Eventually, every agency owner will leave their business. Whether or not you want to, whether it’s through internal or external perpetuation, you are going to leave. Knowing that this is going to happen, why leave millions of dollars on the table when you do?
In today’s merger and acquisition environment, every $125,000 of additional operating profit you generate is worth approximately $1 million of value. That’s why now is the time for agency owners to stop doing business and start building their business.
In his original work, “The E Myth,” Michael Gerber popularized the phrase, “Are you working in your business or on your business?” But because that book is now over 25 years old, I fear that it has become a cliché. The idea behind the phrase may sound good and be good, but it appears too many agency owners just aren’t following the advice.
In order to adapt that principle to today’s world, perhaps the real key is to...
If you have an accounts receivable problem, you better fix it.
It's not as prevalent today as it was in the past, because direct bill has resolved problems with collections for so many agencies. However, if you ever have to write off a bad debt, what's the cost?
Let's take a write-off of only $10,000. At an average commission rate of 13% and a profit of 15%, you'd have to write $512,820 of new premiums to replace the lost profit caused by the write-off. Mind-boggling, isn't it? So if you do not have a process for zero accounts receivable over 30 days, you'd better fix it the day before yesterday.
If the majority of your producers are not hitting their annual sales goals, that needs to be fixed. I believe this is rampant in our industry. Goals with no accountability are a joke and your producers know it. There's really no consequence if they don't hit their goal, other than they make less money. But they're not the only ones making less...
There’s an old saying, “If it ain’t broke, don’t fix it.” While I won’t argue with that, I think an even better saying might be, “If it is broke, fix it!” In this article, I want to challenge your thinking about what it means for an agency to be “broken” and what it costs you if that agency happens to be yours.
Is your agency broken? If you are not achieving the results you know you should and could achieve, something is broken. Here are just a few things that are usually broken in the average agency and that must be fixed if the agency expects to create better results.
If your net new revenues (excluding acquisitions) are less than 15%, that needs to be fixed. With the latest soft market hitting us, plus ever-increasing competition and commoditization of the products you sell, it’s time to become a selling machine.
As I’ve mentioned several times in past columns, the usual response is,...
In order to face success, rather than turn away from it, we must dedicate blocks of time during the week to work on each of these situations. If you do that as you plan your week, you’ll be in really good shape!
You may recall “The 12% Factor”: In any given week, you have 168 hours, of which 40 hours (24%) is work. Now if you can get just 20 hours of faceto- face time with clients, prospects or centers of influence (which most producers never come close to), that’s still only 12% of the week. How much time will you invest (not spend) in each of these areas in the coming week?
While the best producers are always scheduling at least two weeks into the future, most producers start off the week with an empty calendar. I know that most producers don’t even think about their schedules until Monday morning. (If they were following our “Producer’s Perfect Schedule,” they’d have 10 appointments the first week and another 10 appointments...
What exactly is success? Some people define success in terms of their family, health or happiness. However, for the purposes of this article, I am referring to business success/personal financial freedom.
My definition of financial freedom (or personal financial success) is the ability to do what you want to do, when you want to do it, with whom you want to do it and as often as you want to do it. In other words, if you want to do something, you can simply write a check. If you want to do something for your family, you can. You want to support your religious beliefs or local community? You can. If you want to help out others less fortunate than you, you can. The bottom line: You can afford it. It’s what you do with the money that matters.
Of the many ways that producers turn their backs on success, one of the most significant is how they use their time. Almost all producers sporadically do a great job. They will occasionally get a great result, get a great...
If there were just one pearl of wisdom I could share with producers, it would be this: Your network equals your net worth. That’s not a Sitkins original idea; however, I truly believe it’s the number- one tip I could give any producer.
In today’s totally data driven world, I fear that too many producers believe they can “click their way to success.” They rely far too much on the Internet as a means to reach their business goals.
FYI, I strongly support the use of social media, digital marketing, and web-based, mobile and ondemand platforms—any sort of app designed to boost productivity.
No matter where you look—past, present or future—the best producers all have one thing in common: They were, are and will be great networkers.
If you’re wondering how you can constantly build your network, here are some ways that have worked for me, as well as the thousands of producers we’ve trained in our 100-plus Producer Training Camps....
Most, if not all, independent insurance agencies say they want to grow. However, the actual organic growth rate for most agencies does not reflect this.
According to a recent report, even the national brokers had an organic growth rate of only about 3% last year. While their 3% translates to a much greater dollar amount than the average agency, it’s still only 3%. Considering these are the agencies that are supposed to have the best producers, the best markets and the best everything, to me that’s a truly lackluster figure.
Any agency that’s growing just enough to stay ahead of the ever-increasing cost of doing business is barely maintaining profitability. Accordingly, there’s little or nothing left to invest in obtaining the best people, automation and outside services. So the need for organic growth is self-evident—or is it?
As I began to ponder why more agencies aren’t growing at a greater rate, it occurred to me...
Originally I was going to say “plateaued owners and producers,” but the reality is you cannot afford to have any employee who has “retired in place.” We talked about this in our Profit Zones articles in the May and June issues. As I discussed at that time, if you have any RIP employees who aren’t following the system, not doing their job and not embracing change, your agency will plateau because RIP becomes contagious. That’s why every employee must be viewed as a Profit Zone.
Often, it’s the employees with seniority who not only refuse to do certain new and agreed-upon tasks, they get away with it. In other cases, there are employees who just don’t care. Either way, their attitudes and actions have a negative impact on all other employees in the office.
At most agencies, there are two kinds of workers. There are the ones who dread their jobs and only show up to “make the donuts.” As...
This month I want to challenge you with a theme we’ve often discussed:
What’s the cost of doing nothing?
This applies to those who consistently do the same old, same old and brings to mind two of my favorite adages: “If you always do what you always did, you’ll always get what you always got,” and “What got you here, will keep you here.” The strategies, tactics and behaviors that you’ve used to get your agency where it is today probably won’t continue to serve you in the future because the world is changing so rapidly. Consequently, the cost of doing nothing new continues to skyrocket. So if you’re unable or unwilling to take the initiative to start doing things differently, there’s a good chance you will eventually kill your agency. While I doubt that anyone really wants to kill his or her agency or deliberately sets out to do so, there are plenty of ways to destroy an agency. Here are the top five agency killers.
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