Becoming a State Farm Agent

[Newly Approved SF]

I have recently been approved to go into the approved candidate pool. I have read these post and they do make someone think twice or more about this opportunity. The reality is it is an opportunity that has risks as with any business. If you don't do well you'll go broke or you'll have to close your doors. I have heard of TICA agents in this market that have been cut in their last month etc with a great amount of debt but were counseled in reviews before it happened.
As far as the company goes I feel it is the best choice out there for this type of career. I have also looked at Allstate's program and was approved through them also( much easier) and their training program is a lot shorter with less pay during. Yes you own your book through them but it is only worth what you may be able to sell it for to someone else or back to the company for 1.5 times yearly earnings. They also push hard for financial services. If you buy a book of business most agents expect 2 to 3 times yearly earnings. So a million dollar book paying $100000 in commissions will cost you $200000 to $300000. If you have that kind of cash going in more power to you but more than likely you'll have to finance it with a business loan that over 10 years will have a payment of $2400 to $3700 a month depending on the price of the book. Do the math on that one. We'll say you get it on the low end at 200k.
Monthly Income from purchased book:$8333
Business loan: $2400
Rent estimate: $2000
1 staff @ $10 per hour $1700
1 staff @ 15 per hour $2600
Advertising $1500
Business insurance $ 150 month
taxes on employess $250
Utilities $ 250
Phone $ 300
postage $ 200
Office supplies $200
Plus other expeneses not listed I'm not even putting in here
and you don't take out a check for yourself.
is a loss of $3217 a month. or profit of $817 if you paid cash.
This does't take in any lapse or cancel rate either. You'll be buying these customers only to have them leave you at 10% to 20% per year. More than likely the $200000 you spent you'll still be making payments on for a good 4 or more years after they are gone.
This all said... YOU HAVE TO PRODUCE AND GROW TO MAKE IT WITH ANY COMPANY. You have to keep ahead of the lapse/cancel percentage and grow above it.

So with Allstate you could be in debt almost $250000 or more at the end of the first year or worst with a smaller book than you started with and how long will it take you to sell it to get out? There are a lot of books for sale all over the US. Scarey!!!

With State Farm they Give you a book this size most of the time in an opportunity other than New Market.

From my research and talking to New Market Ticas with 3 or less years in it I have come to the conclusion that a Scratch agency is very difficult and costly. You'll go into debt the quickest with this one. I would not nor recommend anyone to do a scratch agency with ANY COMPANY not in this day and time and the great amount of competition out there today. Plus you will not get your permanent contract for 5 years with a new market opportunity from State Farm.

With the traditional you only have a year of TICA. Make it through it get your contract and do what you need to to make it happen for you and make your goals happen what ever they may be.

State Farm is not a bad company. They are evolving like all companies are today. They make changes that they feel will better the likelyhood that the company will survive and prosper as an entity and restructure making changes in pay and benefits to do it. How many companies out there are paying their CEO's and executives millions upon millions in bonus when the company is loosing money but laying off the little man making $24000 a year or less? How many workers could keep their jobs if these guys took the cut?

All you new people thinking about this opportunity don't worry about what the older agents contracts are. Some are better some are worse than the current one but if you want this then you go with what they have now. You have to realize that unless you didn't make very much in your old career you WILL have a lifestyle change. You have to get back to the bare minimiums in life and scratch and maybe eat mac and cheese 3 or 4 nights a week to make it. Get rid of all your personal debt. Down grade your autos,down grade your home. Do what you can to go into this with as little needed personal expenses you can manage. If your spouse works cut back to the point that they can cover your living expenses and if possible some of your business expenses also.

All being said in this long post ... I'm very excited about this opportunity and have thought about it for over 10 years just never did it. I hope my perspective may help someone in their lifes decisions.

Thanks to all and good luck to all the old, new, and perspective agents of State Farm!

 

[fastrack1]

Excellent, well-thought out post that provides at least a realistic look at SF vs. the competitors. I have posted before here that I get tired of all the SF bashing. Sure, you go into debt, but in what business do you not? SF is not the welfare system.

I wish you the best as you start out. I'm sure you will do well.

 

[xrac]

Excellent, well-thought out post that provides at least a realistic look at SF vs. the competitors. I have posted before here that I get tired of all the SF bashing. Sure, you go into debt, but in what business do you not? SF is not the welfare system. I wish you the best as you start out. I'm sure you will do well.

