The independent insurance industry is built on the backs of Small to Medium-Sized Agencies (SMAs). In fact, agencies generating under $1.25 million in revenue make up nearly 84% of the entire market. They are the backbone of our industry.
Yet, when it comes to selling these businesses, owners are often treated like second-class citizens. Between prohibitive costs and a lack of professional support, the traditional M&A model has failed the majority of agency owners.
At Milly Books, we are changing that narrative. We are democratizing the process to ensure every agency owner, regardless of size, can access the value they have built.
The Luxury Service Problem
For decades, professional M&A representation has been treated as a luxury service, accessible only to the largest firms. For the average agency owner, the cost of entry is simply too high.
- Excessive Commissions: Traditional brokers typically charge commissions ranging from 6% to 12% of the final deal value. They often use complicated, tiered formulas (like the Double Lehman) that confuse sellers and inflate fees.
- Erosion of Equity: These fees take a massive, unnecessary bite out of your net proceeds. You spent years building your equity; you shouldn’t lose a double-digit percentage of it just to close the deal.
- Upfront Risk: Perhaps the most painful barrier is the retainer. Many brokers demand significant, non-refundable upfront fees. This forces you to take on financial risk before a buyer is even found. If the deal doesn’t close, that money is gone.
The Brokerage Gap: Why SMAs Are Left Behind
Despite making up 84% of the market, SMAs face a severe lack of resources. Traditional M&A firms operate on a volume-based commission model. To them, a smaller deal requires the same amount of paperwork as a massive one, but for a smaller paycheck.
Consequently, they prioritize whales and ignore the main street agencies. This has created a Brokerage Gap:
- Lack of Access: SMAs are often told they are too small for professional representation.
- The DIY Danger: effectively locked out of the market, many owners try to sell alone. This leads to undervaluation, legal pitfalls, and poor deal terms.
- The Silver Tsunami: This issue is becoming critical as the Silver Tsunami of retiring Baby Boomers accelerates. Thousands of owners need to sell, but they lack the internal succession plans or external support to do so effectively.
The Brokerage Gap: Why a Broken M&A Model is Trapping Agency Owners
A significant crisis is affecting independent insurance agencies due to a demographic shift with many owners retiring, inadequate succession planning, and a flawed M&A system that neglects smaller firms. This results in eroded agency values and limited options for owners, making a proactive, strategic external sale essential for financial stability.
Milly Books: Leveling the Playing Field
We built Milly Books to be the bridge over the Brokerage Gap. We believe that fair representation shouldn’t be a luxury.
- 3% Success Fee: We have scrapped the complex tiers and high percentages. We offer a flat 3% success fee. It is simple, transparent, and significantly lower than the industry standard.
- Zero Upfront Costs: We charge $0 in retainers and $0 in listing fees. We assume the risk with you. You only pay us when you get paid.
- Alignment of Interest: Because we don’t take money upfront, our only goal is the same as yours: closing a successful deal.
Unwavering Focus on SMAs
Milly Books isn’t just a cheaper version of a traditional broker; it is a platform engineered specifically for the SMA market.
- Tailored Technology: Our platform handles the nuances and operational scale of smaller agencies, stripping away the unnecessary complexity that clogs up enterprise deals.
- Strategic Flexibility: We understand that SMAs often need creative exit strategies. Features like Slices allow you to sell custom segments of your book (rather than an all-or-nothing sale), providing flexibility that traditional brokers rarely offer to smaller clients.
Ready to explore your options?
Milly Books is the new, affordable option. By eliminating upfront costs and slashing success fees to 3%, we are ensuring that the Small to Medium-Sized Agencies—the true backbone of the insurance world—can finally access the marketplace, find the right buyers, and realize the full value of their life’s work.
Stop paying for luxury fees. List your agency with Milly Books with zero upfront cost and start your journey today.
Frequently Asked Questions (FAQ)
It is a complex fee structure used by traditional brokers where the commission percentage applies to different tiers of the sale price (e.g., 10% on the first million, 8% on the second, etc.). It often results in higher overall fees and is confusing to calculate compared to a flat percentage.
While our platform is optimized for the underserved SMA market (agencies under $2.5M revenue), our technology and valuation tools are powerful enough to handle transactions of any size.
Traditional brokers charge retainers to cover their time and overhead in case a deal doesn’t close. At Milly Books, we use technology to reduce our overhead, allowing us to waive these fees and take on the risk alongside you.
Glossary of Key Terms
- SMA (Small to Medium-Sized Agency): Generally defined as an independent agency generating less than $1.25 million (and up to $2.5 million) in Annual Recurring Revenue.
- Brokerage Gap: The market failure where traditional M&A firms neglect smaller agencies in favor of larger commissions, leaving SMAs without professional representation.
- Success Fee: A commission paid to a broker or platform only after the deal is successfully closed and funded.
- Retainer: An upfront, often non-refundable fee paid to a professional advisor to secure their services, regardless of the outcome.
- Silver Tsunami: The demographic wave of Baby Boomer business owners reaching retirement age, creating a surge in the supply of businesses for sale.
Other articles in this series
Selling Your Independent Insurance Agency? Don’t Settle for the Broken Traditional Model
At Milly Books, we believe you deserve better. We built a platform from the ground up to solve these exact problems. We provide the data, tools, and market access you need to take control of your sale, maximize your value, and sell your agency your way.
Selling Your Insurance Agency: Challenges, Motivations, and Solutions
This guide explores the core motivations driving modern sellers, the four specific challenges that hold them back, and how technology-driven solutions like Milly Books are democratizing the M&A process.
The Importance of Agency Perpetuation Planning and Valuation
Secure your agency’s future and maximize your exit value. Learn the pillars of insurance agency perpetuation planning to transition from a practice to a sellable asset.