Success Stories- Building an Independent Agency

[infoe]

For most folks, this is the better choice.

I'd like to get to the point where, my wife is the principal of a secondary agency location, under our parent or corporation. It's always been her goal to have an agency, and it's my goal to have some space during the day time.

Working together in an agency for the last two years for the most part has been rewarding and brought us closer. Very little talk of work at home. However It would definately be nice that the company is doing well an expanding to at least two locations with staff that are both profitable.

 

[iiinycboi]

infoe, i too have the same goals but i want more than 5 branch locations eventually but working hard toward it. Bertolinoins's success story has been an inspiration to me.

 

[Bertolinoins]

infoe, i too have the same goals but i want more than 5 branch locations eventually but working hard toward it. Bertolinoins's success story has been an inspiration to me.

My advice is to focus more on revenue than branch offices. In an ideal world I would like to have one main office with a ton of revenue. I have some remote producers and we use part time offices with Regus executive suites for them as needed but for the most part... we try to keep our overhead as low as possible and that includes all of our service people being based in Sacramento and not in more expensive areas. A good Account manager/CSR in Sacramento or Fresno is paid 40-50% less than in SF or LA. Office leases are about the same. I don't mind having my producers where the money is but I want most of my operation located under one roof in a lower cost area.

 

[iiinycboi]

good point! overhead low revenue high and remote producers. It's a tough market here though, the pricing is so competitive its scary.

I feel people are starting to change broker fees to compensate.

 

[infoe]

My advice is to focus more on revenue than branch offices. In an ideal world I would like to have one main office with a ton of revenue. I have some remote producers and we use part time offices with Regus executive suites for them as needed but for the most part... we try to keep our overhead as low as possible and that includes all of our service people being based in Sacramento and not in more expensive areas. A good Account manager/CSR in Sacramento or Fresno is paid 40-50% less than in SF or LA. Office leases are about the same. I don't mind having my producers where the money is but I want most of my operation located under one roof in a lower cost area.

I agree, however, have you considered the contracted satellite agent? (think farmers or is it nationwide? Brightway, Brooke) They are an agent in their own right...pay their own expenses and hire their own producers, are on a commission split, gain your markets and commission split to have CSR's do the service from the home office? Home agency is owner of book, but have a vesting schedule and or a buyout clause.

This is what everyone wanted to do with me on my return home. Brightway, and a smaller local agency.

Of course some; like myself will want to go completely independant, but as you know not all will have the resources, desire or ambition to go completely scratch and start brand new.

I know this is no where even near in my horizon, but at your capacity I would assume you could already handle this if it be in your interest?

This is what I think of when I think different offices or branches (expansion) Of course I may come to find out in a few years, there are better ways to expand (like Joe's current method that he works very wel,l with sunsetter agents) or that it's not as easy to find good quality satellite agents

 

[Bertolinoins]

I feel like most satillite agents are not worth the trouble. Not all... but most. I think in the big picture you want an asset you can sell for maximum value and a big group of guys loosely connected doing their own thing does not provide a lot of value for the agency owner when he eventually wants to sell. If you run a large agency with rounded out personal and small commercial accounts with standard markets that are tied to the agency and not individual producers... you get the maximum value. If you live by the hot producer or "program" then you will die along with them.

 

[brnblkly]

This is a great thread. I an currently captive and looking at the opportunity to start and independent agency from scratch. Looking at joining a cluster. Do you think it is best to focus mainly on commercial in the first year and try to work in P&C during the evenings and weekends, or is it reasonable to focus on P&C?

 

[infoe]

This is a great thread. I an currently captive and looking at the opportunity to start and independent agency from scratch. Looking at joining a cluster. Do you think it is best to focus mainly on commercial in the first year and try to work in P&C during the evenings and weekends, or is it reasonable to focus on P&C?

commercial is p&c brother, but I'm assuming you're referring to commercial and personal lines. To be honest when I first open I'm going mad hatter guns blazing approach and try to quote everyone. Joining SIAA and essentially being new to the indy market and new to these carrier's it will take a while till I know what I'm truly competitive at. You want to specialize but I think specialization out the gate, can be very tough..especially if you don't know what to focus on.

so general p&c agency at the beginning and then narrow your focus with experience and time
that's my .02 cents

 

[Scottyj]

We started in 1995 in Sacramento and have always remained in one office until the last year, rather then expanding externally all our growth has remained internal on the books. We have a good foot in the Cali, Oregon, and Nevada contractors market.
As far as remote offices as of recent we have an agent in San Diego and now another in SLC Utah... that being me.

I think what it comes down to is if its a remote office or sattelite office you need to make sure you know the agents well and require reports. My brother and his partner check in with me frequently and require reports and we are seeing great success in our remote office, now its nothing amazing currently because we are still figuring the Utah market out but it is steady with continuous growth and we plan to make this Utah office full fledged apart from our Sac office in the next 3 years.

By the way bert are you a member of the IBA Sacramento ?

 

[brnblkly]

commercial is p&c brother, but I'm assuming you're referring to commercial and personal lines. To be honest when I first open I'm going mad hatter guns blazing approach and try to quote everyone. Joining SIAA and essentially being new to the indy market and new to these carrier's it will take a while till I know what I'm truly competitive at. You want to specialize but I think specialization out the gate, can be very tough..especially if you don't know what to focus on.

so general p&c agency at the beginning and then narrow your focus with experience and time
that's my .02 cents

Yes, sorry, I meant commercial and personal lines.