At least Newly Approved seems to be going in with his eyes open. It seems that many recent SF agents haven't done that!

 

[ponylover]

I ran into all of the above and more as a Captive Farmers Agent. I looked at the Allstate process and it is the same. It is really difficult to make a living with any of these programs for the first 5 years. At that point your renewals are paying your expenses, but you still have to hustle the financial and life to make a good living.

I hit all my numbers, won the plaques and awards and even then decided it was too long a road to travel. I was never told the whole truth and a lot of things were brushed over or not mentioned at all. They have tightened the programs so much it is nearly impossible to make it.

The most useless person in the Farmers organization? The District Manager.

Can not agree with you more. I am leaving Farmers, it sadden me that I wasted two years.
My ex DM also has a mortgage company and a title company all under the same roof....

 

[fastrack1]

Ponylover, are you on the right forum???

 

[fastrack1]

Fastrack - spoken like someone who got a gift-wrapped book - say whatever you want, but you will NEVER be able to say you built it yourself, EVER. For you, State Farm is a welfare system - they GAVE you a book. If that were the case with me, I wouldn't be "bashing" them either.
Newly Approved - It's amazing how much you know - without ever having been an agent. Thanks for the valuable input!
...and XRAC, if that comment was a pointed one, just know that the scratch agents have to have their eyes open much wider - see, we don't have that whole guaranteed-don't-have-to-work-for-it book to rely on - we're actually running a business, not inheriting one.

Are you for real? You're the moron who started scratch. You actually think you're better at running a business because you were dumb enough to start scratch while the rest of us got a book? I would never have become an agent if I didn't get a book because it would have been retarded to do so. Sounds like I made a better business decision than you

Sounds like your just a big case of sour grapes. Mad because you did something stupid and mad at the rest of us that "got the gift-wrapped book".

State Farm isn't the one that made the mistake or is in the wrong. You're the *** that went along with the program. They didn't force you to start scratch. Scratch has ALWAYS been difficult, regardless of the contract. I'm glad they DIDN'T waste a good book of business on you.

 

[fastrack1]

You are both out of line.

Fastrack, you didn't make a better decision by waiting for a book, you just had your head up the correct person's ass or had the same last name as someone important. That's the only thing you did to earn your book and it has served you well and I take nothing from it. You were better informed then us.

Again, spoken after making many wrong assumptions. You know nothing about me. I earned an agency and an assignment after 6 years of stellar production of working for an agent as a team member. I have no other relatives that work for State Farm. I have no other ties to State Farm. I did not brown-nose anyone to get the job. I was chosen because I could sell and had a track record of selling.

There are plenty of people who have gotten agencies because of their last name or their political proweness. However, I'm not one of them and so at least you know my background when I voice my opinion to some of these new guys who are crying about everything. Scratch agencies have been around for a long time. If you start scratch uninformed, it is your own stupid fault. None of these guys on this forum take any responsibility. They are all the best of the best, the greatest business people, yadda, yadda, yadda. Give me a break. Quit your crying and go work elsewhere.

Life isn't easy for any of us. I had to borrow $6,000 just this month to make payroll and meet my business obligations and I've been an agent for 7 years. But unlike the rest of you, I have a plan and a strategy that will make me very successful in the long run and will make me alot of money. If you're strategy won't do that, I'd suggest you get another job.
- - - - - - - - - - - - - - - - - -

You are both out of line.


The problem is it is all lies and deception. None of it is true, it is fabricated so they get a bigger bonus. People from "outside the family" like I are brought in to build a scratch book in hopes that we fail, get so annoyed with leadership, or go broke so it can go to another nephew or claims secretary that deserves a chance.

Do you really believe that? You really think that they invest all that money into you so that you can fail and then they can give your business (which according to you is pretty worthless because you aren't making crap) to a nephew or claims secretary. That is just stupid. Sure, a nephew might get a good assignment to start with, but you aren't part of some grand conspiracy theory to give your agency to someone else. Don't flatter yourself. State Farm doesn't make any money by you going out of business. While the model might be flawed (which I agree it is, but seems to be getting better) they (State Farm in general) certainly want you to succeed. Now if you have pissed off an AFE, maybe they want to run you out of town, but that is a different issue.
- - - - - - - - - - - - - - - - - -

You are both out of line.

It happened to me and it sounds like it happened to Greenboy.

