Working at an Agency & Owning an Agency at the same time

[g717]

Just wanting to know if anyone has tried to do something like this before?

Here are a few reasons on why I am considering this:
1. Currently I have to split my commissions with the current agency I work at
- I get %70 NB and %0 renewal but $1750 monthly guaranteed for servicing another agents book
- I sell around 12 policies per month not trying to solicit any business because I barley have time to quote people coming in the door and have a book of at least $500,000
2. I don't get ANY profit sharing, trip incentives or bonus gift cards for issuing policies
- I don't really care about those if I will at least be able to get %100
3. If stuff hits the fan at the agency I am currently at, I want to be able to just roll my book over very easy and not have to worry begging someone else to take over my book and take an even bigger split than I already am.
3b. I would be able to roll any policies or books from agents in the office I work at in a worst case scenario where everyone gets "fired"
4. In my current situation I'm on pace to make $60K working my butt of where I could not do anything and make $50K off of my book.
5. Overall I want to be able to have more control over everything most importantly commissions which I have a good feeling are consistently incorrect.
6. I work 30 hours a week for someone else right now (yes there are benefits) but I started this trying to have my own business at the end of the day.
7. The moment someone in our office quits I would get a major workload put ontop of what I currently do and have even less time to sell and grow.

Is this even something that is possible? I would probably start off with hiring someone licensed or getting someone licensed to be the CSR/Main producer on the chance I can't be a producer in both agencies. I want to join some type of network to gain access to major carriers in the Midwest where I can start growing again and get %100 of what I sell.

If you have seen this done before or have seen I would appreciate any advice. Any suggestions on networks that give %100 commission?

 

[Travis Price]

I would personally pass.

1) I don’t know if you do or not, but anyone working for me would have a No Compete clause.

2) Even if you don’t, there will definitely be some Ill-will when your boss realizes you’re taking money out of his pocket twice. Once as a competitor and once as an employee.

3) Think about doing an H&L product that is not available now to your agency. Work out some deal where you can prospect current customers.

Otherwise, hard pass.

 

[g717]

Thanks for the advice Travis! We don't have a non compete in place because I'm working as a CSR for a producer in the office %75 of the time. But the agreement is that ALL of MY clients are MINE no questions asked. The way I see this right now is I could make about $50K from my own book and work for myself OR work 40+ hours a week for someone else and make $60K. Maybe I'm looking at this wrong.

 

[Travis Price]

I mean, if it’s your book, do you. I don’t know your setup, but my understanding is most P&C agents work under the Primary Agent, who really owns the book.

For me, it’s about being ethical. Not to imply you aren’t. I’m simply stating that if you are working for an agency, taking a salary, you have a moral responsibility to not undercut them.

I’m a part time agent. I’m building a book slowly and have a full time job. I work in a sector that I could take some liberty to get free leads, but it would be a HUGE conflict of interest. So I completely separate my full time job and insurance business.

 

[BADTROUT]

@g717 there are several things you are talking about here that you should be aware of before doing anything that may jeopardize your current position.

1. I own an agency, employ producers, I founded and started an agency network, and I have been in the business 20 years.
2. I am reading what @Travis Price is saying and he is giving you good advice.

Ok now that that's out of the way...


1. Servicing a book should be salary IMO but 70% is cool, the zero renewal is bad for a producer, but expected typically for a CSR.
2. Typical for a support position on the contingency, unspeakably bad on the gift card promotions.
3. If stuff hits the fan at the agency you are at, realize you don't have a book. Those policies stay with the code, period.
3b. Not a good choice for a million reasons. Now if the agency is abandoned (ive seen it twice) Go get em!
4. In your current situation, you are limited on incentive which has you seeking. It won't get better.
5. If you want to control, you need your own agency, or to find a favorable contract working for a good agency.
6. You are amongst many who started exactly the way you are now. Chalk it up to an education which is invaluable if you ever aspire for more.
7. Again, the current situation you are in will never result in you having a book of business to call your own.

