Hello all.
I have been in the business about 5 years now. I am with a small independent agency. I do mostly P&C but do have L&H license and do write some of that business as well. I can write group benefits business but that hasn't been my specialty and I'm not all that interested in pursuing it it. I would like to focus on the P&C side, with emphasis on personal lines. I believe I can be very succesful writing home, auto/motorcycle/boat, flood, individual health and life. If necessary I can branch out and take in some of the small business opportunities.
As the message header states, I'd like to start my own agency. My degres is in management and so I can easily handle those functions. I believe I'm a pretty good salesman so I do think as long as I do what I've been doing to this point I will make it. I have an idea of what is needed but I know I have much to learn. Lots of questions but I'd like to start by asking the forum members who are agency owners what they recommend. For example, did you start from scratch with your own money and build it up bit by bit, or take a business loan? Is there is a checklist out there that one can reference? Did you hire help right away or handle most of it by yourselves? At what point do you recommend hiring someone? Is it wise to bring on 1099's to help garner business?
I truly appreciate any time and information you can share. Thank you.
Steve M.
Want to start my own agency
Moderators: Josh, independent guy
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Young FL Agent
- Insurance Journal Fan
- Posts: 2
- Joined: Tue Aug 07, 2007 11:00 am
- Location: FL
As a quick word of advise. I went down this road myself a few years back. The best thing I can tell you is that most people (like myself) fail in these situations, because they are undercapitalized. Running the agency and getting the business is vital, but make sure that you have prepared finacially both personally and for the business.
Young Agent, I'd say that your best opportunity to succeed is to find an existing small agency, say $1 mil of total premium, that has good, preferred markets. If the owner likes you and is ready to retire, he'll sell it to you rather than one of the larger competitors as you'll be able to stay in the same location (or close by) and give the service necessary to keep the clients happy. This means a lot to the seller!
Don't be afraid to pay a premium. You can depreciate the purchase over 15 years, so structure the pay-out for 15 years if possible. You'll need to put some $$$ down, but negotiate the lowest amount you can. You are buying a cash-flow, and by working hard and smart you'll dramatically increase the agency's size, allowing a decent return for your initial investment as well as a good earned income.
10 years ago I did it this way, with a twist. I paid three and a half times the prior year agency commissions. Then I hit the ground running. The former owner stayed on for 6 months to help in the transition. I hired my wife as an office manager and a semi-retired commercial producer friend as a part-time manager for that part of the business. I paid the note ($350,000) within 5 years and never looked back. I now have four employees and an agency cash-flow of almost 500K, including the life & health work I do. Zero debt.
The point is this... if you can find the right agency it will already have the needed markets and be established in the community. Those facts alone will save you ten years of hard work! Good Luck!
Swymmer
Don't be afraid to pay a premium. You can depreciate the purchase over 15 years, so structure the pay-out for 15 years if possible. You'll need to put some $$$ down, but negotiate the lowest amount you can. You are buying a cash-flow, and by working hard and smart you'll dramatically increase the agency's size, allowing a decent return for your initial investment as well as a good earned income.
10 years ago I did it this way, with a twist. I paid three and a half times the prior year agency commissions. Then I hit the ground running. The former owner stayed on for 6 months to help in the transition. I hired my wife as an office manager and a semi-retired commercial producer friend as a part-time manager for that part of the business. I paid the note ($350,000) within 5 years and never looked back. I now have four employees and an agency cash-flow of almost 500K, including the life & health work I do. Zero debt.
The point is this... if you can find the right agency it will already have the needed markets and be established in the community. Those facts alone will save you ten years of hard work! Good Luck!
Swymmer