It's Greenman. I don't want him getting offended.

 

[fastrack1]

2 quotes that say it all


I'll take that "moron" heading emoticonboy hurled at me if I'm borrowing sixlarge a month in my seventh year - um, kettle - you're black! Crap, you got a book, ran it for seven years and can't make payroll? Um kettle......

My point was that those of us with a book don't simply have it made. We experience the ups and downs of business like everyone else. Obviously I don't borrow six grand every month and it has nothing to do with how the business has been run for seven years. It's just been a bad month. I've made six figures since day one DUE TO PRODUCTION, not assignment.
- - - - - - - - - - - - - - - - - -

2 quotes that say it all
"Quit your crying and go work elsewhere"
"I'd suggest you get another job."
"Work" and "job" - is how people who are given books and who come out of operations see agency. It's a business opportunity, it's your life, it's what you do - it's not a job, it's not "work" - maybe that's why those who haven't built the thing themselves just don't get it - and there's no way to explain it to them.
hehehe - touched some nerves (are emoticons like "hissy fits"?), I

Again, read my earlier posts as well. I did not come out of operations. I spent 6 years selling for an agent to EARN my opportunity to be given a book. Since that time I have built my business up in the same manner that a scratch agent has. Just because you're not scratch doesn't mean you're not building a business. That is such an illogical argument. What about all the other people who buy pre-established businesses and then continue to build them. Are they not building something either.

PS. I actually like the emoticons and never considered them "hissy fits" I will stop using them as you seem to misconstrue that as well.
- - - - - - - - - - - - - - - - - -

Bottom line - they gave you something you didnt earn - spin it however you want.

That really is a stupid statement. That was the program. Work hard and get the opportunity to get a book of business. Just because you didn't get that doesn't make you special. I earned my opportunity just like you did. Nothing was given to me that I didn't earn and I'm quite proud of my agency. Sounds like you are as well.

I wish you the best of luck and I guess we will never agree. Still, I wish you a Merry Christmas as well and trust 2009 will bring you much success. (whoops, I just told you I wouldn't do that anymore)

 

[Sailor]

Newly,

At least you are going in eyes wide open. My problem with current management is that they STILL are misrepresenting the income projections to new prospects.

Hard work, is a given. Lying about the opportunity so you look good to your VPA is not ethical. This is where I have a problem.

The opp, is still good in some areas of the country. But you could make much more, own your book, and have much less risk being Indy.

The local Ticas are working their asses off. If they had put that same effort into selling health as an Indy, they would be laughing not worrying about their debt.

 

[fastrack1]

I love anonymous boards..."I made six figures without income from my book!" No wait, seven, seven figures!" "I mean, eight, yeah, that's it, eight figures, I gave away that chump change from my book!" "no wait, I 4521ed the whole thing to a buddy of mine!"

Too funny.

I don't follow......I guess you know what you are trying to say.
- - - - - - - - - - - - - - - - - -

Judging from your comments and your seeming sense of entitlement, I'm thinking you are fairly lucky to have been in it for seven years, because I don't think employeeagents like you could make it in today's environment.

I guarantee what you and I do on a daily basis is the same. I also have no sense of entitlement. Aren't you reading my other posts? Our difference is that I got a book and you didn't.
- - - - - - - - - - - - - - - - - -

And then you follow the name calling with making light of the scratch opportunity and the people who pursue it. Scratch agents built this company - period, end of discussion and scratch agents are the ones responsible for getting back the market share we've lost, in part, because of complacent employeeagents.

My hat is off to all scratch agents. However, the ones I know don't gripe consistently on insurance boards about the opportunity. That is my point. You made the choice, so if you made a bad choice, it is ultimately your fault.

I agree that the newer agents (including myself and certainly not just scratch agents) are the ones that will bring this company back. I personally don't mind the complacent older agents, many who were NOT employee agents (but rather started scratch) because they EARNED the right, just like I'm trying to do if I so choose.
- - - - - - - - - - - - - - - - - -

Spin and call names all you like

I just call it like I see it. Sure I could be wrong about you, as you are about me. I'll give you that. And seriously, I hope you really do well and make it through the issues with State Farm. Maybe someday we can put faces with the names, but I don't plan on doing that on a public forum. I'd hate for some of this to come back and bite me if they ever ask me to become the president of the company.........

Merry CHRISTmas to everybody.