Career Advice

[somarco]

My cloud only consists of my 401k, which is only about 150k.

That's probably not enough. It's roughly 2x your current salary (which I presume is gross, not net).

Drawing down your 401k means 10% penalty plus taxes. Could cost $3k in taxes and penalty for every $10k you take.

Even though you are making outbound sales calls that is probably for a business with name recognition and heavy advertising.

Plus you are selling tangibles.

Even if you connect with an agency such as SF you are going to have to sell YOURSELF, not the brand.

And you would be selling an intangible.

This industry is littered with folks who were under-capitalized and thought they could replace their current income in 3 - 6 months.

My first 18 years in this business was working as a carrier rep. Salary, expenses, benefits, bonus.

Made decent money the first 10 years, great money the last 8.

Then the company was sold and I had to look for something else. I was interviewing with folks 10 years younger than me and earning less than I had been before losing my job. The folks in charge of hiring wouldn't touch me. They thought I would take their job.

Ended up starting a wholesale insurance agency selling to agents. Earned my first commission check after 4 months.

It was $39.

My wife was not happy.

It took 16 months to break 5 figures per month. Another 4 to match my prior gross earnings.

I had a ready market, working with folks I had known for years. And I new the industry like a pro.

Also caught a few breaks.

If you make the change go into it with eyes wide open. Most agents will flame out in a few months. Some make it past a year. If you can hang in for 3 years you have a chance to do well.

Good luck.

One more thing.

Don't be swayed by some of the pie in the sky recruiters on this forum.

 

[marindependent]

What intrigues me about State Farm is the potential to earn income that far surpasses what I currently am making. I know that insurance is super tough your first 3 years, but would anyone else recommend the move?
Thanks

Yes there is the potential to make more money, there is also the potential to make far less, there is also the potential to make almost nothing. My experience is that its super tough for more than 3 years. I would not head from no insurance industry experience to opening your own SF operation if that is what you are considering. I would first go work for an experienced agent for 1-2 years and learn the ropes. There is a ton of useful knowledge that the insurance seminars are not going to teach you

 

[Warrior]

I agree with what another person stated that retail, customers come to you, in insurance you have to find customers. BIG DIFFERENCE.

If you never sold any insurance ever, you really should NOT get into State Farm, or Farmers or other captive companies that want you to get your own office. I was a Farmers Agent and now I'm an Independent. I was in insurance for over 25 years before I even decided to get my own office with Farmers. Like Farmers, State Farm has great training programs, but, you are kind of blind sided by the big bill it will give you and the high pressure pot you will be in to perform. You will be required to sell a certain number of policies per month. A certain number of P&C (auto and home) and a certain number of Life, a certain number of Umbrella, and Business. If you can't do it, they will be very rough on you. If you didn't do it the month you needed to, they make you play catch up the following month. It is a very shark infested waters if you are new to insurance. They also push you to get loans for your office that if you cannot produce, you're not making money to pay back the loans, or the rent on the office, or paying for your staff. They expect you to have a staff when you open your office. They make it sound so easy and profitable, but you are not profitable until about year 5. This is even if you went independent. It takes 3-5 years to really see profit from all your hard work.

Then, if you choose to leave, all those customers who you worked hard to acquire, are no longer yours. They are State Farm's. You will not have access to them for another year or so. And, State Farm has a clause that you cannot have another office a certain area from where their offices are located. As you know, State farm has offices all over the place.

I am giving you a look at the reality of being captive. I suggest that you work as a sales staff in an independent agency. Before spending the money on getting your license, see if they will help with the costs. Or, get into a captive company as one of their sales staff and get the training you need to build up your knowledge and confidence. That way, you will know if this is an industry for you. Give it 1-2 years.

I went Independent because I have over 25 years in the industry and chose it was time to have my own office. After I left Farmers, I waited that 1 year to get my clients. I never emailed them or called them in that 1 year's time. But when 12 months came by, 99% of all my clients came back to me. I offer the best customer service and other perks for my clients. I sell through 21 companies. I am able to do things that I was not allowed to do when I was captive. The only downside is building brand recognition. Farmers and State Farm has millions of dollars to push their brand. So, separating me from them, was tough, but my referrals keep coming in.

