How do I know when to leave independent agency and start my own ?

figdog · 08-28-2008, 12:45 AM

heres the deal. ive just started as an agent for an independant agency in town who has contracts with many carriers for p&c and life and health. currently it is a good deal because they take care of all overhead and i have no experience. all i do is prospect and close. my split is straight 50% on commission and renewals.

Right now it works because i am barely building a book of business and couldnt afford the overhead of owning my own agency.

But at what point is it time to leave? how big of a book would i have to have to self sustain? i guess what im wondering is

1 - how good is this deal im getting? the better i get and the more money i make, obviously the less i need this person ... theyre getting 50% off my back

2 - for those here who own their own agency, how much of your gross commission/renewal goes to overhead? im trying to find that magic number. there has to be a number after which its all profit (for example ... it costs 100k to run your office, so after 100k, its all profit).

The 50/50 split works right now because she does everyting (employs staff, eo insurance, services policies), but im just wondering how much that is really worth. if i make 50k a year in renewals, i COULD be making 100k if i was on my own (or could i? would my overhead eat it up?)

Basically im wondering whats more valueable .... giving away 50% not to have a headache, or being independant and keeping all of it (including the headache of running everything).

xrac · 08-28-2008, 10:00 AM

Quote:

Originally Posted by figdog

heres the deal. ive just started as an agent for an independant agency in town who has contracts with many carriers for p&c and life and health. currently it is a good deal because they take care of all overhead and i have no experience. all i do is prospect and close. my split is straight 50% on commission and renewals.

Right now it works because i am barely building a book of business and couldnt afford the overhead of owning my own agency.

But at what point is it time to leave? how big of a book would i have to have to self sustain? i guess what im wondering is

1 - how good is this deal im getting? the better i get and the more money i make, obviously the less i need this person ... theyre getting 50% off my back

2 - for those here who own their own agency, how much of your gross commission/renewal goes to overhead? im trying to find that magic number. there has to be a number after which its all profit (for example ... it costs 100k to run your office, so after 100k, its all profit).

The 50/50 split works right now because she does everyting (employs staff, eo insurance, services policies), but im just wondering how much that is really worth. if i make 50k a year in renewals, i COULD be making 100k if i was on my own (or could i? would my overhead eat it up?)

Basically im wondering whats more valueable .... giving away 50% not to have a headache, or being independant and keeping all of it (including the headache of running everything).

It should be hard to figure out what it would cost you to set up an independent shop. Simply set down and budget out all of costs and then inflate by 25%. Then you should be able to figure out how much you have to sell to make that feasible. If you are already thinking this way there is no doubt in time that you will pull the trigger. If and when you make the move your biggest issue will be appointments with P&C companies and a release from the agency you are with now.

What happens to the business you have now when you walk away? Are your renewals vested or do you lose them? Do you have any type of non-compete? Will you have to go 6 months without writing any of the companies you are writing now because you cannot get released?

One thing you may consider doing is trying to negotiate a more equitable split if your production is good.

saieddie · 08-28-2008, 11:15 AM

Make a business plan. Leave the independent agency when you're making less than what your business plan would pay you.

ijerome · 08-30-2008, 09:35 AM

DO NOT go independent until you go back to school and learn all about punctuation, business writing, letter writing and email writing. You need to become a professional if you intend to be on your own. You are probably a fast learner so it should be easy for you to correct bad habits.

lisar1208 · 08-30-2008, 05:54 PM

What would that have to do with anything?

ijerome · 08-30-2008, 11:43 PM

If you don't think enough of yourself to email everyone as if you were a professional you will never be one. If you go on a sales call with wearing a T shirt and sandals you will not close many, if any sales. Your appearance on the net, discussion boards, and to your prospects has to create an impression that you are experienced and know your stuff. If you write using no caps, and are not aware of how you appear on the net, better to get a job then work on commission against pros. Look at he emails the pros on this discussion board use. Not sloppy, not lower case, not high school. Remember you are an unknown and can appear as a highly successful agent if you only try.

Any time you use the net get in the habit, good habits. Doesn't cost anything, just puts one to the test of how they think of themselves. Good luck. And read the little Red Book of Selling, or You Can Sell anything By Telephone or any other book on how to sell. Many years ago, before you were born, the salesmen who lasted read How to Sell The Sizzle, Not The Steak. It still applys in today's market.

indmedins · 08-31-2008, 12:24 PM

Proper grammar is very important as is speaking in a professional manner on the phone. Good point.

GreenSky · 08-31-2008, 12:55 PM

Quote:

Originally Posted by indmedins

Proper grammar is very important as is speaking in a professional manner on the phone. Good point.

yes! Its importent to right and talk good.

Rick

senior-advisor-indiana · 08-31-2008, 01:08 PM

I have had a lot of clients call me and complain about the way I speek on hear.

ramabry · 10-16-2008, 08:45 PM

Jerome,

I don't think it really matters if people use proper puncuation or not. What matters is when people say one thing and do another....sounds like one of our future presidents.

Don't call someone out and then mispell your own post. It makes you look pretty foolish. The funny thing is you probably used spell check when most proffessionals know that you NEVER trust spell check. Read your post before you talk crap.

"Look at he emails the pros on this discussion board use. Not sloppy, not lower case, not high school. Remember you are an unknown and can appear as a highly successful agent if you only try."

Look at he emails....

Who made you the teacher anyway?

seadevil · 10-17-2008, 01:18 AM

WOW! First post and already bitch slappin someone.

ramabry · 10-17-2008, 02:10 PM

First Post under this username but that is besides the point. Why shatter someones dreams by insulting them on how they write. It is a message board for crying out loud.

My apologies though....

nevets24 · 11-13-2008, 01:44 PM

Quote:

Originally Posted by seadevil

WOW! First post and already bitch slappin someone.

Laughing my butt off! Funny

mdudayev · 11-13-2008, 03:43 PM

To be Honest with you there are more GA's out there than can give you more commisions and as far you being ready you have to do a self evaluation and see if you have the following skills such as closing skills, extreme product knowledge and also good companies behind you. Almost forgot make sure you know how to market yourself alot of good agents dont have business due to the fact that they dont put their name out there.