Partnership?

[raiq]

I started an independent agency just over a year ago. Last week I was contacted by a former coworker, (I worked for a captive agent for many years) who wants to talk to me about how to become independent. I have worked my butt off the last year, contracting with carriers, marketing and running the agency....along with selling as much as I possibly can! I have not talked to this person yet, but I am considering bringing this person on as a partner.

Does anybody have a partnership? How do you run the agency? Are there any advantages? Disadvantages?

Please provide your opinions and advise, even if your experience with a partner was bad.

Thanks!!

 

[Bertolinoins]

Why would you consider bringing him on as a partner? Is he going to invest in the agency or cover half of your start up costs? Why not bring him on as a producer with vesting in his bob over a short period of time?

 

[Guest]

a producer is NOT a partner

 

[raiq]

Good point RBA! How does the Vesting work Bertolinoins?

 

[Bertolinoins]

An example would be that the new producer/future partner be vested at 20% of his book value per year over a period of 5 years. At which point he would have ownership rights over his book of business or the right to buy his book of business at a fixed amount.

 

[infoe]

Yes....please raiq unless he/she is going to dump huge equity in the business, why would you make them partner? You've done the HARDEST part of the agency...the buildup. You're a business owner my man..now it's time to act like one...don't have to screw people but you want to keep as much of the piece of the pie as you can...and hire/train people to help you grow your business.

Good luck to you.

 

[b61mack]

partnership is like a marriage, if he brings a lot to the table, and if you need some cash to help get to the next level..than a partnership works, or do as bert suggested. you know his ability and work habits. most partnerships work when both parties have different strenths, and have the same goals.

 

[xrac]

Avoid being in a partnership if at all possible.

 

[raiq]

I've decided producer is the way to go! Now, I just have to look at the numbers and decide what's a fair percentage. Thanks guys!

 

[djs]

Avoid being in a partnership if at all possible.

Ditto!!!

If you do a partnership, make sure you spell out what happens if a partner decides to leave. Do this upfront, basically the partnership agreement should be the prenuptials much more than the wedding vows!!!!

I've seen to many partnerships end ugly!