Own small agency or Producer at larger agency?

[twobeacon]

If you were a successful producer of commercial accounts would you rather own your own small agency with limited markets, staff, no value added services, etc, or work for a larger agency? BTW, the larger agency will give us ownership of our accounts, and a 35/65 split.

[Wash Broker]

is that 35 for the agent or 35 for the agency????

[twobeacon]

Thats 35% for the Agent, 65% for the agency.

[Carlos]

I would rater own my own small agency, it would be hard in the begining but if i work it right it can grow into someting big with lots of markets. How far can you get working for someone else.

[92builder]

definitely on your own. you can make 35% in your sleep.

[sanddog1]

Marina Join a Cluster get 100% commission. THE split sucks the producer loses every time. I have owned three agencies and have produced for one. Never ever again..........................but you had better know how to run and agency or your in hot water. You need carriers appointments

[jctwindad]

Good arguments on either side. But, with a small agency and limited markets, you will also have limited income. I have worked for large brokers (Aon, Marsh) and have also had my own agency (took a $2 million premium agency to $20 million over the last 15 years). So, I have seen this problem from all angles.

The big brokers have a lot of support for you (CSR, Marketing, Claims, Loss Control, etc.) that you will probably never have in your own agency. That enables you to write large accounts, which you will probably never be able to write on your own. But when the day ends, you are still just a Producer (a number) and are at the mercy of a large company. To start your own agency, you will see your income cut in half initially, and will take many years to get back to where you are now. You will be writing much smaller accounts intially, and will be wearing many hats. But you will have the peace of mind of knowing that you won't be downsized, and you own your business, and make all the decisions (right or wrong). If you work hard, are smart and lucky, your agency will grow, and one day it will be worth some $$. My agency is now worth $4 million plus, and I could never have achieved that kind of retirement plan working for another agency.

So, if you are simply looking at income, and you don't have at least 12-15 years to put into building your own agency, stay where you are, because you have a pretty good deal (35% and vested ownership in your book). However, if you would enjoy the independence of running your own shop, can afford a significant pay cut for several years, and wait for the large reward on the back end (selling your agency), take the risk, and start your own agency. It will be years before you see a nice profit, because everytime you get some extra money, you will need to hire another CSR, a Producer, etc. But there are definite advantages to owning your own agency.

[PIA Jack]

If you do decide to start your own agency, try the SIAA website http://www.siaa4u.net/ to find a Master Agency near you. They can provide you with markets instantly and maybe some value added services as well. Talk to them. It's worked for 1860+ agencies, many of them scratch agencies.

[Porter]

Sanddog1,

How do you join a Cluster?

[MNDave]

I am new to the industry and chose to work for an established agency. I see both the pros and cons others mentioned. I was hired to manage the agency and be the sole producer until we get things moving forward. What compensation should someone expect to have the entire agency responsibilities along with being the main producer? I get a small base salary and a 40 producer/60 agency split and no rights to my book of business. Is this comparable in the market? Others have said I am underpaid for my responsibilities and the expectations set forth.
I would love to own my agency sometime but dont have the capital to do it now. Any recommendations?

[sanddog1]

PORTER, it's a piece of cake there are several very good ones in CA. I don't know what state you're in, so can't advised.
The clusters in CA, will require a $5000 to 10,000 down and 500.00 to $1500 per month. 80% will require you to bring something to the table, like a carrier or a good book of business. You must have low loss ratio's NO FARMERS Ins., type business. And you will have to demonstrate that you know what the hell your doing. The cluster could loose appointments and revenue credit if you screw up. The reward is 100% commission most of the bonuse. The cluster can write too just about every carrier you can think of in your sleep....

[IOA Irvine]

Check out Insurance Office of America (IOA) as an alternative. GREAT group of 500 people, Producer owns book, gets paid 60% commission (!), independent consultant, not employee. ...all the markets, broad support and expertise. A real cooperative team. http://www.ioausa.com
Get the benefit of agency ownership without the admin hassle!

[sanddog1]

Dude that's horrible, a producer can not survived on that split. If the producer is writing 50,000 plus accounts and is 100% CSR supported then YES. But that's Rare.

[sanddog1]

IOA Irvine, stay away another SPAM'er just what we need another PEO employee renting company with no markets

[InsAgentSF]

[quote="sanddog1"]Dude that's horrible, a producer can not survived on that split.

What are you talking about. Almost all producers are on this kind of split. So was i for 3 years and i did well