"In auto parts you're either growing or you're dying. There ain't no 3rd direction." - "Big" Tom Callahan, President, Callahan Auto Parts.

While this isn't the auto parts industry I think there's a ton of relevance. Here's why:

Mergers & Acquisitions have been and will continue be top stories in 2016. Especially when these transactions range from the millions of dollars to the billions of dollars.

Why are "mom & pop" to "hometown" to "Regional player" and even "National" agencies handing over their keys?

How about 4 to 8 times EBITDA, depending on the operation.

You might be surprised to learn that the payout isn't the primary motivator for principals interested in selling their business. Think about the business challenges that today's agency owners must address:

Internal Staffing

Take a look at your agency's payroll. While payroll is one of your biggest costs you still may not have enough people to service your clients.

When it comes to your most important accounts you may not have the right people servicing them due to budget.

You also need to consider who will be retiring and how you plan on replacing them.

When you partner strategically you can slash your expenses while leveraging additional benefits to attract and retain the best talent.

Growth Components

If you're like the other brokers I speak to you work with dozens of carriers. If you're like them you also have revenue requirements you must fulfill.

What happens if you don't have enough premium with a particular carrier? Bye-Bye, carrier.

It can also work in your favor. If you exceed your premium requirements it gives you leverage negotiating a claim or even getting something written.

With the right partnership you've got strength in numbers.

Spread of Risk

In October of 2010 Hurricane Sandy made landfall. What followed was $18.8B in claims.

This story is being told all over again in the Midwest today with the severe flooding.

How will the a fore mentioned "Mom & Pop", "Hometown", and in some cases "Regional" agencies be able to manage the carrier loss ratios?

With a larger, national partnership you're able to spread your risk across the country.

Tommy Boy

To those of you who have perpetuity on your mind, ask yourself this. Can your son or daughter pay you and themselves at the same time in tomorrow's insurance market?

If not, how are you going to give them the business AND retire the way you planned?

Remember Tommy Boy? He only needed to sell a half a million brake pads.

-R