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I have a quick question for some more experienced producers or agency owners. I am being offered a producer position at two different agencies. One agency is offering a very high base salary but would probably not get any commission for at least a year. The other agency is offering me a small salary with commission off the bat. They would also offer me training from the agency principal, code a book of renewals to me and have me share in agency contingency payments in the future. Both offer a vesting schedule for my book of business over 5 years. Usually I would prefer a smaller base however given the economy, what do you feel is the better offer?

Option number 2 IMO. Sounds like the agency principal in that situation is looking out for your interests long term. It is always tempting to take the upfront money but you need to think about what happens if you don't produce enough (in this economy) to justify the large salary...

Thank you. You make a good point. The split would be 50% new and 30% renewal at the first agency when I do qualify for commission and 40 new 25 renewal at the second agency, but I would be paid this right off the bat.

What is the difference in base? Is it a true salary or a draw against future commissions?

I am a recruiter in the industry and if your were my cnadidate I would defintiely suggest you take door # 2. It sounds as though they have a real interest in your career growth and may have a potential for equity.

This would be a draw.

Hi new2,
Here's my 2 cents worth.
Option 2 looks more attractive but my questions to you are thus;
Are you an experienced producer?
Will you bring a book with you?
What are your qualifications to write new business? Earn future commissions?

Recommendations on which option is a better 'fit' for your personal situation will rely on your answers to these questions. A) If you don't have a book of business to bring with you and you cannot afford to live on the small draw, be careful with option 2.
B) If on the other hand you have a book which will provide 'guaranteed' income, put more serious consideration into option 1.
Remember to think long term and consider not only your options, but be realistic in considering your qualifications as well. I'm seeing a lot of long term experienced producers having a very difficult time producing new business because it's been so long since they had to. So consider well what your capabilities are...
Good luck!
Shagster

One other consideration,
If being "coded" a book of business to service on behalf of the agency, what commission level will you be paid on that business and how long will this part of the agreement last? Is this business permanently yours or do they take it back after 1 year, 2 years? And if you cross sell additional lines to these accounts do you keep them or does the agency get that also when they take back the other? Whatever the answers are to those questions, make sure to get them in writing so you know exactly where you stand!
I've been through that scenario and at the end of two years, after expending a great amount of time and effort on servicing and renewing these accounts, when they're taken back you have only what you've written in new business to survive on. And if you've spent 60-70% of your time on the 'company' book you'll find yourself in trouble at the end of the term.....
So do more research and GET IT IN WRITING!
Shagster

Thanks Shagster. I appreciate the advice. I was a succesfull captive for over 2 years. I have no book to bring with me as of now.

Ok new2,
Without a book to bring with you what you have to consider would be the market access each agency offers and if your prior experience meshes with their market commitments and agency plan. For instance, if you have good experience in writing garage risks but one of these agencies has no market access for this business, then you're fighting an uphill battle. If you've been assured by both that your area of experience is adequately provided for and you can focus on that while learning other areas to expand into, then I say you would do well to put serious consideration into option 1 as well. Of course understand that what you don't make up of that draw in written commissions will become your debt to the agency and you will not be able to make any commissions until you've paid that debt off.
So all said and done it still sounds like option 2 is more attractive, I just caution you to have all the details spelled out and written prior to accepting it so you're protected and know what to expect if/when your servicing term expires on the business coded to you. And then make sure you focus MOST of your time building your own book of business so you will always have something to fall back on if your situation changes either expectedly or unexpectedly in the future.
Good luck,
Shagster

A few years back I accepted a sales position with a decently sized/capitalized agency that gave me a decently livable salary. This was put together by a sales manager who realized that with my tenure in the business that he would not have to really train me nor license me.

This deal also included a committment that I could expect to see a minimum of 5 firm qualified appointments each week from our telemarketing department. I felt that even if I was only provided with 3 I would be able to suceed.

Well the wheels started getting a bit rough pretty quickly. I was lucky if I even got one appointment per week...and that was not what I considered qualified. However I was not completely relying on others to guarantee my success so I commented to my manager but went along with my own efforts.

Four months in...the sales manager abruptly quit! The following week everyone was called in for a meeting with the agency owner...and he dictated that effective immediately we needed to at least tripple our submission ratio. Nevermind that to do this we would also need to increase our telemarketing/marketing efforts. Nevermind that even with an increase in the marketing effort there would be a bit of a lag until appointments improved, nevermind that even once appointments improved there would be a lag until submissions improved. He expected increases the very next week! I think you get the picture.

I remember sending an email to the owner titled something to the effect "You can't get there from here". I won't even mention that every account that I placed was negotiated via the "backdoor" by myself. I could not count on the over worked (under resourced) "marketing" department.

Needless to say I was not there much longer.

Bottomline...as has been previously stated. Negotiate EVERY little detail of the deal. Get everything in WRITING, never have a verbal or gentlemans agreement. When it comes to seperation time...no verbal deals are remembered....and suddenly no one is a gentleman (gentlewoman/gentleperson?) any longer.

If you get static wanting every thing in writing...then that should be a good indicator of where things could be headed.

Good luck! The production/sales side of the business is one of the most exciting for me...but also one of the most suspectible to swings. remember to stash away funds for any dry spells, as you can be guaranteed there will be some.