You need to learn the basics 1st. Learn to crawl before you walk. Read some books on insurance. Not self help books, but those that tell you the steps to selling insurance. You have to talk to 100 people a day to get 20 people to get a quote....those 20 might buy, but most of the time you will only see maybe 10 will. SO.......10% of people will buy. From that 10%, if you get 3-5 referrals from those, you might sell all of them, or none of them. But talking to 100 people is necessary to grow your book. I never go home from work until I have spoken to 100 people about insurance. It is a goal set that was given to me when I was green. It was the best advice because it works.

How will you get in front of 100 people a day? This is what beginning as a sales staff will teach you. Endurance and a can do attitude will take you far.

If you want to succeed, surround yourself with successful agents who are making a killing, and follow what they are doing. Eventually, you open an office and will be a firestorm against your competitors.

Just remember that being an insurance agent may sound like a luxury career, but it is work. 12-15 hour days 6 days a week until you begin to see fruits of your labor. The more you understand insurance and what it can and cannot do for customers, it will help you be the best advisor to your area. Word of mouth is gold. If you get a bad rap, it will be everywhere. If you are loved, it will grow everywhere.

I have so many steps I can train you on. But the first step for you is for you to make the best decision that is financially secure for you. You get paid monthly. If you sell 2-5 policies a day for 30 days, you wont see it until the following month. If you sell poorly, you won't get much the following month and you will have to hustle your tushy to sale more that next month to make enough money the following month...It is very hard to see this when a State Farm or Farmers blinds you with being your own agent, owning your own agency. But the reality is, out of 50 agents they hire as agency owners, only 5 succeed for 5 years. After that, those 5 drop off to about 2-3 agents.

I am giving you the truth of the business. Start out slow. Then grow. In my 25 years, I grew in knowledge and confidence. I never wanted my own office when I started out. I eventually decided that having my own office was liberating. If I had it to do over again, I would have gotten my office 10 years ago. I never knew there was an Independent way to do it. I was blinded by the glitter of captivity.

 

[Warrior]

Whatever you do, DO NOT use your 401k. If anything, take the 401k out and go to Edward Jones and invest it. NEVER USE YOUR RETIREMENT $$ FOR INVESTING IN YOUR AGENCY.

You will thank me someday....

 

[Itsjustmemario]

Again, as I stated from my opening post, I am extremely grateful for all of the responses so far. Looking back I should of put more insights in my opening post. I have a big book of customers that I could try to carry over to the insurance side of the industry as these customers know me on a first name basis. The book is approximately 500-600 people that I currently sell to and know me on a pretty respectable level. When I have been communicating with SF I have learned that most likely they will be putting me at a location that has and agent who is retiring. The staff will most likely stay(I know this could cause potential issues) and I should be walking into a well established book. I also have access to a family friend who has 35 years in the industry that said they will work with me part time to help me get up and running.

I want to advocate that I am not trying to make the situation appear easy or a way to make easy money. Over my career I have averaged about 60 hours a week working for someone else, and the idea of working for myself does truly intrigue me. I am willing to learn and put in the effort to be successful.

 

[Warrior]

Your 500-600 people who you get to buy insurance from you when you work at State Farm or any captive agency...Are no longer your 500-600 people. They now belong to the captive company. If you leave, you can never contact them in any way for a year to 2 years. I do not know what State Farm's policy on how long it is until you can contact the customers...But waiting a year to call, email, U.S. mail a person, when on the other side, State Farm is contacting all of them to let them know you are no longer an agent with them. That makes the customer feel like you failed them. I got my attorney to write a letter to my district manager to approve I send to my customers so they know what's happening. But that took a bit of convincing that I was legally allowed to say goodbye to my customers. But after that, I had to wait a year. If it took 2 years, I really don't think I could have retained all of them back. Recruiters will tell you anything because they get money for recruiting people. They care if you fail or succeed only for the 1st year. After that, you are on your own.

