Questions for P & C Principals

[blue_wynd]

What is the ratio of commission to expenses with and with out a 1099 producer excluding rent and salary based employees?


Another question is after utilities, office supplies, E & O, marketing, etc. how much of the $100 is left before or after tax if you are a one man shop?

Looking to open my own agency and trying to figure expense to net income ratio for p & c only agency.

 

[Enosis]

What is your policy mix?

 

[Bertolinoins]

That is hard to answer without knowing your volume and expenses. I have a spreadsheet that breaks down producer expense. It is always higher than producers think it is. I know I underestimated the overhead involved in running an agency.

 

[djs]

No real answer to the question.
First year, probably first 2, you will spend more than you make, so the expenses will exceed income. This is largely caused by the marketing budget after the first 6 months, but you have to do it.

A better way to look at this is what are your fixed expenses, what are your variable expenses (such as producer commission) and where is your breakeven point each month.

Is that achievable? How many months out? Will you business plan support it taking 6 months longer to hit breakeven? If not, be very careful.

Dan

 

[blue_wynd]

No real answer to the question.
First year, probably first 2, you will spend more than you make, so the expenses will exceed income. This is largely caused by the marketing budget after the first 6 months, but you have to do it.

A better way to look at this is what are your fixed expenses, what are your variable expenses (such as producer commission) and where is your breakeven point each month.

Is that achievable? How many months out? Will you business plan support it taking 6 months longer to hit breakeven? If not, be very careful.

Dan

I am actually drafting up my business plan, hence my question on the expense to income ratio. I am trying to figure out how many policies I have to sell to break even. I guess a more prudent question is to ask if some people can be so kind as to email or tell me their fixed operating expenses involved in an agency. I can budget the rest to fit my case. Eg rent, utlilities. My email is [email protected]
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What is your policy mix?

I am life licensed, but for this scenario lets say P & C only: 80 PL, 20 CL. Out of the PL 65 Auto, 25 Home, 10 Renters.

 

[nyc2phi]

I think the LivePlan program you are using has taxes calculated into the charts. You can actually change the percentage yourself based on your area or projected income. Its still not going to be 100% accurate and neither are your projections, thats why it is a plan.

 

[greatfish]

You could try this spreadsheet.

http://bp.reaganconsulting.com/2012_Comparison_Workbook_v1.xls

 

[insurancemansam]

You don't need a business plan. Just work your tail off.

 

[blue_wynd]

You could try this spreadsheet.

http://bp.reaganconsulting.com/2012_Comparison_Workbook_v1.xls

Thanks....................

 

[billyg]

You don't need a business plan. Just work your tail off.

Surefire way to fail.