Sorry, should have been clearer, I know State Farm assigns policies, but from what I understood, not necessarily a full book of an existing agent.
Once, when I talked with them, they described as more of 'enough policies to cover the office rent and staff', not in terms of taking over for an existing agent. Not my area of expertise though....
Also, 2700 policies should be bringing in more than 1.2M. This would be an average ANNUAL premium of $444. Either there are a lot of cars with only liability coverage or something seems off a bit here. okay, I don't know anything about VA rates, but I doubt they are significantly lower than CA rates.
Only reason I mention this is when you try to do the math. Beating a dead horse, I don't know how State Farm works, but some general things come to play. For 2700 policies, you'll need 2 full time CSR's just to maintain. When you look at 2 x $30K = $60K, then add in the various office expenses, which mount up quick, plus things like E&O, you are probably pretty close to break even using your income numbers.
Now, in truth, that is a fantastic opportunity, to break even on the office and staff from day 1, and to have a book to work. I'd jump at that. But at those numbers, you should be making a bit better return. 2700 policies should be bringing in well over $200K in revenue. Don't lose any sleep over this, it is just something I would either ask about or wonder about.
I am pretty sure this was not the whole book of this agent but I am not sure. I am not far into the process but I will know more in a couple of weeks. Basically the way the AFO Mgr explained it, the existing business would cover the overhead, which is basically what you are saying.
Ok so here is the my situation guys i hope you can help. I am a college student 20 years old graduating next march/apr. Recently I have been going on various interviews to see where my career lies. I do not have kids nor a wife. Single and living at home looking for doors to open up. I think going the insurance route will be good for me to start out. Recently I went to a state farm interview and talked to an agent that was going to hire me.
He loved how enthusiastic I was and said I can really do good. Now, he then said I would have to take the P&C, life and health insurance licensing for my state(New Jersey by the way). He said that State Farm pays for it if working full time. So i gave him my availability which is tues thurs fri sat fully flexible. That causes me to not be full time because i have class on Monday including a night class and on Wednesday I get out at 1 or 2:30. So he told me to search schools that would let me do it at the evenings from 6 to 10. I received a call from him the next day giving me a proposition and have me think about it. His proposition was he would bring me in part time paying like12/hr and hire someone full time instead because he really needs someone.
He believes by hiring me part time I can get my feet wet and learn what to do when the time comes. Then he said that by April I have to be licensed and he will let his full time person go and I will take her spot he will let her go because he doesn't think she can grow with the company and although she is licensed she doesn't have half of the potential that i have but in order to do this i will have to be licensed.
Now here is the dilemma the class cost 450 dollars for the P&C if i do the life and health insurance it will be $650 all together. I am a college student and do not have that money to fork out because he can't pay for it because I will be part time not full time. He said if i do pass when he brings me on full time I will be reimbursed. My question to all of you out there that have experience is it worth it? Also I see the P&C life and health licensing as a credential to add to my resume and if my career doesn't work out at state farm I can go elsewhere and be highly marketable in the financial/insurance industries. Is this a good idea will it build my resume and help me for future jobs? I am trying to get my foot in somewhere and he said to me that full time pays 28-30k a year and that is ok for me for someone who doesn't have experience in the real world/corporate field. I am very persuasive and persistent and believe that I have what it takes to make money. Is this something I should do or not and what would be a good idea? Thanks
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Bump Any ideas anyone??
Last edited by insurancerook : 01-30-2009 at 09:12 PM.
Reason: Posts merged
O ok now i really understand i was confused that i would be an actual "AGENT" thats why i was a little skeptical on people saying you go in 75k to 100k in debt due to offices expenses payroll etc... So now i know what i should do i mean i defenitely dont have that kind of money to shell out but its good to know that it is essential to my career in the future. I will give him my decesion on tues and i am still baffled on what exactly i should say. Any more ideas/opinions out there??? I highly would appreciate it.
I agree go ahead and get licensed. Tell him you would like him to reimburse you once you make such and such sales numbers as either part time or full time. Learn as much as you can and sell as much as you can. If you are bringing him good business then as time goes on you can ask for more commission as you become more valuable. After a couple a years apply to work for the company as an Agency Field Specialist. Then after a couple of years there start the process of getting an agency in your late 20's early 30's.
If you are bringing in a lot a premium and not getting paid well you don't have to just go work for another company. Just go to another State Farm Agent. Keep track of your sales so you can show what you are bringing in. If you get some experience and he is not paying well and you are cold up there in the far north send me a post to come work in my Agency in Atlanta.
