Partnership Questions

[Taylyn]

I'm thinking about partnering with a former co-worker who has an independent agency. We both went out on our own and I went captive instead of independent. After taking a few years off from the financial services field, I'm ready to get back in and was planning to start my own independent agency. A discussion with her revealed that she would be open to partnering with me in order to expand her agency. I'm wondering what some of the more seasoned agents think of this option.

My thoughts are that she is more experienced in some areas than I am and I am more than she is in other areas. While I'm researching this we've discussed a simple commission split so that I can get started. Any thoughts....?

[beyert1]

When I went from captive to Independent I was going to partner with 2 other agents. We all had a number of years experience. However, as we progressed with agreement discussions things became non-productive and broke apart. Luckily we did not all go into business together. We are all still IA's and friends. We have all agreed the best thing was for us to go out on our own.

Now, you said you were in the financial end of things. If your potential partner is handling say the P&C side and you are handling the financial side then you have a partnership but are moving in different areas. Something like this can be positive, meaning your partner is handling one part and you the other. But, if you are going to be in the same areas and your partner has an established business it may be difficult for you to bring your ideas to the table.

Rule number 1 when going into a partnership, make sure everything is in writing and totally agreed upon on both sides. A handshake deal is never a good one and will always fall apart.

I was told many years ago, business partnerships have ruined many a friendship.

[yoyowordup]

A business partnership is like a marriage (except your probably spend more time with your partner than your wife). Make sure you are willing to "marry" this partner and all their good and bad for better or worse.

I have been in several partnerships and some worked out well and others were a nightmare. Make sure you understand how decisions are made within the agency. Does the partner with greater ownership make the decisions or are they decided together. What happens if you disagree? Do you know their work ethic? Do they know yours? Are you OK if she goes golfing 3 days a week and doesn't produce? Who gets the "house" business.

Lots of things to think about, but it can work well if done properly.

[Taylyn]

Thanks. I now have been presented an opportunity to buy a book (which hardly ever happens around here). I'm waiting for the specifics on the agency, but it's pretty substantial considering I have nothing right now! I'd have to work things out with it and make plans to open an extension office in my home town (the agency location is a commute I don't want to take for very long). I have some capital to invest and I really hope it works out, but if not I will probably ask my former colleague for a commission split to see if I really want to formally partner.

[Bob Lake]

What state are you in?

[Taylyn]

I'm in VA.

[robmejia]

If this person is someone whom you trust completely and is competent in handling such business, then there is no problem in venturing on such.

[Taylyn]

I've decided to go out on my own. I'll be opening an independent agency soon. I'm trying to decide which cluster/network to join...

[dm307799]

Taylyn...the best thing you can do is join your state PIA (Professional Insurance Agents) association. They have every resource for every thing (start-ups especially)...they even can grant you access to aggrigators. No aggrigator fee, no comission split. You should look into it! You really should!

[William Graham]

Taylyn,

we opened an IA after being a captive for 22 years- we elected to go with an SIAA relationship - we went with them because of stability and national carrier reach as well as a great staff with the regional SIAA Master Agency. SIAA has a few more expenses than some but it has some offsetting continguent commissions. There are a lot of options with groups or thru the BIG I affiliated programs - there is a different fit for everyone -- it was a tough decision but I found doing a Ben Franklin close on myself helped - wrote down all the positives and negatives on each option -- left the list alone for a week then sat down and wrote down in a priority fashion what was the most important factors I thought would make our IA work for me and my business partner. Then I went back to my cluster list & decided which was the best fit for what was most important. I am sure your list will be different than our list --

[joelm]

I'm thinking about partnering with a former co-worker who has an independent agency. We both went out on our own and I went captive instead of independent. After taking a few years off from the financial services field, I'm ready to get back in and was planning to start my own independent agency. A discussion with her revealed that she would be open to partnering with me in order to expand her agency. I'm wondering what some of the more seasoned agents think of this option.

My thoughts are that she is more experienced in some areas than I am and I am more than she is in other areas. While I'm researching this we've discussed a simple commission split so that I can get started. Any thoughts....?

Hi,

Was just looking in to the possibility to partner with another broker in opening a p&c office.
Can you please give me some thoughts of how it worked for you?
Also the advantages vs. disadvantages and some basic structure.

Do you know any source where I can look up more about this subject?

Thanks loads.