Now I know I sound harsh... but it's reality and I will take the time to explain why. The carriers you use are developed over many years. In P&C you don't just start selling, you need access to carriers. The overhead to maintain a desk for you, your salary, the E&O don't come cheap and its all fueled by the business you process, but it's being facilitated by someone else's YEARS of effort so they will likely not let it ride easily if you start to poach.

Is it possible? Yes but you cannot serve two masters unless its a totally different product as @Travis Price suggested.

Hiring someone else to get you started, as long as you weren't sending the current agencies business that way is a possible solution, but difficult to imagine working for long.

Now that the doom and gloom is over... There are some GREAT networks out there but I will tell you there is no such thing as the 100% without a tradeoff somewhere. Sometimes 90% is better than 100% i.e. My 90% of 15% beats your 100% of 10% so I would pay less attention to the percent, and more to the culture of the organization... The question you need to ask is how confidently you can transition from business walking in the door and being handed to you, versus having to go cultivate it organically on your own.

This is where most in your position fail, unfortunately... roughly 85% never get out of the first year or two... You need guidance, you need a plan, you'll need carriers, and once you hit that threshold where you cant service and sell, you'll need to hire good help. It's always easier to work for you, but rest assured you'll never work for a more demanding boss. Here is a guide of questions to ask when considering a network...
-------------------------------------------------------------------

First, you have made a GREAT decision to go independent! Being at a captive agency works well for some, but if you made it this far, you are at least curious how the "other ones" do on the indy side of things. There's a great deal more freedom, but it doesn't come without a share of burdens as well. This is big business and a lot of hard work is in your future if you plan on being successful. Being a part of an agency network can be a great way to ease some of those bumps and bruises you are sure to get when starting your own independent agency, but bear in mind... There is no magic bullet to make it all come easy. No network will ever be able to sell your policies for you, you need skills, luck, and a great partner. That said, let's get past all the doom and gloom and get to it! Here are just a few of the factors to consider and questions you absolutely need to ask when interviewing a potential agency network/cluster/aggregator partner.

1. Do you have a good carrier mix across the lines of business I want to use in my agency?
2. Are those carriers competitive in my region?
3. Do you have any production requirements?
4. Do you provide an agency management system?
5. Do you provide a comparative rater(s)?
6. Do you have a non-compete or non-solicitation if I decide your network isn't for me? If so... why?
7. Do you have any exit fees?
8. Can I sell my agency at some point?
9. If I sell my agency, do you take a cut?
10. HOW do I access the carriers... do I submit everything to you, or do I get DIRECT access to the carrier?
11. How long is my contract for, and do I get ownership right away, or over time?
12. What are the startup fees and are you willing to work with me if I need to make payments?
13. What is the commission rate?
14. What share do I get of the contingency bonuses (If any)?
15. What is the criteria to participation the contingency bonuses (if applicable)?
16. Do you offer guidance and training during the startup phase of my agency and a spirit of mentorship throughout the relationship?
17. Are you open to me contacting some of your member agencies before I sign the contract?
18. May I have an attorney, or third-party consultant review my contract with me?
19. How much industry experience does your network leadership have?
20. I think the MOST important thing someone can do other than reading the contracts of many networks is speak to the owner/CEO/president of each network to get a feel for the culture. Let's face it, some people you like the minute you meet them, and then there are others that make your skin crawl...

One thing to note... This is just as much an interview of you to be a good fit for a prospective agency network. No network wants to be the quick unthought-through decision and asking these questions will strengthen the relationship with your chosen group. There are subtle nuances each network option will bring to the table and each will stress some areas over others. At the end of these questions though as you are reviewing each of them carefully, I hope you find your answer far more clear than when you started.

If you find this helpful, do me a favor and remember where you got it and drop me a line to tell me what you ended up deciding and how you are doing! Good luck on your adventure! -Trout

 

[adjusterjack]

But the agreement is that ALL of MY clients are MINE no questions asked.

Do you have that in writing?

Seems to me that your employer could terminate your employment in a heartbeat if he doesn't like you working elsewhere.

