"Episode 5: Scale Up Or Run Solo? The Agency Owner's Real Decision

SPEAKER_00 0:00

Being an agency owner isn't for the faint of heart. Strategy, market conditions, building a team that lasts. This is From the Field, where Josh and Joe help you do it all without losing your mind.

SPEAKER_01 0:13

Welcome everybody to From the Field Podcast and another episode today with Josh and I. Josh, how's the morning started for you?

SPEAKER_00 0:20

It's getting there, buddy. Probably another cup of coffee down my uh agenda or needed. So uh we'll get there. You got football firing up, so I'm sure you're excited on your end. Yeah, it's kicking off here uh momentarily. So uh we'll be smack dab in the middle of the season before we know it.

SPEAKER_01 0:35

Well, very good, very good. Well, I love these sessions and um I've got a I got one today that I want to talk on that I can't once again can't wait to get your perspective on. So, you know, talking from the standpoint of agency owners, and when we talk about scaling their business or trying to preserve profit, uh, I'm gonna throw a situation to you of two common agency owners that I see. And I want to hear your take on which uh route you feel is the most efficient and effective. So if we've got agency owner one, they are pretty much a minimalist, right? They have cut their staff, they're kind of a one-person show. Uh, even if you look at their office and their office space, it tends to be on the low side uh from a cost standpoint. They're budget friendly, right? If you go inside the office, it's kind of the same thing, very basic setup. Everything is tailored towards uh saving so at the end of the month, we can put the most amount of money in our pocket. Okay. You've got the the second agency owner who is looking to scale this into what feels more like a real business, multiple team members, uh, specialists inside of those team members. They usually have a uh a bigger office, something that has more of a draw to the eye. When you walk into the office, it has more of a professional feel of a place to do business. Um, but every month they've got to make payroll. They have to deal with all the individual relationships inside of their team, which at times can be challenging. So if you look at those two models, which which it feels like is pretty much split, do you find one of those long-term to be more viable? And if you go out maybe five years, what do you think the stress level is for both of those agency owners?

SPEAKER_00 2:20

Yeah, I mean, I think I'm glad that you're posing something at both ends of the spectrum, right? Because there's also that middle, right? There's that one that like kind of has something and kind of hasn't done and hasn't committed to either one of them. So so I actually think you should either be a minimalist that way or all the way over and into scaling. So so I do actually think these are the two possibly viable outcomes. Um, the problem with if once you advance this five years down the road is the minimalist is is still there and they're they're playing defense the whole time, right? I mean, they they're dependent on what the market does. They're dependent on this, they're dependent on you know their personal health, their personal availability, their personal season. You know, are they gonna have to just miss some stuff for their kids or you know, not be home to spend time with their you know, spouse versus the person that scales and invests in that does have a light at the end of the tunnel, right? There's there's a point where you become the agency owner only or the principal. So I think they can both look very similar this year, but I think that one of them is putting work into something that's gonna pay off down the road, and one of them is kind of just this is the job I'm going to do for the rest of my life. You know, like I think option one, that's what their career is gonna look like five years from now. It's gonna look very, very similar, month to month, you know, that kind of thing. Whereas the person over here is is buying in and hopefully gonna get long-term ROI for what they did.

SPEAKER_01 3:39

Yeah, no, that makes a lot of sense. And let me ask you on this. So sometimes I will hear different arguments when it comes to scaling and looking at the exit strategy relative to uh an independent versus a captive agent. Okay. So, well, just from the standpoint of if I get to the end of this and I've scaled up and built something, um, there's more of a payoff a lot of people feel like when it comes to the independent model. Yeah. But I guess my question is twofold. One, do you think that's accurate? The other thing is outside of bottom line dollars, a person that scales, what benefits do you see them getting?

