$45,000 in taxes! Tica, you have me a bit worried on that. Is your state insanely high on taxes? I'm wondering, did you take all the business deductions available to you? I'm not calling your business savy into question, however, with a whopper of a number like that I just want to make sure that I'm not missing something here. I would like to avoid any surprises come tax day.
I'm not exactly certain what taxes you included in there, however, I am assuming them to be the usual - Payroll Taxes (i.e., FICA, Unemployment Insurance, and Workers Compensation Insurance), and self employment taxes. My estimate of taxes on my payroll (where my payroll is very similar to yours by the way) is approximately $8,500. My estimate on self-employment taxes on an income of about $55,000 (using the "top 100" production numbers that my market makes you put into your plan) is just a bit over $9,000. Many if not all of the other expenditures in my plan should be deductions as business expenses. Now you have local, state, and federal income taxes on top of that, however, just going from my own numbers it doesn't seem that those taxes should cost over $27,000 on a $55,000 salary (which is where it would need to be to get me up to around $45,000). Some commercial leases may require you to pay a part of the building owners taxes. Are you including something like that in your figures?
You are forgetting quite a few taxes, like employment taxes on his employees, and other business taxes. Such as excise, gross receipts, and franchise taxes. However, $45,000 does seem high for only $180,000 in revenue. I'm wondering if perhaps some of the taxes were figured wrong, perhaps they were done on the premium, and not the commission revenue to the agency?
You are forgetting quite a few taxes, like employment taxes on his employees, and other business taxes. Such as excise, gross receipts, and franchise taxes. However, $45,000 does seem high for only $180,000 in revenue. I'm wondering if perhaps some of the taxes were figured wrong, perhaps they were done on the premium, and not the commission revenue to the agency?
Some of these taxes won't likely apply here. If I'm not mistaken, franchise taxes only apply to corporations and not sole proprietorships (which most SF agencies are). Additionally, "employee taxes" are the same as "payroll taxes." Also, Gross receipt taxes vary by State with some States not even having them (Even then these are typically not exceptionally high taxes and shouldn't have skyrocketed TICA's taxes to $45,000). In any event, I am very curious what taxes TICA had to pay that brought his tax burden to $45,000.
I assume he rolled a few things in there that don't belong in that category, but then his rent and utilities was lower than I would expect... it all works out.
In the end, you would have to cut back on advertising, slim the staff, and grow the business to make a decent living. Nothing new here, it takes a lot to get a P&C agency off the ground.
My adjusted gross income was $53,000. I owed about $9,000 in taxes. Since I had already paid in $7,000, I owed about $2,000. My CPA is fantastic – thanks for your concern.
I wrote that post quickly yesterday in an effort to answer any questions. The $45,000 was 25% of the 180,000. 25% income tax seemed about right. What country do you live in?
TICA,
Again, I'm not questioning your response here as much as just trying to figure it out for myself. And trust that I am not a Kool Aid drinker, which is why I'm trying to make heads and tails of it all now before I'm fully committed. If you say your CPA said that was your taxes were $45,000 than I don't deny that. It just seems to me that that the full $180,000 is not really "income" as such that would be taxable under "income tax." That the business expenses (i.e., payroll, office, supplies, etc.) should be deductions offset against your income. Then again, maybe the "income" tax and the "business" taxes all meshed together to come to a total of 25% so perhaps its just a matter of semantics. In any event, thank you for the information. It definitely is something to consider.
Hi, I am new to this forum. I had an Internship with an AFO this past summer and it was a really great experience. I got the opportunity to see the dynamics of various agencies and how the agents run their business. I also got the opportunity to work at three different agencies assisting the staff by cold calling, getting information for quotes, etc.
This is my last year of college and I am still looking as to what career path to pick. I got hired part-time at an agency after my internship and I am thinking of working for as a staff member at an agency in Chicago so that I can get experience on how to run an office, get my feet wet, and become prepared for Agency.
I was wondering what you guys think about this? I was thinking of working at an agency for perhaps 2 years and then go into agency when I feel I am ready. I had been really excited about this idea until I began reading posts of others and their experience about Agency. Are the new contracts friendly to Ticas? What are the percentages of Ticas failing? If your an agent or Tica would you do this again? What would you do different?
I guess if you can't make it on 2000 autos, I will never make it. I am aScratch agent have 900 in my book I grew 100% myself without any assignments. Here is the deal. Payroll and Taxes $60K, Rent $12K, Marketing $5K, $2K office supplies, SF withholding for benefits, mail, fees,necho $14k. Basically, nothing left after commissions. Hitting PB if you are lucky that Underwriting issues, still nets no more than 10K/mo.
