My wife has been working for a SF agent for the past 8 years and has recently began the process to become an agent herself. It seemed like a great opportunity at first, but the more I research it, the less promising it looks.
I have a great job in another industry with a 6-figure income and some money saved up, so we have the funding and won't need to take on any debt (I think). I plan to help her 10-20 hours a week as she establishes her business and I keep my full-time job. If we proceed, she will be taking over a $4 MM BOB. It is not yet clear whether she would keep it all or it would be pared down to about $1.5 MM as I've seen stated on other threads.
This is my main concern at this point:
1) I've seen a lot of threads stating that with a captive agency, new agents quickly get into debt "up to their eyeballs". In my case, I fear losing $100K+ of our own savings instead of the debt, but it's the same principle. I don't fully understand how this could happen. I would think that worst case scenario, she would break even and make $0 net profit in the first year and grow from there. Can someone please explain to me how debt is quickly accumulated after taking over a significant book of business?
P.S. I know every thread on this site talks about how much better Independent is than Captive, and I'm convinced that's probably true. Maybe that's a choice we will seriously consider in 5-10 years, but I'd like to keep that off the table for this particular thread please.
I have a great job in another industry with a 6-figure income and some money saved up, so we have the funding and won't need to take on any debt (I think). I plan to help her 10-20 hours a week as she establishes her business and I keep my full-time job. If we proceed, she will be taking over a $4 MM BOB. It is not yet clear whether she would keep it all or it would be pared down to about $1.5 MM as I've seen stated on other threads.
This is my main concern at this point:
1) I've seen a lot of threads stating that with a captive agency, new agents quickly get into debt "up to their eyeballs". In my case, I fear losing $100K+ of our own savings instead of the debt, but it's the same principle. I don't fully understand how this could happen. I would think that worst case scenario, she would break even and make $0 net profit in the first year and grow from there. Can someone please explain to me how debt is quickly accumulated after taking over a significant book of business?
P.S. I know every thread on this site talks about how much better Independent is than Captive, and I'm convinced that's probably true. Maybe that's a choice we will seriously consider in 5-10 years, but I'd like to keep that off the table for this particular thread please.