I get to work with dozens (in fact, over the years) hundreds of agency entrepreneurs, starting, building, growing insurance agencies in my work. Many of them have been successful. Some have not been. In my series on entrepreneurship, I discuss the “magic numbers” that can make you a successful independent insurance agent.
Rules of the successful agent
In a recent blog, I talked about what's required to become successful, which is, first of all, not to fail.
Another piece of advice I'd like to give you is what I call the rule of 30. If you think about the rule of 30 (and make sure that you follow it as a founder of an independent insurance agency), I can practically guarantee that you'll be successful.
How can I do that?
Because, again, I've helped start hundreds of insurance agencies. We've crunched the numbers and we've looked at the data and we found a pattern of agencies with long term success and growth. There are a couple of things that start with 30 that have everything to do with success.
Ready to learn the growth strategies that have helped many entrepreneurs (like you) make it?
What is the rule of 30?
The first rule of 30 is $30,000. Every agency we've ever worked with that generated at least $30,000 in new business revenue, that's commission income, in the first year in business survived. You have to survive in order to thrive, right?
So the big question is can you do $30,000 in your first year? Of course, you can. We'll discuss how to guarantee you make $30,000 in your first year.
The other 30 is something you have to come to the party with. It's something you have to do before you open your doors. You have to do it before you sell your first policy to your first customer. And it starts with 30 too. What's that 30? It's $30,000 again.
That's the money you need to have in your bank account when you open your doors.
Now, why is that a magic number? It's not particularly magic. It could be $50,000 or even more.
But what we've discovered is that the minimum capital that you need to have to open a personal insurance small business insurance agency is $30,000.
So if you haven't saved that money, go sell your car, your kids' toys, whatever you have to do — but have at least $30,000 in your bank account. The two magic 30s: $30,000 bucks in the bank account, $30,000 in sales your first year. Those are the two magic numbers that can set you up for sustainable agency growth.
How I prioritized goal setting to become an award winning independent agent and coach
Now let's talk about how you can guarantee yourself $30,000 in commissions your very first year.
I'd like to take you back to 1995. I was starting in the insurance business. My wife was pregnant. I needed $50,000 to survive his first year in business and pay for the new kid. How was I going to do that?
I had no idea.
So I built a thought experiment for myself using a spreadsheet. And I said, “how much business do I have to write given the stuff my agency is good at and the commission rates that our carriers pay us in order to get to $50,000 in my bank account?”
I built something I now call the sales forecasting tool. I've taught hundreds of agency owners and entrepreneurs how to use this tool at this point to great success. When you've done the thinking at the end of the tool, what you are left with is asking yourself, what do I have to do today?
If you know what to do today to make $30,000, or $40,000, or $50,000 dollars in income hit your bank account in the next 12 months, you can relax. All you have to do is worry about what you have to do today.
A free tool to grow your agency and my closing thoughts
And so if you'd like a copy of the sales forecasting tool, which I guarantee will get you the results you want, drop me a line and I'll be happy to send it to you. The sales forecasting tool will get you to $30,000 in the first year.
Before I close, I want to share one other number with you just as a bonus — that number is $50,000.
In my experience over two decades of helping hundreds of insurance agencies get off the ground is that if you can hit $50,000 in sales your first year, you'll have at least $700,000 in revenue within the first five years. Isn't that amazing?
If you'd like to know more about it, reach out to us and we'll share with you how we make that work with the agents in our organization. Good luck and remember the rule of 30. It's the secret to success.
Always keen on helping others make their dreams come true, Tony and his team have helped independent agents grow into more than 250 independent agencies. This has made OAA the number one ranked Strategic Master Agency of SIAA for the last 5 years, and one of Oklahoma's 25 Best Companies to Work for.
Tony loves to share his knowledge, insight and wisdom through his bestselling books as well as in free mediums including podcasts and blogs.
Tony and his family are members of Crossings Community Church, and he is very active in community initiatives: he’s chairman of It’s My Community Initiative, Inc., a nonprofit working with disadvantaged people in Oklahoma City; and chairman of the Oklahoma Board of Juvenile Affairs., and he has served through many other organizations including the Salvation Army, Last Frontier Council of the Boy Scouts of America, and the Rotary Club.
In his spare time, Tony enjoys time with his family. He’s also an active outdoorsman and instrument-rated commercial pilot.