Becoming a State Farm Agent

May 14, 2008

  1. AgentZ
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    AgentZ Expert

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    Maybe things are different in CA. FYI I traveled my first two years and the regular way not the alternative way. I know several agents besides me that are close to or over $100,000 in debt. You haven't gone through it. Sure you can always say "sell more" that's the DAFO's answer to everything. I have been in the top 10% of my regular AFO every month and I am just now working to pay off the debt. You know how ? By cutting expenses to the bare bones, still working 12 hour days cutting staff in half. Working every referral and X-date and not spending a dime to do much of anything else. My spouse and I have not exchanged any gifts since I started here, now that may seem insignificant but on Christmas day to not give anything is painful. We were promised so much and very little was delivered.

    Sales are good but pay is not. You go be a TICA and put your money where your mouth is or get some better info so you will be really informed as to the truth of it all. Many of the TICA bought the furniture package they "suggested" it cost from $15,000-$23,000. Yea they supply the computers but not the ink, toner or paper. They don't even pay postage on the many things you still have to mail in. Most of the telephone numbers to the regional or corporate are not toll free.

    As for the business plans you give them an honest good plan and the tell you to try again. They want numbers that have never even been closely accomplished by any previous agent. They want you to continue to grow your P&C by 5 times the state average to maximize your compensation. Bottom line here is you can tell us all you want about what it "should or could" be like , but you are just talking the talk, go start walking and the come back and tell us !

     
    AgentZ, Jul 29, 2008
    #71
  2. xrac
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    xrac Guru

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    Wow! What and eye opener! This post is a must read for anyone considering going with SF. Thanks!
     
    xrac, Jul 29, 2008
    #72
  3. InsuranceBenefitsGroup
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    InsuranceBenefitsGroup Guru

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    Jesus Christ Superstar, this is some crazy sh*t. We don't want anyone buying the farm trying to sell the farm now do we? Like a good neighbor, give me a beer. SF just presented a 47% rate increase on homeowners in FL. Palm Beach is taking it without the KY. Granted, we do live in hurricaneland but can we just dump some big ice blocks in the Atlantic off the coast of Africa?
     
  4. magicmarker
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    magicmarker New Member

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    sba.gov will have sample plans and good tools and resources to help you design a plan. Also check out your local library and bookstores. I bought the "Dummies" Business Plan Kit. It was helpful but you need to do your market research. Look at local government sites for demographic info. AND PLAN TO SPEND HOURS AND DAYS creating your plan. Good luck.
     
  5. AgentZ
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    Okay again its not negative its reality. Some of the agents on the older contracts really don't have a clue as to how the "new deal" works Before 2004 they paid your staff & many expenses for start up now just a sign on bonus and some marketing money. You can have the best business plan in the world but its not going to keep you out of deep debt. You better make sure you can borrow or have saved up to $100,000 and your spouse can support your household for at least 5 years.

    GO TALK to some Agents that started in 2004 or just after that were NOT previously in management. The company is losing agents IMO at a record pace more than anytime in history. In months 3 (in pre-TICA and month 14 (Last month of 12 month TICA phase) they are being cut loose they are told "you didn't make it". These are people who put their entire lives at risk and are $50,000 in debt & have 2 more years or more on a lease that is $1700+/- a month.

    You want the path of all this.
    1. You are sold on being an agent for them & it looks Awesome
    2. You do it all business plans, panel interviews, site interviews etc and you are HIRED !
    3. You train & do field development & get assigned unless they think you won't make it then you are cut loose here (remember month 3)
    4. You sign your TICA and away you go. They make many "suggestions" as how to run your agency & as how to spend your $. You may be given a book ( or some are scratch & we can discuss that another time just ask) but other agents will raid it to the point some are less than 50% of what you walked in on day 1 (they will DO NOTHING to preserve the book for you) they will tell you they own the policies but see what happens when the policyholders start switching (they will do NOTHING) just tell you to "sell more."
    5. In month 11 of TICA phase after you are $30,000-$50,000 in debt you will either get your contract or be sent out.
    6. After 2 years the default rate on P&C commission is variable and MOST take a pay cut (ask them what the % is and you will not get the same answer twice , they will just ask " you are not going to be an average agent are you?") and it can be up to 1.5% REDUCTION on P&C. This could be enough to pay for one "team member" or what most real people call staff
    7. After you get the default removed and you pay is cut all you can do is cut expenses. Hopefully you have done this in time to save yourself & family from financial ruin. You are still working 12 hour days but instead of 3-4 employees you have one or two. You hope each 1st & 15 th your compensation is enough to make payroll and pay expenses. You hope your spouse still believes this is a "great opportunity" You hope you can survive another year and you hope they will wake up & pay you closer to industry average. You either tuff it out and realize its a job that pays what you could get working for someone else without all the risk and debt after 5 years, and if you work hard and can sell eventually you get out of debt and start saving for retirement because this contract provides NO retirement and you will NEVER be able to retire unless you save enough $$$.