I think I am throwing in the towel. I see no benefit to staying. I am throwing good money in to get business for State Farm and haven't paid myself more than $30K in a year and that is with over $100K in debt financing this "deal". State Farm is genius. They figured out how to grow their business for free. I can't believe I was a sucker! I will have nothing.
Have you finished your first year yet? If not, then you should at least grab your 12k and then bail for sure. It sucks I know.
Isn't there 22 pages of information on this thread that already answer those questions?
- - - - - - - - - - - - - - - - - -
Is there a single TICA on this forum that is doing good? I don't recall seeing a single positive experience posted here. Either the program is 100% crap or the TICA's that are doing good are not here. Speak up if you are making a living as a TICA.
Last edited by fastrack1 : 10-14-2009 at 09:39 PM.
Reason: Posts merged
Every TICA I know is either quiting once they get off of premium builder or is barely making ends meet. The only ones whom are doing okay had assigments of 3+ million and they are upset about what they were dragged into. I would not reccommend this gig to anyone. I am at a point where I am going to stick with. Unfortunately I have had to cut all advertising and I am down to one staff person now. I predict another 5 years working it now but it is going to take a good 5 more years of myself and one staff person to get out of the financial hole.
The opportunity is one of the worst in the insurance industry but only in regards to money you make. Otherwise I have no complaints about the company as a whole. Don't let them fool you by showing you inflated illustrations of compensation and having you interview AA97 agents.
Diligence 101 before buying into any franchise is talking to existing owners. Before I plopped down one red cent I'd want to visit around 10 other SF's and find someone who doesn't mind giving me some real scoop.
Anyone who bought in just by looking at company projections; shame on you.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
Diligence 101 before buying into any franchise is talking to existing owners. Before I plopped down one red cent I'd want to visit around 10 other SF's and find someone who doesn't mind giving me some real scoop.
Anyone who bought in just by looking at company projections; shame on you.
Healthagent,
Easy with the rude and condescending "shame on you" comment. Perhaps, you are smarter than all the new State Farm Agents that are struggling, but I doubt it. The people that make it through State Farm's Career Track are amongst the best and brightest. The challenge is that the deal is not what it used to be and by the time you figure it out. It's too late.
I met with at least 50 State Farm Agents over a four year period before I became an Agent and it didn't help. You need to speak with 10 new Agents (on your own - not just the ones Leadership sends you to visit), which is a much harder task. TICAs and Agents on the AA05 contract are much harder to find.
The people that enter the State Farm Career Track are among the best and the brightest and nobody ever signed up simply by looking at company projections.
You could meet with 16,000 of the 17,000 State Farm Agents and it wouldn’t help. The key is to speak with new Agents and TICAs who are on the AA05 contract. I spent four years researching the opportunity and met with over fifty State Farm Agents. It didn’t help! You need to speak with new Agents who are on the AA05 contract. The last two contracts are terrible and you will not make any money. TICAs should beware of the $emi-Monthly Variable Compensation and never ask the DAFO for help!
Todd
Post Script: This is a great website when constructive criticism is offered, but rude and condescending post(s) do not help the cause.
Last edited by Nazz Utopia : 10-15-2009 at 11:37 PM.
Sadly, I am in my 3rd year. Decided not to travel so I could keep PB...I didn't get the 12K because I started 3 months to early to get the "catch up money". However, 12K wouldn't make a bit of difference. If you are in your 1st year, get out now while you can still financially recover. I was promised an assignment after my first year because Agent D was retiring. He didn't. No other agents within 5 miles retiring anytime soon. I have been the beneficiary of a whopping net 35 policies assigned and for that they reduce my PB by $950/month. Don't know how they calculate the withholding and they won't discuss it.
The people that enter the State Farm Career Track are among the best and the brightest and nobody ever signed up simply by looking at company projections.
You could meet with 16,000 of the 17,000 State Farm Agents and it wouldn’t help. The key is to speak with new Agents and TICAs who are on the AA05 contract. I spent four years researching the opportunity and met with over fifty State Farm Agents. It didn’t help! You need to speak with new Agents who are on the AA05 contract. The last two contracts are terrible and you will not make any money. TICAs should beware of the -Monthly Variable Compensation and never ask the DAFO for help!
Todd
Post Script: This is a great website when constructive criticism is offered, but rude and condescending post(s) do not help the cause.
If this is true at some point the word will get out on the street about the "SF Opportunity" and they will have a hard time recruiting agents. Then it will either be change the contract or take any warm body.
State Farm has people lined up to become Agents. It's kind of like Tom Sawyer talking the other kids into painting the fence. Those poor TICAs will pay for the chance to become Agents only they don't realize what the total cost is. It used to be a really great opportunity, but not anymore.
Is there a single TICA on this forum that is doing good? I don't recall seeing a single positive experience posted here. Either the program is 100% crap or the TICA's that are doing good are not here. Speak up if you are making a living as a TICA.
