Hello! This is my first post here in this forum and I wanted to start by saying it's great to be able to read all of your comments and opinions. I've already learned quit a bit from you all.
My friend and I are seriously considering starting a P&C agency together. She currently is working under an agent for AllState and I currently work for the #3 Auto insurance agency in the U.S. as an agent over the phone only. I have a 20-44 personal lines license and she has a 220.
My question is, what do you think about starting your first agency with a partner? Good? Bad? Indifferent?
Also, we are considering purchasing another agent's book and permission to use their name as compared to starting up by ourselves. I'd like to hear some of your opinions on this as well.
Work out all the details in advance and have all the paper work reviewed by YOUR attorney. Get a good accountant to help in setting up the agency, tracking expenses, etc.
Make sure you know how to equitably split the business if/when you decide to go your separate ways.
Have a FUNDED buy-sell with life & disability.
Constantly watch your backside. My last partnership cost me almost $1M when it blew up. I don't care to ever go thru that again.
I don't care how well you get along now - inevitably one person will view themselves as doing more work or bringing more business into the agency then the other. Then you have:
*Partnership grows for years and each person is making $5,000 a week. One partner decides to get into Llama farming, quits yet still wants their $5,000 a week income. In the meantime the other partner now has to do 100% of the work for half the pay?
*Partnership grows for years and the goals start to grow apart. One wants to dig in and continue growing the business, working 50 hours weeks, the other is happy with their $180,000 a year income, just wants to coast and take 6 vacations a year.
Nothing goes sideways immediately as the fun and excitement of starting a business have your attention. Believe it or not, things start going bad after the business is built. Then, things that weren't remotely as issue at first are now huge issues.
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Hello! This is my first post here in this forum and I wanted to start by saying it's great to be able to read all of your comments and opinions. I've already learned quit a bit from you all.
My friend and I are seriously considering starting a P&C agency together. She currently is working under an agent for AllState and I currently work for the #3 Auto insurance agency in the U.S. as an agent over the phone only. I have a 20-44 personal lines license and she has a 220.
My question is, what do you think about starting your first agency with a partner? Good? Bad? Indifferent?
Also, we are considering purchasing another agent's book and permission to use their name as compared to starting up by ourselves. I'd like to hear some of your opinions on this as well.
Thanks in advance for your responses!
It would be better to have two individuals working from the same office selling non-competing products and sharing office expenses. One could be life and health and the other property and causualty.
If you are going to be partners, I would want to own at least 51%. You do NOT want equal partners.
Thanks for the responses. As far as the business going bad after it's built, we both (right now) want this to be a starting point, eventually branching off into our own individual work. I was already kind of thinking what you all have stated. I also feel I should try this with a partner first, before jumping in by myself. Maybe taht's just me doubting myself.
What do you all feel about acquiring a book of business as opposed to starting out brand new with no book?
It would be better to have two individuals working from the same office selling non-competing products and sharing office expenses. One could be life and health and the other property and causualty.
If you are going to be partners, I would want to own at least 51%. You do NOT want equal partners.
Look, no one plans on getting divorced yet the rate is 50% - so obviously unplanned things happen. 75% of all small business are out of business within the 1st five years so the odds are not stacked in your favor.
Look, no one plans on getting divorced yet the rate is 50% - so obviously unplanned things happen. 75% of all small business are out of business within the 1st five years so the odds are not stacked in your favor.
Buy a book of business. It'll get you a great starting point. Then you can build off of it. Read, Power Position Your Agency by Tony Korsgaden. It comes with plenty of scripts for cross selling and such.
Yes if you own 51% you will always have control. You can overrule every decision if you need to. And it still holds true if you have 3-partners together. You need 51% regardless. If they own 25% each and you own 50% and they both vote one way and you vote another...you are stuck.
Buy a book of business. It'll get you a great starting point. Then you can build off of it. Read, Power Position Your Agency by Tony Korsgaden. It comes with plenty of scripts for cross selling and such.
What are the pricing factors for a book of business? Is there a multiplier?
How would one find a book of biz to buy? Are there business brokers who specialize in selling insurance practices, like there are for medical practices?
Oops.. I knew it wasn't Tony. It's good stuff, it talks a lot about internal and external marketing and hiring a Customer Contact Rep. Which works a lot like a dentist appointment secretary/telemarketer. It talks a lot about replacing yourself with other people. Example, Issues with auto go to the Auto CSR, Homeowners renters condo etc go to the Fire Expert, life goes to life expert, ect. It's a great map, imho.
Starting Agency with a Partner?
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