Then you would scramble trying to keep your customers.

Do you plan to tell your employer that you want to, or will, do this?

 

[g717]

Wow very insightful reply @BADTROUT . I will make sure to think very hard about this.

@adjusterjack I actually just looked at my "simple contract" and noticed it doesn't say anything about my clients being MY clients. I know that was not done on purpose but I will get that changed!

I don't plan on POACHING my own client list here unless I was fired or the agency broke apart. I would start fresh with that project with NO clients. Then as some come in I would simply issue under MY new Agency versus the current one I work at!

 

[Travis Price]

Wow very insightful reply @BADTROUT . I will make sure to think very hard about this.

@adjusterjack I actually just looked at my "simple contract" and noticed it doesn't say anything about my clients being MY clients. I know that was not done on purpose but I will get that changed!

I don't plan on POACHING my own client list here unless I was fired or the agency broke apart. I would start fresh with that project with NO clients. Then as some come in I would simply issue under MY new Agency versus the current one I work at!

I think you’re missing the point. Your reputation is going to take a hit and ultimately, that’s all you got in this business; and that’s the least bad thing that can happen to you. Your current employer and everyone in your town will stop trusting you.

How about this. Go to your current employer and pitch the idea. That’ll give you all the info you need.

It looks like you’ve made a decision, God Speed.

 

[BADTROUT]

Wow very insightful reply @BADTROUT . I will make sure to think very hard about this.

@adjusterjack I actually just looked at my "simple contract" and noticed it doesn't say anything about my clients being MY clients. I know that was not done on purpose but I will get that changed!

I don't plan on POACHING my own client list here unless I was fired or the agency broke apart. I would start fresh with that project with NO clients. Then as some come in I would simply issue under MY new Agency versus the current one I work at!

I just want to be clear on one thing... well first off, thank you for acknowledging my post, I appreciate the ones that actually read them, as opposed to the know it alls poising for failure... That said, reading my posts do not guarantee success, that secret sauce is all in YOUR efforts.

I think what everyone is saying, and what I want to be very clear on... using an analogy its like a marriage. You are married to your current job, It's best to get divorced before you start dating again, even if you have that special someone in mind...

Who all coveteth, oft he loseth all

A dog with a bone walking across the bridge over the water looks down into the pool and sees his own reflection... He sees himself of course but in his haste believes it to be another dog... much smaller but also with a bone he would like to have. He barks at this other dog, with the hopes of scaring it off and keeping both bones to himself... He loses both, and walks home hungry.

No funneling, no poaching, no waiting for an agency to implode etc... get set up, get ready to bounce, do your research and learning. Walk into the boss and tell him your intention with the full notion of leaving on the spot. You never know, and offer you can't refuse may come along. In all liklihood, he will be less than enthusiastic and wish you all the best in his not so Christian words but you will gain respect from him and others. Then write your first policy, and grow from there.

Remember 8 out of 10 people that attempt to do what you are about to do, fail, and hard. Those that are left are here giving you the best advice we can! So, learn up, quit that horrible job, work your tail raw, win...

 

[Dreamiekid]

@g717 there are several things you are talking about here that you should be aware of before doing anything that may jeopardize your current position.

1. I own an agency, employ producers, I founded and started an agency network, and I have been in the business 20 years.
2. I am reading what @Travis Price is saying and he is giving you good advice.

Ok now that that's out of the way...


1. Servicing a book should be salary IMO but 70% is cool, the zero renewal is bad for a producer, but expected typically for a CSR.
2. Typical for a support position on the contingency, unspeakably bad on the gift card promotions.
3. If stuff hits the fan at the agency you are at, realize you don't have a book. Those policies stay with the code, period.
3b. Not a good choice for a million reasons. Now if the agency is abandoned (ive seen it twice) Go get em!
4. In your current situation, you are limited on incentive which has you seeking. It won't get better.
5. If you want to control, you need your own agency, or to find a favorable contract working for a good agency.
6. You are amongst many who started exactly the way you are now. Chalk it up to an education which is invaluable if you ever aspire for more.
7. Again, the current situation you are in will never result in you having a book of business to call your own.

