Agency Owner’s, Question?

[Apex0177]

I’m in the process of negotiating my compensation package for 2009 and I don’t think my agency’s first proposal is very fair. I’m looking to see what other agency owners out there think would be a FAIR compensation package?

Additional Info:

- I work out of my house
- The agency covers travel expenses they have been running between $12,000 and $14,000 per year
- They provide benefits, Life Health, DI and I’m in an ESOP plan.
- They don’t cover any utilities, internet, office furniture, ect.
- I have support staff that does my marketing and apps.
- I write all of my business in the trucking industry

My current book of business is $1,500,000 in premium and $220,000 in agency revenue.

Please let me know what you think would be a FAIR comp package. Thank You

 

[saieddie]

$10/hr and all the spam you can eat.

 

[Apex0177]

Since I’m in sales I’m working 24 hours a day 7 days a week so that’s what 8,760 hours @ $10 per hour $87,600 per year. Since I’m writing about $125,000 in new business each year and I don’t like spam, I’m going to have to pass.

Any real advice out there?

 

[The Rabbi]

Good advice is always difficult to find. I'll try.

You say their offer isn't fair so counter-offer with what you think is fair and negotiate. You better have some good evidence to prove your offer.

 

[Apex0177]

I came from the stock broker world where got 40-50% of revenue generated depending on the size of your book and had plenty of support. I thought that was fair. With the offer I currently have 30% on new business and 20% on renewal, I can’t help but think A) this isn’t very fair. I’m giving up an additional 10% on renewals and with audits and so forth I’m spending more time on renewals than new business. B) Why not just go independent?

 

[saieddie]

If the only thing you have to pay for is the stuff in your house - 50% new business, 40% renewal seems to be the going rate. If you work 365/24hrs a day, they should also pay for your cocaine.

 

[Deep South Broker]

You seem to be a very valuable employee. I think you are in the driver's seat, much like a client who has been hit by an at fault, insured driver.

I presently pay people in your posistion a salary based on what you do. For example, if you do all the work, ie filing, renewal processing, etc and bear the sales expense as well, I would pay what ever you wanted in a draw salary and split the agency profits at the 50% level.

For example, I would pay you $ 10.00 and hour for a 40 hour work week, if you wanted to make say $ 1250.00 a week, I would call $ 400.00 a week salary and $ 850.00 a week draw. $ 400.00 for teh clerical and a direct expense, $ 850.00 would go against your share of the agency profit.

for example $ 220,000 revenue, $ 26,400 a month, expenses would run around 10 to 15 a month leaving 11,400 profit you would draw around $ 2500.00 leaving you a net monthly bonus/profit in the 2700.00 a month.

We would pay your rent and otehr expenses out of teh reneue. With a book like this you would be a very valuable assett and we would work out a package that would carry you into retirement and or disablity. Instead of insruance, I would rather see you on a permanent renewal compensation that would exisist as long as your business was renewing.