SPEAKER_00 4:15

Yeah. So that first part, right? Independent, like there's the appeal that this is yours, you own it, you can sell it, you know, that that part's there. There's no argument. Uh, captive side, you know, I just had a guy call me the other day, he's five years from retirement. And he's like, Josh, I don't know what I should do. He's like, Do I, do I go to this new contract? Do I, you know, buy into this team and do all this? I feel like I might be building a book for somebody else. And I'm like, man, that's a that's a tough question. We really had to look at what his goals were as far as his exit strategy goes. And honestly, he's kind of leaning towards not retiring. Sure. Because if he gets it up and running, he's kind of like, I could step back and semi-retire and actually be happier. So, so I do think there's a graceful way on the captive side that even if you don't have book ownership, you can kind of semi-retire retire and own it. I mean, there's no saying you have to be in the office X amount of hours if you've replaced yourself. So I do see that part of it um playing out. And in in I think this is a great question because everybody is different. And and the reason why you get a hundred different answers is because there's probably a hundred different ways to solve the problem. You know, what I know is though, when you build something and properly scale it, you become less fragile. And that is the big term in my office, right? Is we try to build an anti-fragile business and agency. I want the floor going up every single year. And that's something we discuss in our meetings, in our annual planning, in our development, is how are we increasing the floor each year so that our bad is better every year? Like if everything goes to heck in a handbasket, we're still in a great spot because of the systems and what we've done and redundancies. That person who's over here by themselves, they may have one employee that knows everything, that everybody loves Susie. She's been here for 20 years. Right. Susie leaves. What are you doing? Like you, you don't have it. Susie's on vacation. Like, it's a bad plan. And I can remember when we went from, you know, it was me and one person, and then we went to two. And the joke was, oh my gosh, like now when we go on vacation, we don't do two people's jobs. We only have to do one and a half. And like, that's a real thing. Like, I remember having a conversation with her, and I'm like, oh my gosh, like you feel like you have to do two jobs when I go on vacation. And yeah, I knew I had to do hers when she was gone. And then this third person comes and all of a sudden it's like, wow, we only have to do one and a half jobs. So, so that that floor raised, our our tolerance for unexpected goes up. You you can roll with the punches better. I think people that are running a scaled agency right now are able to handle the rate environment better, are able to handle shoppers better, are able to stay in front of their clients better than the one-man shop. But I again, I think the the very minimalist is a viable strategy. I just think it's it's not optimal. Um, I definitely think the middle where you just kind of have like two CSRs that you just kind of pay money and you're not really sure what they do, they're not redefined, they just kind of everybody does the same job, generalist type stuff. I I think that is is death. But um, you know, the other two I think are the polarizing strategies.

SPEAKER_01 7:26

Yeah, just commit to one or the other. The uh the other thing I've watched with you and I've seen with multiple agency owners is we think in in terms of the the bottom line dollar. But you, for example, great family man, um, kids are super active all those teenage years. You you've set something up that not only has been very lucrative, but you've set it up in a way to where you're able to do anything you want to do whenever you want to do it. And I think sometimes the minimalist doesn't look at it from the standpoint, we talk about work-life balance, but it's it's not about cutting back. It's about the ability to flourish while not being there. And that's what I've been able to see you do um year after year, you know, with with the way you've scaled up.

SPEAKER_00 8:08

Yeah, it's it, I mean, when you when you put the kids first, right? And and and your spouse and and and and and and your you know, your faith and all those things are are there first, right? It does look like what are you leaving for work? And it's not really that way. It's you prioritize around that stuff, right? That was the the goals. This is what was the big rock stuff. And then we backfilled and built systems that would allow that flexibility. So I I appreciate that it looks like you know, we've made it easy. Uh it's not, right? I mean, it's duck on a pond, like above the water, everything looks calm underneath, man. We're just going a million miles an hour. But you know, these these years were the goal, right? I have I have veterans and I have people that have taught me, and I have, you know, my uncle, I have my that say enjoy these years, and it's easy to say, but like we built it so that when these high, you know, these years where my kids are 12, 13, 15, 16, and we're double varsity sports and four sports for the middle school kid, and Holly coaches, and I coach, and we have this, and we volunteer and we donate. But like we can focus on that because we know the business is well taken care of. Like it, we've built a plan out over a long period of time where we addressed this, then this, then this, and we just kept scaling up and and it just makes you less fragile.

SPEAKER_01 9:22

That makes perfect sense. So let's talk about an offshoot of that. And one thing I run into a lot on the leadership side is there's a tremendous amount of confusion and uh lack of certainty of if I do hire, who do I hire? When do I hire? How does that work? So, from the standpoint of times I've watched you present on this, there's a phrase that I've heard you use multiple times. And you talk about that there's a free employee that every agency owner should leverage. So, can you talk us through that free employee idea and what people that aren't sure what to do, what direction they should be looking to go?

