Should I Go Out on My Own?

[always be closing]

First time poster but been reading the forum and love the feedback.

My situation is that I work an IA and have done so for 3 years. I am licensed in P&C and L&H. I have done well throughout this time, but have come to the realization that I will be capped on what I can make.

I have an opportunity to open my own agency. I was in the mortgage business for several years prior to insurance, and my former company wants to start an insurance company. They have 40 loan officers that would be able to feed me home/auto business. I currently have a good network of mortgage brokers that regularly send me business already. They would provide the space, supplies, operating costs, etc. They would also pay me a good salary to get things going. I do not currently have a non-compete so that would not be an issue.

I have a couple of concerns:

-My credit is less than perfect. Will that affect me getting E&O insurance or a surety bond?

-What agency management system will be best?

-There are 3 other owners, from the mortgage company, and we would all have 25% ownership. Is that fair? I am bringing no capital or book of business to the table.

Just wanted to get feedback. Thanks!

 

[xrac]

Go for it but make sure everything is in writing and that you do not have a none compete if you walk away. Make sure you have a written agreement and a procedure for disolution of the business.

 

[vrracr]

I've seen many producers take leap after a short period of time and venture out on their own to be able to increase their income. some succeed, but many also fail. the reason why is because they don't quite understand what all it takes to run an agency. there is a lot more involved than just sales so sometimes the newly formed entrepreneurs get bogged down with paperwork and managing other things, not to mention much higher expenses, taking them away from what they do best (sales). getting appointed with carriers is amongst the most annoying tasks in a new agency.

since you have prior entrepreneurship experience and some partners willing to come on, i say go for it.

like the prior response stated, be sure to have a good understanding with your partners in writing. everyone's roles should be clearly defined. in terms of percentages, it's up to you, but just make sure there is some kind of balance via workload, capital injections, sales, responsibilities, etc.

less than perfect credit will probably not be an issue in terms of E&O coverage. it won't be an issue with most insurance companies with whom you seek an appointment either.

in terms of an agency management system, there are several options. go to google and type in "insurance agency management system" and you will see all that is available to you in the first 3 or 4 pages. a system is something you don't want to skim out on. spend the money to get a good system which will help you run your business, not take more time out of your day.

best wishes to you in your venture!

 

[Focus LTC]

The title of the thread is "Should I go out on my own?"

Its not really "on your own" if you have 3 other partners and have to give them 75% of your profits. Looks to me like you're spinning wheels and you'll be "capped" at what you can earn there too.

It appears that all you'll be contributing are your sales skills and your time and you'll be giving 75% of it away.

In short, here is what I think of the "Opportunity"

SLAVERY

 

[Brantley]

The title of the thread is "Should I go out on my own?"

Its not really "on your own" if you have 3 other partners and have to give them 75% of your profits. Looks to me like you're spinning wheels and you'll be "capped" at what you can earn there too.

It appears that all you'll be contributing are your sales skills and your time and you'll be giving 75% of it away.

In short, here is what I think of the "Opportunity"

SLAVERY

I agree 100% with this statement.

If you decide to pursue this further, be very clear in your agreement who owns the customers and under no circumstance would I sign a non-compete or non-solicitation agreement. By not signing you will assure that they stay honest with you because they have some risk. You always, always, always...did I say always?? Have to make sure that both sides of this sort of agreement have something to lose if either of you decides to screw the other.

I speak from experience by the way.

 

[always be closing]

Thanks for all the responses. I really appreciate the feedback and want to answer some of the replys.

-Technically no I am not "out on my own" if I have 3 other partners. However, I need them as I don't have any money to bring to the table. These will be my clients and book of business.

-Eventhing will be in writing to a T. Shareholders agreement, buyout clauses, etc. They are giving me control to run the business how I want, b/c they don't have the insurance knowledge I have. What they do have is the ability to assist me with the books and provide support through CSR's when it becomes necessary.

-I am confused why Focus LTC considered this move "Slavery". That is where I am now I feel. Busting my but and not able to get ahead. Did I misinterpret your point?

-As far as contracts I have the health, life, ltc contracts lined out without issue. I have the main P&C company that I wanted lined out as well.

Thank you for your feedback. I am excited about the opportunity, but don't want my excitement to turn into a poor decision in the long run.

 

[1manshow]

The title of the thread is "Should I go out on my own?"

Its not really "on your own" if you have 3 other partners and have to give them 75% of your profits. Looks to me like you're spinning wheels and you'll be "capped" at what you can earn there too.

It appears that all you'll be contributing are your sales skills and your time and you'll be giving 75% of it away.

In short, here is what I think of the "Opportunity"

SLAVERY​

I disagree 100%

Giving away 75% of what ? You wouldn't have jackshit to give away if you were stuck generating your own leads compared to having the gravy train of all those leads handed to you every day.

Here's a suggestion...go start a scratch agency without 40 loan officers sending you hot or warm leads and give this opportunity to someone else.... then see who's making more $$ with less stress in 5 years or so.

 

[FL P&C Broker]

Isn't there a limit on the percentage of ownership somebody can gave if they are not licensed?