A World of Opportunity

By LISA LOEWEN

Many small business owners have spent most of their lives growing their companies from the ground up. It is like raising a child; they have given it life, nurtured it through good times and bad and proudly watched it grow into something wonderful. But like parents who must plan for their own future once the children are grown, as thoughts of retirement become more pressing, entrepreneurs find themselves faced with a new dilemma: a succession plan.

For some business owners that succession plan is clear. An existing business partner or family member will take over the business. But for those whose options are a little more limited, finding an acceptable exit strategy can be complicated.

Owners must consider much more than just their own retirement needs. They have employees who count on them, clients who still need their services, vendors and industry partners with whom they have spent years building relationships, and a reputation that they would like to leave as a legacy.

That can be a hard bill to fill. Unless

a buyout offer that meets all those }requirements comes knocking on your door.

Michael Lesser weighed the pros and cons of selling his agency to World Insurance Associates and knew it was the right decision for his company, his employees and himself.

AN INTRIGUING OPPORTUNITY

Michael Lesser, owner of People’s Insurance Group, is glad he answered that knock, even though he is still years away from retirement.

As owner of his own agency, Lesser had been approached before by brokers looking to facilitate purchase of his business, but he didn’t take any of them seriously. After all, he was too young to think about selling and none of the offers appealed to him. But in May of 2020, World Insurance Associates approached him with an offer that was nothing to joke about.

“I went into that first meeting with an open mind, but also a healthy degree of skepticism,” Lesser said. “From the first meeting, I had an immediate connection with the team at World. They answered all of my questions with straight forward answers and addressed my hesitation without any pressure.”

Lesser had already decided that it would have to be a perfect storm for him to consider selling the business. At only 50 years old, he was coming off the best year he had ever had with a bright outlook for the future. However, he could sense a change coming in the insurance industry and wanted to stay ahead of that shift.

Smaller agencies were being absorbed by larger corporations that could provide a wider range of client products and service as well as more costefficient employee benefits. Growth opportunities for smaller agencies required significant capital expenditures, adding a layer of risk that outpaced tolerance.

That outlook, combined with an honest look at his own retirement options and succession path, had Lesser weighing the pros and cons of selling his agency to a larger corporation. The most obvious benefit was the income from the sale of the business. It would be like taking his retirement early and investing it for later.

A WINNING PROPOSITION

But it was the less obvious benefits that caught Lesser’s attention. Becoming part of World Insurance Associates would instantly broaden the range of products he could offer to his clients because of market size.

“Overnight, I would have access to 50 more carriers and many more products than I ever could obtain on my own,” Lesser said.

In addition to being able to compete with bigger agencies, if he took the acquisition offer, Lesser would be able to provide his clients with more than insurance products because the family of companies

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under the World Insurance Associates umbrella includes human resources solutions, employee benefits services, payroll, retirement benefits, financial planning, compliance and more.

It seemed like an obvious choice, but to someone who has spent 30 years building a business, the biggest obstacle is the one staring back from the mirror. Going from owner to employee is a difficult pill to swallow.

“The idea of giving up control to someone else was always the final caveat that I couldn’t get past,” Lesser said. “But that is where World is radically different. Their model is to add resources and make agencies more profitable with as little change as possible.”

SEALING THE DEAL

That commitment to leaving the local integrity of the business intact swung the pendulum for Lesser and he signed the contracts in August of 2020.

A tweak to change the agency name to People’s Insurance Group, A World Company, and some internal software and technology changes, are really the only thing that has changed.

“Our clients are still going to receive the same quality of service from the same people they have trusted for the past 30 years,” Lesser said. “Now, they just have more options to choose from.”

The real changes are the ones that most people don’t see.

“My employees are making more money and have better benefits and more job security now. If something happens to me, they will still have a place to work,” Lesser said. “On a personal note, I don’t have to worry about the day-to-day headache of accounting, accounts payable, payroll and IT. It frees up more time for me to take care of my clients. And I no longer go to the office on Saturdays to catch up on paperwork.”

