Multiples vs. Margins: What REALLY Matters when I sell my insurance agency?

Almost every conversation we have with an insurance agency owner who’s thinking about selling—whether it’s tomorrow or three years from now—somehow comes back to one thing: multiples.

What are they right now? What’s my agency worth? How are deals being valued?

All great questions. And ones we’ll continue to dig into in future content. But today, we want to shift the focus a bit—to something that doesn’t get talked about enough:

👉 Margins.

Because while multiples are important, your profit margin can be an even bigger driver of how much you actually walk away with in a sale.

Why Margin Can Be a Game-Changer

We’ve seen this play out firsthand—time and time again. Two agencies with similar revenue, different margins… and wildly different outcomes.

Let us give you a real example we often use when walking owners through this:

• Agency A is doing $1M in revenue at a 20% margin. That’s $200K in EBITDA. They get a 10x multiple and sell for $2M.

• Agency B is also doing $1M in revenue—but at a 40% margin. That’s $400K in EBITDA. Even with a lower 8x multiple, they sell for $3.2M.

That’s $1.2 million more in proceeds, even though the multiple was two turns lower.

So yes, multiples matter—but margins can be the real difference-maker in your exit strategy.

What We Focus on in Every Conversation

When we work with insurance agency owners at Legacy Advisors, of course we’re focused on getting the best possible multiple. That’s table stakes.

But we always push the conversation further.

We ask:

• What’s your current margin?

• Can we improve it before you go to market?

• Is there hidden value we can unlock with the right story, the right structure, and the right buyer?

Because the truth is, if you’re running a well-optimized, profitable business, you’re in a much stronger position when it comes time to sell.

Think Bigger than Just the Multiple

If you’re starting to think about selling—whether you’re early in the journey or already talking to buyers—we encourage you to zoom out.

Don’t just ask what your multiple might be. Ask what kind of value you’ve built—and how to bring that story forward in the market.

We’re here to help with that. Legacy Advisors is made up of former agency owners who’ve been in your shoes. And we’d love to have a confidential conversation about your goals and how to get you the best outcome—financially and personally.

Let’s talk.

Legacy Advisors is the only M&A advisor dedicated solely to sell-side insurance deals. 

With a team comprised of successful ex-agency owners and experienced private equity investors, Legacy Advisors was founded on the mission of helping agency owners make more confident decisions in their journey to a sale.

Most clients begin with an introductory call to ask general questions, discuss market trends, and learn more about our process. If it makes sense for both parties, we then offer business valuations at no charge.