O.K. I have read every single post in this forum and now I have a dilemma. I have been offered a job at SF and will be heading to their training in a few months. My wife and I have our house paid for, no expenses and over $30,000 in the bank. My wife works and makes enough for us to survive on even if I do not make a penny for the next two or three years. My question to all of you is this. Is it worth it in the long run. I make around $65,000 a year now but I really hate my job. I do not work in the Insurance business and this will all be new to me. I am young and willing to do whatever it takes to succeed. Will SF give me a fair opportunity to make this happen? Will I be happy I made this decision in 10 years. Please give me honest whole hearted advice. I only have a few months to decide if I should stay at my current job or explore the opportunity that SF has to offer. Thank You All!!
Does anyone know what the changes for the new contract are? From these blogs it seems that if you were hired in 04-05, you had no chance at all. Has SF changed the contract enough to help new hires stay in business? If someone knows what these changes are please share them with me. Thank You all!
O.K. I have read every single post in this forum and now I have a dilemma. I have been offered a job at SF and will be heading to their training in a few months. My wife and I have our house paid for, no expenses and over $30,000 in the bank. My wife works and makes enough for us to survive on even if I do not make a penny for the next two or three years. My question to all of you is this. Is it worth it in the long run. I make around $65,000 a year now but I really hate my job. I do not work in the Insurance business and this will all be new to me. I am young and willing to do whatever it takes to succeed. Will SF give me a fair opportunity to make this happen? Will I be happy I made this decision in 10 years. Please give me honest whole hearted advice. I only have a few months to decide if I should stay at my current job or explore the opportunity that SF has to offer. Thank You All!!
Hi guys, I just spent the last hour or so reading through this tread and appreciate all the candid advice. I realized this isn't an advice column, but I'd like to throw my situation out there as well. Thanks in advance for any help.
By my own humble admission, I consider myself a pretty employable candidate for most financial sector positions. I'm 26, got my MBA, military career, single, etc... I was contacted today by a recruiter for SF. Now admittedly, I fell into the trap that it sounds like others have done, in that, the sales pitch sounds too good to be true.Well , maybe it is, maybe it isn't, but I've decided to go in a different career path, but I wanted some clarification from something that the recruiter said: the 9 month period while I'm getting licensed and trained and what-not, SF is said to offer a "competitive salary". She went on to say that it wasn't her job to negotiate this salary, but said that they usually match what was on last years W-2 in an attempt to remain "comfortable". She also went on to say that she thinks SF can offer a pro-rated rate of up to $150k. This was staggering to me.
Well, I was in Iraq for most of last year and drew a 6-figure income. SO--my question is this: 1) is there any truth to this level of compensation 2) considering that SF pays for the licenses, what stops me from studying for 9months (while drawing this salary) passing all the tests, and then just quiting? Do you have to sign any long-term commitments? Couldn't ajfh1477 negotiate a pro-rated 9 month $65k salary?
I realize this isn't the most noble idea, but honestly I left the Army and I'm a little burnt out and want to take some time off-- if I could get paid Iraq money to study in the States then I'd have to consider it. Again, sorry so long and thanks for the input.
I know nothing specific about the State Farm contracts, but I can assure you they ain't no dummies. There have to be some hitches in the contract that if you don't complete the program, you don't benefit.
Also, you work for State Farm during the time you are studying. It's not like you get to do an hour or 2 of study and the rest of the day (or week) off. It will be different than what you are used to though...
Couldn't ajfh1477 negotiate a pro-rated 9 month $65k salary?
I realize this isn't the most noble idea, but honestly I left the Army and I'm a little burnt out and want to take some time off-- if I could get paid Iraq money to study in the States then I'd have to consider it.
I guess you didn't gain any common sense when you got your MBA.
Do you really think that they are this stupid?
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[COLOR=blue]Don't steal - the government hates competition.[/COLOR]
One more question: when do most of these 'official' financial obligations come into play? I get the pressure for office space, furniture, employees, etc....but when do you actually have to put your signature down on paper? Day 1 of training? Assuming you hit all the training numbers, when can you start earning on your own.
Sorry my answer is vague but in short, I say you won't be able to avoid any commitments for more then 30-45 days.
I actually didn't think your answer was that vague. What you said was they want you to hit the ground quickly, running at full speed. Beware of speed bumps along the way.
