Own small agency or Producer at larger agency?

[Porter]

I think what Sanddog is saying is you can't survive a 60% split as an agency owner.

[jmandas]

Sandgod1,

Have you heard bad things about IOA?

[sanddog1]

Porter, is what I m saying if you are a producer for BOP accounts generating under $25,000 premium you can not make any dam money. I am and agency owner and its very difficult for a producer to make any money writing small accounts. At 40% or 35 % for the producer. If you write the big stuff 50,000 minimum with full office support then YES you get rich.

[sanddog1]

Jmandas, to answer your question NO (I have not.) There are a Billion Benefit companies in the USA. This company in my opinion is just another Benefit company trying to break into California and they of come up with limited P & C carriers. Applied Underwriting has done the same marketing foot print. However they bought a general insurance carrier. IOA is mostly a good fit for insured who need those additional services.

[jctwindad]

MNDAVE, your commission split is not a bad one, but you mention a small salary for managing the agency. That does not sound right. The industry average is that an agency should be spending 5% of it's commission revenue as compensation for management. So, if your salary is less than 5% of your agency's total revenue, you are getting screwed.

[twobeacon]

Im enjoying the debate here. Sanddog, as an agency owner, you are suggesting that one of the best ways to succeed in this business is to work for a big office, with ownership in your business, and only write larger commercial accounts over $50,000? My goal is to make $200,000-$250,000 in 5-7 years.

[sanddog1]

twobeacon, no i am not really suggesting writing larage accounts, its extremely difficult to get those types of appointments, join a high end golf club and bring you're "A" game. Writing samll BOP's is good too.....What I'm telling you guys is read on. YOU need a good contract, but you had better bring something to the table.
Commission Splits:
That's horrible you can't survive, minium 50/50 and you and your broker should be equal partners. You should have a right to own your production and buy your 50% from the broker if you choose to move on. This is called retirement, This is one way you can build and become established. Brokers like me are counting on the fact that you may move to a different industry and guess who wins. This is the same foot print farmers and allstate have counted for years. Its got to be a win win
Dam I should write book