Now I know I sound harsh... but it's reality and I will take the time to explain why. The carriers you use are developed over many years. In P&C you don't just start selling, you need access to carriers. The overhead to maintain a desk for you, your salary, the E&O don't come cheap and its all fueled by the business you process, but it's being facilitated by someone else's YEARS of effort so they will likely not let it ride easily if you start to poach.

Is it possible? Yes but you cannot serve two masters unless its a totally different product as @Travis Price suggested.

Hiring someone else to get you started, as long as you weren't sending the current agencies business that way is a possible solution, but difficult to imagine working for long.

Now that the doom and gloom is over... There are some GREAT networks out there but I will tell you there is no such thing as the 100% without a tradeoff somewhere. Sometimes 90% is better than 100% i.e. My 90% of 15% beats your 100% of 10% so I would pay less attention to the percent, and more to the culture of the organization... The question you need to ask is how confidently you can transition from business walking in the door and being handed to you, versus having to go cultivate it organically on your own.

This is where most in your position fail, unfortunately... roughly 85% never get out of the first year or two... You need guidance, you need a plan, you'll need carriers, and once you hit that threshold where you cant service and sell, you'll need to hire good help. It's always easier to work for you, but rest assured you'll never work for a more demanding boss. Here is a guide of questions to ask when considering a network...
-------------------------------------------------------------------

First, you have made a GREAT decision to go independent! Being at a captive agency works well for some, but if you made it this far, you are at least curious how the "other ones" do on the indy side of things. There's a great deal more freedom, but it doesn't come without a share of burdens as well. This is big business and a lot of hard work is in your future if you plan on being successful. Being a part of an agency network can be a great way to ease some of those bumps and bruises you are sure to get when starting your own independent agency, but bear in mind... There is no magic bullet to make it all come easy. No network will ever be able to sell your policies for you, you need skills, luck, and a great partner. That said, let's get past all the doom and gloom and get to it! Here are just a few of the factors to consider and questions you absolutely need to ask when interviewing a potential agency network/cluster/aggregator partner.

1. Do you have a good carrier mix across the lines of business I want to use in my agency?
2. Are those carriers competitive in my region?
3. Do you have any production requirements?
4. Do you provide an agency management system?
5. Do you provide a comparative rater(s)?
6. Do you have a non-compete or non-solicitation if I decide your network isn't for me? If so... why?
7. Do you have any exit fees?
8. Can I sell my agency at some point?
9. If I sell my agency, do you take a cut?
10. HOW do I access the carriers... do I submit everything to you, or do I get DIRECT access to the carrier?
11. How long is my contract for, and do I get ownership right away, or over time?
12. What are the startup fees and are you willing to work with me if I need to make payments?
13. What is the commission rate?
14. What share do I get of the contingency bonuses (If any)?
15. What is the criteria to participation the contingency bonuses (if applicable)?
16. Do you offer guidance and training during the startup phase of my agency and a spirit of mentorship throughout the relationship?
17. Are you open to me contacting some of your member agencies before I sign the contract?
18. May I have an attorney, or third-party consultant review my contract with me?
19. How much industry experience does your network leadership have?
20. I think the MOST important thing someone can do other than reading the contracts of many networks is speak to the owner/CEO/president of each network to get a feel for the culture. Let's face it, some people you like the minute you meet them, and then there are others that make your skin crawl...

One thing to note... This is just as much an interview of you to be a good fit for a prospective agency network. No network wants to be the quick unthought-through decision and asking these questions will strengthen the relationship with your chosen group. There are subtle nuances each network option will bring to the table and each will stress some areas over others. At the end of these questions though as you are reviewing each of them carefully, I hope you find your answer far more clear than when you started.

If you find this helpful, do me a favor and remember where you got it and drop me a line to tell me what you ended up deciding and how you are doing! Good luck on your adventure! -Trout

Ever thought of writing a book? I honestly like your straight forward honest opinion.