Please, you have zero experience in insurance sales. Those 500-600 people who love you may not once you start talking to them about insurance. They may run away fast. Then, after they are your customers or not, will their friends and family want sales calls from you? Talk to all of them now. Ask them if all of them will buy insurance from you. Make a list.

Even if you work for an Independent, you will need to make it in the contract that if you leave, your customers are yours to take with you.

You may be loved in the field your in now. RETAIL is different than Insurance.

My favorite way to gain the trust of people when I first meet them is; "I am an insurance agent and I am not even going to talk to you about insurance...isn't that amazing? A salesperson who isn't trying to sell you anything. " Then they start asking me questions about insurance. And I sell them on me. It works about 30% of the time.

Here is the truth of acquiring an agency :

• You will have a staff of how ever many.
• You will need to get your staff on board on what your goals are.
• You will have a quota to maintain and you will have your quota increase when they see your sales increase.
• You will be responsible for paying your Front Office Manager, CSR, Sales Staff, Marketer, Rent, Utilities, Phone and Internet, Insurance for the Office, E&O Insurance, Taxes, Leads, Marketing, paying off your business loan, etc.......This is about $2500-$10,000 a month depending on the size of your staff and office.
• You only get $150-$300 per sale Home and Auto. $25 for every Umbrella Policy. $300-$800 per business depending on the type of business you sell to. $100-$500 for every Term Life Policy you sell. Whole life is very few and far between because of the high cost to the customer.
• You only get paid 1x per month. So as soon as you get into the office, you will need to sell the heck out of everything. When your 600 customers who say they will buy from you dry up, then what? You need to learn to find new ones.
• All of this takes time. Learning, Learning, Learning takes time away from SALES SALES SALES.
• Expect you will be in the office for 12-15 hours a day until you see the fruits of your work. That takes about 3-5 years. Even if you take on a fully operating office.
• Did I mention all the corporate meetings, the district meetings and the daily meetings you will have with your staff? This will take up your time too.
• You will need to sell 5-10 policies a day to keep up with your overhead. It sounds easy when a recruiter says it. But in reality it's NOT.
• So, if you get $150 per Auto & Home package you sell to your 600 customers you already have, that is $90,000. Guaranteed not all of them will come to you the 1st month. So spreading it out in 12 months, that is $7500 per month, just to make it easy. If your overhead is $10k per month, you will be short and you will have to play catch up the next month. Will your hourly paid staff like to not get paid? They will quit. Taking over an existing office does not mean you get their residual income. They may have made a deal to get it with their retirement, or it will go to the company, but not you or your agency.

Please be very careful of what you are looking to do. I am your hindsight.

 

[somarco]

Over my career I have averaged about 60 hours a week working for someone else, and the idea of working for myself does truly intrigue me.

When you are captive, as you will be with SF, you are NOT working for yourself.

You are working for the carrier.

I disagree with @Warrior in one respect. There is nothing wrong with working as a captive, long enough to learn the business. Quite a few folks do that for 1 - 3 years.

Working as a captive is not a career.

 

[Markthebroker]

Again, as I stated from my opening post, I am extremely grateful for all of the responses so far. Looking back I should of put more insights in my opening post. I have a big book of customers that I could try to carry over to the insurance side of the industry as these customers know me on a first name basis. The book is approximately 500-600 people that I currently sell to and know me on a pretty respectable level. When I have been communicating with SF I have learned that most likely they will be putting me at a location that has and agent who is retiring. The staff will most likely stay(I know this could cause potential issues) and I should be walking into a well established book. I also have access to a family friend who has 35 years in the industry that said they will work with me part time to help me get up and running.

I want to advocate that I am not trying to make the situation appear easy or a way to make easy money. Over my career I have averaged about 60 hours a week working for someone else, and the idea of working for myself does truly intrigue me. I am willing to learn and put in the effort to be successful.

It's a bad idea, but it sounds like you've already made up your mind, and are just waiting for someone to agree with you.

 

[marindependent]

There is nothing wrong with working as a captive, long enough to learn the business.

I agree with this and I have given this advice many times over myself. I did it myself and it helped me significantly before I went indy.

In addition, I believe that many of your current people that you assume will come over to you, will not. Newcomers often assume a much higher close ratio than the reality.