SPEAKER_00 9:59

Yeah, and I mean net free, right? Like that there's obviously an upfront cost, but it it's it's the fastest ROI to any person you can put on your team. And it's the first one I start. If if an agency owner calls me and says, Hey, like I I'm lost, hey, can I pick your brain? Hey, can I get 30 minutes? Hey, can I visit? This is always where I start. Okay. And it's what what is what does your calendar look like? And are your seats full? Okay, so if if you have a full calendar with a specific number of appointments every day with your clients and prospects. And if that answer is no, we have a free employee that we're gonna hire. And that is gonna be your ACR, your agency contact map. This is a throwback to power position your agency, you know, the the 25-year-old Bible for insurance, right? That Korsgotten wrote that is is the blueprint for what most of us do, whether we know it or not. Sure. And it talked about this this person, this person that fills your seats. And we use the math very simply. And this is the easiest calculation I get people to buy in on. I'm like, hey, how many appointments do you want in a week? Right. And then, oh, I don't know. And it's okay, well, if you don't know that, like we can't do this. But let's just use a very simple number. You know, say, say your goal is to have, you know, four appointments a day for your team. You want one of them to be about life insurance, you want two general reviews with your clients where you're just connecting with them and you'd like one prospective appointment per day. Okay, then you work backwards. What do you need to have that? So, you know, I'll ask people like, how long do you think a caller would have to call in a day to schedule four appointments? Well, I don't know. Okay, well, let's just use easy math. Let's just say it takes them up, you know, five hours every day. So let's go five hours a day, five days a week. This person's gonna come in just to schedule you those 20 appointments a week. What's the most they're gonna make in in your market? You know, what's what's a super high wage? And I always use it. I mean, is it 25 bucks an hour? Is it 30 bucks an hour? You know, let's use 50 bucks an hour. And they're like, what? I'm not paying anybody 50 bucks an hour. Right, right. It's gonna be free. Now I'm spending this. I'm like, well, let's just, you know, give them 20 hours a week part-time at 50 bucks an hour. And I only do that because it's a thousand bucks, right? So 50 bucks an hour, 20 bucks an hour, a thousand bucks. I thought you said it was gonna be free, man. That's a thousand dollars a week. And I'm like, okay, how many appointments do you have? Prospective and life insurance to place one policy. And every agent knows their own number. If they don't, they have a manager, they have you know, KPIs, they have something. Somebody can tell them what their closing rate is. And it's not about selling, it's just about you know, meeting with enough people that they have these problems and issues anyway, right? If you just talk to your clients, they they have things that have happened. So what do you need to write to clear that 1,000? Well, in 20 appointments in a week, if you're not generating a thousand dollars of revenue, that's probably not the career for you. You know, just the nature of the beast that you have to be in there. So you're not really paying, if you're paying a thousand dollars a week, you're not paying fifty thousand dollars for that person. You know, you're paying for that first week, probably the second week, okay, before because those appointments haven't paid anything that's generated. You might even pay three or four weeks down the road because you haven't got any revenue checks or any of that sort of stuff. But once those start coming in on the business you're adding on next month, you've got to be able to generate that thousand dollars from 20 in-person face-to-face appointments in a week. You could probably generate that most agencies in 10, right? I mean, we know it's so all you have done is you hired someone and they are revenue positive within the sixth week. So it's a free employee. I mean, it it was a one-time cost, no different than software. And then once you've made more than that back, right? Now the employee is net free and you've just scaling 101, you added the freest employee that you can add, and that is the person that keeps your calendar full. If your chairs aren't full, if your calendar is not full, this is the freest employee you can hire.

SPEAKER_01 14:07

And I can tell you on my side, once again, that tends to be one of the greatest problems is the fact that um my calendar is not full. All of a sudden I've got one appointment this week, or maybe two, and I don't really have a system set up.

SPEAKER_00 14:20

So what are they like from your perspective, right? What is the feedback? Because I know when they're calling me, like they're looking for an answer, right? Some of these are you're calling them. Hey man, I noticed things aren't looking so good over in that agency. You know, it's not always peaches and rainbows that you're calling your your agents and the people that are in your field. Like, what are they telling you about why they're not hiring someone to do their appointments? Like, what is the what is it? Like, I don't understand the math is there. They see people that do it that are successful, but then they just don't do it. Like, what are you hearing?