I reiterate Fastrack1's question. While I can accept that it is "not the deal they tell you it is," I find it hard to believe that NOBODY in the last 5 years (since the new contract) has made a successful go of the SF Agency program. So where is the exception that proves the rule? If there is a TICA or an ICA that started on the new contract and is making it work could you please let the rest of us know. Thanks.
Define doing good? I know TICAs that were in the Top 100 which is doing good according to the DAFO. Guess what - they were not making a dime - not one cent! All the money goes back into buying more business. It is not the way to build a healthy book (retention or quality). Ask Leadership who the top new Agents are in your area and go speak with them. They will tell you how great State Farm is and what a wonderful opportunity it is. Before you leave their office ask them how much money they are making.
I know of a TICA who writes 1,200 apps a year. He has high school kids that work for him in the evenings setting appointments on the phone. He pays them minimum wage and they are making more money than him.
In my area, the rates are not competitive. My former Field Development Agent told me on Friday that his lapse / can is 33% on Autos. The HO rates are so high it is causing him to loose cars. He has been an Agent for six years and qualified for travel last year. Him and his wife were in Hawaii without enough money to eat. Seriously, they went to the grocery store to buy food. He has over $100,000 in debt due to State Farm and is considering bankruptcy. The AFO loves him because he traveled. Define doing good?
Check out the National Association of State Farm Agents website and read the TICA forum
I reiterate Fastrack1's question. While I can accept that it is "not the deal they tell you it is," I find it hard to believe that NOBODY in the last 5 years (since the new contract) has made a successful go of the SF Agency program. So where is the exception that proves the rule? If there is a TICA or an ICA that started on the new contract and is making it work could you please let the rest of us know. Thanks.
there are PLENTY of TICA'S in the past 5 years that have made it work both traditional and the people that even made it work after going scratch. MY THOUGHT however is that they are not here on this forum, because their probably too busy making things happen and busy selling.
I for one know that once my office doors open I won't be on the pc reading forums, as much as Ive learned from this board and it definitely helped me in terms of my due diligence and appreciate the knowledge it put me ahead of my peers that didn't have read/learn this information. I just wont have time... because I'll be out selling, training and trying to make moves. I'll try to come back after 5 years and visit this post and say hey, I'm one of those Tica's that made it....and by the way doing well.
OK infoe, so your going to be something the other hundreds didn't do. It's easy to talk big when you haven't even opened your door up, but you should have heeded the advice given to you by this forum brother...
You got a good attitude, a champion's attitude, but you should be aware every SF TICA had that same attitude. I'm sure you haven't forgotten about the extremely long hiring process you just went through. Do you really think every other person was a loser?
Get ready for the pain and second think every move your forced to make, especially when they say "time to put down $10K on advertising this month Infoe, use your SF credit card if you don't think you can afford it..."
OK infoe, so your going to be something the other hundreds didn't do. It's easy to talk big when you haven't even opened your door up, but you should have heeded the advice given to you by this forum brother...
You got a good attitude, a champion's attitude, but you should be aware every SF TICA had that same attitude. I'm sure you haven't forgotten about the extremely long hiring process you just went through. Do you really think every other person was a loser?
Get ready for the pain and second think every move your forced to make, especially when they say "time to put down $10K on advertising this month Infoe, use your SF credit card if you don't think you can afford it..."
yes. I'm going to do something that many have failed at and few have succeeded (04/05 tica years). Seems simple?
Nope I know its not. I'm nervous...better yet down right scared. But failure is not an option.
In my case I have the chips stacked in my favor. Taking over nice size book of business. Bi-lingual in an underserved bi-lingual market. And a proven track record in financial services sales amongst the top of my peers in a highly competitive environment.
Ok so let's see first of all....I've heeded the advice on this thread like you could not imagine. When I was in the hiring process I was on this board 24/7 fiending for a new valuable thread from someone like legion or greenboy. Trust me...key points of this thread I FULLY understand.
Second have I thought I was in a room with losers before? Well yea possibly but even when I'm in a room with winners I feel if they can do it so can I. I personally think I have a borderline cocky attitude. But hey it's gotten me to where I am today why change right? I'm actually a real good peoples person just very confident.
I like many others have everything riding on this. I'm moving states and leaving friends family fiance behind for now to make this opportunity work. I'm sure there have been people with even better chips stacked in their favor before me and have not succeeded for many reasons (dafo,money,scratch) but thanks to this board I've been blessed to fall into a nice dafo, good size book of business, and understanding of what its going to take to secure my contract. After that its do whatever it takes to run it like a real business.
If I were a betting man...I wouldn't bet against my success. See you guys in Austria.
Re: Becoming a State Farm Agent
yes. I'm going to do something that many have failed at and few have succeeded (04/05 tica years). Seems simple? 
Linear Mode
