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... profit. The preliminary discussions that you should have had with the sellers regarding their future compensation needs will be instrumental in determining these expenses. There also might be changes in employee benefit costs, sales and office payroll, dues and subscriptions, travel, entertainment, and automobiles. Generally the resulting pro forma pre-tax profit will be in a range of 15% to 25% of revenues. It could, however, be as high as 40% or more in consolidation situations where the buyer will not have much of an increase in ... your personnel have the level of technical expertise required to service this business? Is there a substantial amount of income derived from Health insurance, Workers Compensation, Malpractice, or other lines that are vulnerable to regulatory or legislative changes? Does the agency write a lot of Nonstandard Auto or other business that tends to have a shorter-than-average life span? Is a substantial amount of business handled by a non-owner producer? Insurance company relationships. Review the premium volumes and loss ratios with the major carriers and the relative chances of keeping those markets after ... /or exclusive territories assignable? Does the insurance company contractually have the right of first refusal to buy the accounts that you think you're acquiring? Is the seller current with the company payables? What is the trust ratio? Even if you aren't taking on the outstanding liabilities, you could get stuck having to make good on past obligations to retain the company contract. Organizational structure and procedural issues. Review the files for proper documentation and other E&O concerns. Look at how the book of business has been serviced in the ...

...ons, travel, entertainment, and automobiles. Generally the resulting pro forma...