    IS this a clear enough picture of agency with THEM, Wonder why fathers that are agents are mostly discouraging their sons and daughters from being agents? What once was one of the most sought after jobs in the industry is one that is no longer. For all intensive purposes you are an employee except you are disposable and they will send you out and plug another person in if you don't make it. When reality sets in after 3-4 years and the Grape Kool-Aid has all been drunk then you will remember, hey it wasn't like I wasn't told this would probably happen. No this is not the way it happens for all. Some get a break on a retiring agent & due to logstics get a much bigger than average book. Others go in to management which can be a good deal if you can be a robot for 3-4 years. Good luck




     
    AgentZ, Aug 1, 2008
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  6. AgentZ
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    Sorry but I didn't answer you question. There is a template for that business plan asks your friend the Agent for it. The business plan is important but mostly they want to see how well you take criticism after you submit it the first time. A lot of the things you won't have a clue about and they know that. Things like internal marketing systems, actual compensation (not that template they show most people), start up costs etc .I would call a few agents that have been around less than 2 years and they will share their plans and give suggestions. Most people stress over this with them but the content is not any more important than how you present it to them.

    A business plan is an important part of any successful business but they are not looking for a 50 page plan with charts and graphs just a clear concise plan that has the high numbers and action plans as how to get them. They will want to know how much you will spend and how much you need to sell to get there. Now you won't make (earn) what they say you will, but they don't know you know that so just plug in some high numbers and constantly talk about how important you KNOW it is for absolutely EVERYONE to have more life insurance and they will think you are just awesome. Have real life stories about how having or not having life insurance impacted people's lives and you will be 3 steps ahead of your competition.

     
    AgentZ, Aug 1, 2008
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  7. magicmarker
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    magicmarker New Member

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    AgentZ, I appreciate you shedding light on this "opportunity." At first read, I figured you were just negative but after reading more of your posts, esp. this last one, I think you are really speaking truth from experience. I have talked to a couple of agents in my state who are TICA and they still seem excited (but why would they tell me something negative - --it wouldn't look good on their behalf). They have all told me that they haven't taken a paycheck (most are coming up on one year) and that all compensation after expenses, including salary, is put back into the agency. But they also add that SF "takes care of them" sort of like, don't be concerned about finances.
    However, I have several calls into other TICA agents who won't return my call....makes me wonder.
    Because P&C and Life is what I know best (been in it for 10 years), this is what I want to do, own an agency. Have you heard anything about opportunities with other carriers? I know Farmers pays much better commish but apparently the company sucks. I'm considering American Family. Have you heard any news on this agency opportunity.
    Again, AgentZ, thanks for your insight; it's really got me thinking and I truly hope that things work out for you so you can actually share in the gift-giving with your spouse this Christmas. :yes:
    MM
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  8. AgentZ
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    My first question to them would be ?

    Are you off the 2 year default yet ? What is their P&C comp after the first 2 years compared to the 3rd and 4th ?

    Remember this contract only really got going in October 2004 and those agents were on default for 2 years. They do get 1% now more on default than those that started back then did but the bonus is different. I really have worked hard and done well as far as sales in my agency its just the compensation is not close to what they promised and I have a good book of business. WE keep hoping they will wake up, but as long as Ed is in charge We doubt it. There is still opportunity there and it a pretty much permanent career just that agents now will never make close to what agents did 15-17 years ago or even the ones on the previous contract.

    My old Boss said " watch out those BIG companies just look out for themselves these days" Boy was he ever right.

    I will ask any questions I can. Good Luck !


     
    AgentZ, Aug 1, 2008
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  9. xrac
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    Based upon observation it seems that everything in life cycles. What was once in style no longer is, the Republicans were in power and now the Democrats, and so on. As the Byrds said and the Bible says. Ecclesiastes 3:1 There is a time for everything, and a season for every activity under heaven: 2a time to be born and a time to die, a time to plant and a time to uproot, 3 a time to kill and a time to heal, a time to tear down and a time to build,

    It looks to me like the contract with SF has cycled. Based on the contract with SF prior to 2004 it seemed to be the best thing going in insurance. A coveted can't lose proposition if you could get selected. Now based upon the things I am reading it is no longer the golden opportunity it once was. If much of what I am reading is true then one should look long and hard before considering SF. Here is the bottom line. If one has experience and $50-$75,000 to invest why would they want to be anything but INDY?
     
    Last edited: Aug 5, 2008
    xrac, Aug 3, 2008
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  10. Sailor
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    To me this is the biggest thing we have lost in the last 10 yrs. Local management and agents truly were family.

    Those days are long gone. Today local management is really not relevent at all in the agents life, unless you choose to play with them and there small promotions.
     
    Sailor, Aug 5, 2008
    #80
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