a_decade_after
New Member
- 7
Greetings All,
Thanks in advice for reading through this long post and providing your sincere advice. As the headline says, I’m considering becoming a sole proprietor and going independent, and would appreciate advice from those who have done it.
About me:
I’m 56 years old with 11 years to fully retire. I have 10 years of P&C experience where I was a successful sales agent with an independent agency (no book ownership).
I’ve since left that agency, mainly due to commission changes where my income receded and then stagnated, and toward the end of my tenure I generally wasn't happy there. I have since taken time off to reevaluate my next career direction. I have a few options on the table, one with a large agency as a sales manager, salary and commissions between 60-75k max. full benefits. Etc.
I’ve had a longing to start my own independent agency ever since I got into the business, but never knew where to start and the path / pitfalls to success. But now this desire is even stronger and I have some capital to start.
My concerns:
Success ratio
I’ve read new agency success rate is very low, mainly due to the agency owner not having enough leads, or getting in front of enough prospects, resulting in the inability to generate enough income quickly, ramp up quickly, and support themselves and their families. What are some of the major challenges in being successful as a sole proprietor, independant agency owner?
Prospects / leads
This brings me to my next concern – When the doors open from day one, how did you generate enough prospect volume? I would imagine that lead / prospect volume is vital in the first few months and even more critical starting out on your own then having a base + commission job at an established agency. How did you generate or acquire enough prospects? What is the cost/benefit ratio on lead buying?
Carrier appointments
I understand that carriers will not appoint sole proprietors and this is the challenge. Is joining a cluster the only option to carrier appointments? If so, would commission splits make it harder to ramp up revenue quickly? How does it work if you're with a cluster and you want to sell your agency on the open market?
Time management
As a sole proprietor, how would one handle being on phone all day making calls, or out in the field developing lead sources, and still be available to take inbound calls and generate quotes? I’ve always believed that if you’re not at the phone to answer the call, in the office to answer the door, you’re going to lose that prospect. How did you divide your time successfully between new business generation, and quoting/selling?
Startup costs
What are the typical startup cost? If I remember correctly most insurance companies require the agent to have a brick-and-mortar location shortly after being appointed whether through a cluster or direct. Is this correct? Are they allowing agents to start from home offices? When you started out did you acquire a business loan, or was capital investment from savings?
In my last agent sales position, it took only a few short time to grow my book from $0 to $1MM in annual premiums. Then of course it grew from there. I had no overhead costs and competitive carrier choices and my closing ability is strong.
Book growth was greatly assisted by the fact it was an established brand with occurring walk-in traffic, call in traffic, free outbound leads, an in-office agent to quote/service the agent's walk-in traffic while out, and a customer service team to handle policy changes, billing and other servicing. Starting out on my own I will have none of that. This paragraph summarizes many of my trepidations.
Lastly, how did you do it, and how long did it take to get to $1MM in annual premiums?
I appreciate all the help
Thanks in advice for reading through this long post and providing your sincere advice. As the headline says, I’m considering becoming a sole proprietor and going independent, and would appreciate advice from those who have done it.
About me:
I’m 56 years old with 11 years to fully retire. I have 10 years of P&C experience where I was a successful sales agent with an independent agency (no book ownership).
I’ve since left that agency, mainly due to commission changes where my income receded and then stagnated, and toward the end of my tenure I generally wasn't happy there. I have since taken time off to reevaluate my next career direction. I have a few options on the table, one with a large agency as a sales manager, salary and commissions between 60-75k max. full benefits. Etc.
I’ve had a longing to start my own independent agency ever since I got into the business, but never knew where to start and the path / pitfalls to success. But now this desire is even stronger and I have some capital to start.
My concerns:
Success ratio
I’ve read new agency success rate is very low, mainly due to the agency owner not having enough leads, or getting in front of enough prospects, resulting in the inability to generate enough income quickly, ramp up quickly, and support themselves and their families. What are some of the major challenges in being successful as a sole proprietor, independant agency owner?
Prospects / leads
This brings me to my next concern – When the doors open from day one, how did you generate enough prospect volume? I would imagine that lead / prospect volume is vital in the first few months and even more critical starting out on your own then having a base + commission job at an established agency. How did you generate or acquire enough prospects? What is the cost/benefit ratio on lead buying?
Carrier appointments
I understand that carriers will not appoint sole proprietors and this is the challenge. Is joining a cluster the only option to carrier appointments? If so, would commission splits make it harder to ramp up revenue quickly? How does it work if you're with a cluster and you want to sell your agency on the open market?
Time management
As a sole proprietor, how would one handle being on phone all day making calls, or out in the field developing lead sources, and still be available to take inbound calls and generate quotes? I’ve always believed that if you’re not at the phone to answer the call, in the office to answer the door, you’re going to lose that prospect. How did you divide your time successfully between new business generation, and quoting/selling?
Startup costs
What are the typical startup cost? If I remember correctly most insurance companies require the agent to have a brick-and-mortar location shortly after being appointed whether through a cluster or direct. Is this correct? Are they allowing agents to start from home offices? When you started out did you acquire a business loan, or was capital investment from savings?
In my last agent sales position, it took only a few short time to grow my book from $0 to $1MM in annual premiums. Then of course it grew from there. I had no overhead costs and competitive carrier choices and my closing ability is strong.
Book growth was greatly assisted by the fact it was an established brand with occurring walk-in traffic, call in traffic, free outbound leads, an in-office agent to quote/service the agent's walk-in traffic while out, and a customer service team to handle policy changes, billing and other servicing. Starting out on my own I will have none of that. This paragraph summarizes many of my trepidations.
Lastly, how did you do it, and how long did it take to get to $1MM in annual premiums?
I appreciate all the help
