Notes on the advisor lifecycle

Small Doesn't Mean Cheap: What Actually Moves Your Agency's Valuation

Lucas Parris, senior vice president at Mercer Capital and head of its insurance industry team, opened the third session of FindBob's Summer Series with a simple example. Picture an $11 million sale. The seller tells his friends he sold for 11 times earnings, on $1 million of performance EBITDA. The buyer tells his board they paid 9.2 times, on $1.2 million of EBITDA. Same price. Same deal. Two different multiples, because the two sides scrubbed the earnings number differently. That gap is the whole game, according to Parris, and it is worth more attention than most business owners give it.