FILLING A VOID

Having more time to concentrate on his clients and the additional services he can provide them made Lesser realize what World Insurance Associates was still missing: a safety and compliance solution.

Fortunately for World Insurance Associates, Lesser had a client who had been specializing in safety consulting for decades. He just had to convince both parties that working together would benefit everyone.

Lesser had been writing insurance for Safety Consulting, Inc. for several years and had built a strong relationship with its owner Craig Stromgren. The company, which has offices in Topeka and Wichita, works with clients to provide one-on-one client specific training and consulting that encompasses every aspect of corporate safety and risk management while maintaining compliance with governing regulations.

Safety Consulting was established in 1971 to help businesses navigate compliance issues resulting from the enactment of OSHA. Stromgren purchased the business in 1994 and has spent almost 30 years building a company based on relationships and trust. He oversees the Topeka office while Dan Pabst manages the one in Wichita. Pabst has been providing safety consulting services to clients in Wichita and throughout western Kansas for more than 22 years.

“This is a people business,” Stromgren said. “Our customers, some of whom we have worked with for more than 20 years, rely on us to keep them safe and provide oversight of their compliance. Over 95 percent of our new business is from referrals, so customer relationships and mutual trust is everything.”

That is why when Lesser approached Stromgren about exploring the opportunity to join the World Insurance Associates group of companies, Stromgren didn’t dismiss the idea outright. }

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“Mike and I had spent the past 10 years working together and had already built a strong relationship based on integrity,” Stromgren said. “So, when he asked me if he could set up a meeting with World, I agreed to listen.”

MAKING A CONNECTION

Lesser set up the connection and made the introductions, and then stepped back while Stromgren and World Insurance Associates began discussions.

“I had been approached by companies before wanting to acquire Safety Consulting,” Stromgren said. “But it was a little early for me to consider retirement. This deal was different. They weren’t looking for me to retire. They wanted to keep everything exactly the same and implement a Safety Unit within World for their other offices throughout the country. I found that intriguing.”

That intrigue eventually led to an agreement to sell Safety Consulting to World Insurance Associates in December 2021. Now almost a year into the relationship, Stromgren says he is happy with his decision.

“This acquisition by World actually increases our opportunity to grow and solidifies our financial future,” Stromgren said. “We didn’t really have a succession plan in place, and with most of our employees in their 50s or older, there wasn’t really anyone in place to acquire the business.”

It also gives World Insurance Associates more products in its arsenal: safety and compliance solutions and safety supplies. This means it can now offer Safety Consulting’s services including site safety inspections, safety training, OSHA assistance, DOT compliance, and risk management to clients across the country.

And with the additional purchase of Stromgren’s Safety Supplies business, those same clients can purchase everything from gloves and apparel to gas detectors and confined space protective equipment.

“I created Safety Supplies 15 years ago as a way to improve the service we provide to our clients,” Stromgren said. “We were already providing safety consulting services, so this company helped them find the safety equipment and protective gear solutions as well.”

Craig Stromgren is happy with the acquisition of his business by World Insurance Associates as it increases the opportunity to grow and solidifies a financial future.

LOOKING TO THE FUTURE

One would think that having sold his business, Stromgren would be sitting back and taking it easy, but that is not the case. Instead, he is working harder than ever because he wants to make sure World Insurance Associates is as pleased with the working relationship as he is.

Stromgren is now seeing many of the same benefits that Lesser discovered after the acquisition. Being included under the World Insurance Associates umbrella brings a significant increase in resources but still allows him to foster those local relationships that Safety Consulting was founded on.

“A lot of my clients are my friends. The biggest factor in my decision was our ability to keep those relationships and maintain the integrity that Safety Consulting is known for,” Stromgren said. “Really, nothing has changed in our day-to-day operations. We just added the words ‘A World Company’ to our brand.” TK