets change, agency owners must remain agile, adjusting their strategies to meet new demands and seize opportunities. Whether it’s moving away from a saturated market or finding a more profitable niche, flexibility is key to staying competitive.
Key Takeaways for Adapting to Market Challenges:
Long-Term Vision: Planning for Future Growth
Our client also shared their long-term vision during the discovery call. They expressed a clear outlook on their plans for the next few years: continuing expansion and focusing on diversifying their revenue streams.
“We plan to continue expanding and targeting markets with high growth potential,” they said. “Over the next five years, we expect to increase our revenue by $25K to $50K annually. Our goal is to hit $500K in revenue by the end of the decade.”
Additionally, they recognized the need to diversify their revenue streams to prepare for the aging out of baby boomers and changes in the Medicare market.
“We’re seeing a shift in the Medicare space as baby boomers age out. We need to diversify into life insurance and annuities,” our client explained.
This forward-thinking approach is crucial for long-term success. Successful agency owners don’t just react to market changes—they actively plan for the future and position their businesses to thrive in a changing landscape. By identifying emerging trends and diversifying their offerings, agencies can secure their growth trajectory.
Key Insights for Long-Term Growth:
Unlocking More Resources Through Strategic Partnerships
One of the most compelling advantages of a strategic partnership is the access to additional resources that may not be available when growing independently. Our client recognized the potential benefits of partnering with a larger organization that could help streamline operations and provide resources for further growth.
“I think the idea of having a partner to help with HR, IT, and marketing is intriguing,” our client shared. “We’ve been handling these tasks ourselves, but I know that partnering with a larger organization could help us streamline operations and unlock more potential.”
A strategic partnership offers access to the infrastructure needed to scale quickly. Whether it’s operational support, access to a broader range of insurance carriers, or marketing resources, partnerships provide a competitive advantage by unlocking the tools and expertise that accelerate growth.
Key Insights for Unlocking Growth with Partnerships:
Financial Readiness: Preparing for the Right Partnership
Financial readiness is a critical component of exploring any potential partnership. During the discovery call, the Equity Expansion team emphasized the importance of having clean financials before approaching potential partners.
“You have to be financially ready before you approach potential partners,” Terry Swift explained. “For every dollar you save on your P&L, you can increase your purchase price by $8. That’s why getting your financials in order is one of the most important steps in exploring a partnership.”
Streamlining your operations and cutting unnecessary expenses can significantly increase the value of your business. Clean financials not only help you secure the best terms but also make your business more attractive to potential partners.
The financial aspect of a partnership is not just about revenue—it’s about long-term profitability. By organizing your financials and ensuring your business is operating efficiently, you can increase your chances of securing a successful partnership.
Key Insights for Financial Readiness:
The Three Pillars of a Successful Partnership
At Equity Expansion, we evaluate partnerships based on three key pillars: culture, operations, and finances. These pillars are critical in determining whether a partnership will succeed and help you scale your business.
“We help our clients evaluate all three of these areas before moving forward,” Terry said. “It’s about ensuring that a partnership makes sense from every angle—culturally, operationally, and financially.”
Conclusion: Unlocking Growth Through Strategic Partnerships
By the end of the discovery call, our client had made the decision to proceed with exploring a strategic partnership. The conversation provided clarity about how a partnership could help them scale their business, improve operations, and unlock new growth opportunities.
The insights gained during the call confirmed that the partnership model was the right fit for their agency. With a clear understanding of the benefits—operational support, financial growth, and access to resources—they felt confident in moving forward with a partnership.
If you’re an agency owner interested in learning more about how a strategic partnership could benefit your business, schedule a discovery call with Equity Expansion today. We can help you explore your options, understand the financial and operational benefits, and find the right partner to unlock the full potential of your agency.
Key Takeaways:
If you’re ready to explore the possibility of a partnership, take the first step by scheduling a discovery call today. Let us guide you through the process of unlocking growth for your agency.