You also added the normal caveat that 'objects in managements mirror (you) may become closer than suggested (to get bonus).'
This can be applied to virtually every P&C agency out there. Even independent P&C agents either do this on their own, or they sink pretty quickly.
You start up any business, you end up having a lease and employees before the doors are open to pay the bills. Not that much different.
I want to thank everyone for their comments, both positive and negative. Like any business venture there are definitely risks involved.
I have also gone through what they call the Agency Career Understanding Seminar and for the most part the comments on this forum are pretty accurate. The pitch I got was that we should all start out as New Market Agents as this was the best way under the current program to make the most amount of money. I asked about taking over a book of business and they said it was either not available or something that we could do, but we wouldn't make as much money. After reading the posts here it seems that if given the opportunity the consensus would be to start with a book of business. I'm not sure what the short term financial considerations are, but it would seem that you give up some of the early year bonuses. Obviously, besides the book, you can become an agent after the first year, so no one to tell you how to run your business after the initial period.
I also have been speaking with Allstate and they seem to have a much easier process, however they told me they don't pay for certification, or pay you while you're in training. They encouraged buying a book of business, but to stay under $1.2M so that you can take advantage of all the "Scratch" programs. In downstate NY, Allstate no longer sells home policies so I don't know if that is causing them to lose business or not.
Anyway, I am leaning towards SF and am working on my business plan, which quite honestly seems more like telling them what they want to hear from what I read on this forum.
I would love to hear from anyone new to SF, less than two years and if possible in NY or the northeast to hear what your experience has been.
Poor guy in my office bldg is a SF independent, As you know (Repub In Name Only) Charlie Crist pretty much forced SF out of FL. The poor SF guy is screwed now.
Greetings all! I am another approved candidate and am about to start posting for openings on the state farm site.
A question came up recently in my interview process that I do not know. I would like to know specifically what it takes to accomplish the following...
1. Top 100 new agent... what does it take?
2. Maximize scorecard bonus... perhaps 25-40k in
scorecard bonus. what exactly does that take?
3. Travel at level 1 and Level 2... what does it take?
I would like to know so that I can adjust my business plan and so that I can know going in what I need to do.
I really appreciate all of the good comments on this thread. I almost drank the glass of "take a new market opportunity," and was ready to throw up after reading some of the real-world results from the agents that chose that path. I really give you guys (or gals) much credit for going this route and continuing despite the rough years. I am sure that you are on a plan and are working toward making that plan a reality. Keep up the good work.
I'm sorry if this comes across the wrong way, but I've read every post, posted some questions myself and read every response. I find that there are a lot of negative, even shocking comments like "run, run, run or prepare to go broke". An opportunity with State Farm is either a good business or not. I used to think there was a good mix of positive and negative comments, but when I re-read all the posts the comments are definitely more negative. Maybe it's true and being/starting/owning a State Farm agency is a bad decision, but I would like to hear from someone who can provide some quantitative data either way. I just received a comment from SFTICA "Spend money on Marketing and Staff and finance your ass off!" I don't mean to pick on anyone, but for someone that is considering State Farm as a career, what should I read into that comment? I understand that I have to spend money on marketing and staff. Whether I will have to "finance my ass off" really depends on the degree I want to over extend myself.
If everyone posting is really losing money working for State Farm or they're such a lousy organization to work for, then why continue? I have to believe there is a way to make money being a SF agent otherwise there would be empty SF offices everywhere.
Are there people out there that can provide an unbiased or at least try to provide an unbiased business case for why one would want to be or not be a SF agent?
Last 4 TICA agents in my area have gone in debt over 100k. Three have been fired. In my area about half survive. The training program and contract I went through is much better. One out of twelve did not make it.
It could be that there is a reason for the negativity.
I appreciate the feedback and trust me I'm not whining about this decision. As someone who has owned his own business and been successful in sales, I do not need someone else to make a decision for me, let alone a SF forum. However, as a business person with no background in THIS industry and very few outlets to get honest answers, I would be remiss if I didn't try to find as much information about this business as possible.
At the end of the day I will make my decision to either pursue this or not, but if I did that in a vacuum, then I AM going to fail. I am just looking to be as well informed as possible. I don't like too many surprises and after reading this board, I think I have a pretty good idea of what to expect.
I appreciate everyone's input, especially Greenman.
Re: Becoming a State Farm Agent
Re: Becoming a State Farm Agent
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