SPEAKER_01 14:52

Yeah, I I think there's two things, right? You've got the person that, again, is the minimalist, and part of that is don't invest money anywhere. Okay. So uh if I hire an appointment setter, that's a cost, right? I I can I can I can call instead of myself, even though I I won't actually do it. It's like buy term and invest the rest, but you don't invest the rest. Um, so nobody's actually calling to set the appointments. Um, the other one that you run into a lot, though, is that they did hire somebody and it didn't work out. Okay. So because this one thing didn't work out, uh, you just throw the baby out with the bathwater and hiring people as an appointment setter isn't effective. And I think that's the one that keeps me up at night, honestly, Josh, when I'm looking at hiring, and it's not just uh appointment setters, but it's pretty much anything that they're doing to scale, whatever, whatever specific role they're hiring for, I tend to see the exact same thing play out time and time again. And what I find is rarely is it a conversation where I hire the wrong person.

SPEAKER_00 15:53

Okay.

SPEAKER_01 15:53

And now that they may think that's the case, right? But once you start to peel the onion back, it always comes down to one of three of things, or most of the time it comes down to all three things. And the first one is they don't define success. So you get somebody new to come on, even an appointment setter. I should be able to quantify and explain what a successful week looks like. Sure. So that that should be clear. If if I don't do that, then what happens is the employee or my team member guesses. And when they guess wrong, I get frustrated. Right. I mean, that's that's basically how that didn't know what you were thinking in your head. That's exactly right. And I was not sure. So they should know it. That's I see it time and time again. The second thing is they don't train for that success. Okay. So whatever success looks like, they they don't train to that. So I see a majority of agency owners that train really by osmosis. And it and the way it works is I'll tell you what, Josh, great to have you on the team. I want you to shadow me for a week, week and a half, and then I'm gonna turn you loose. And somehow we think that's a a training program. And it's it's not. So, you know, that ends up being something I expensive, man. Oh, it is expensive. Bad expense. That that's a bad expense. And the third one then comes down to uh just KPIs, right? Key performance indicators. They're not looking uh on on a weekly basis back to what does success look like and measuring that and then having having a conversation because what ends up happening is if I do that weekly and I say to you, hey Josh, here's we talked about success, here's what it looked like, you've got a clear idea. We didn't get there. Now I'm having a coaching conversation. What ends up happening though is I don't run weekly meetings. And three months from now, you've repeated the same thing every week. Unbeknownst to you, I'm growing really frustrated. And now in three months, we're having a performance conversation. Are you the right fit for the team? When the truth is you really never had a chance. Right. So I I think if I've got somebody that's that's watching today and they're on the fence with somebody, I would, I would look in the mirror and say, hey, did I define success? Did I train around that? And then am I in a position where I have KPIs that weekly I'm looking at? And if I haven't done those things, I haven't really given that individual um a chance to be successful. That's what I see.

SPEAKER_00 18:23

Here's where I want to call it the industry, though, because like what do they give awards for, right? It's results. Right. They don't talk about processes. And so so we measure everything, like leadership will measure like this is what you did, and it's always results, right? It's not process. So you can have one big thing, and they're like, This is the best agent in the company this month. Right. It's like, no, their uncle won lottery. Like they're they brought 10 million of AUM in because their uncle won the lottery. Like, that's it. Yes. And we'll be like, this person is the best. Here's a trip to Hawaii, here's a trip to wherever. And you know, they're on Facebook with their their ring they won, or whatever something, you know, that we do. When the process and the fundamentally sound is where the money is, right? It's the non-sexy stuff. So right, and then in the in the in the field, we get mad when they send out, why are they measuring how many quotes? Why are they telling us to quote more? And we're like, well, because that's a leading indicator, right? Like so we get mad, then we get the wrong results, and then we end up doing the same thing to our own teams. And it's it's it's like a bad relationship where we were taught the wrong way and we just keep doing it anyway. So I I mean I think it's phenomenal. Um, you know, we try to be very specific with what a good day looks like, with what a great day looks like. You know, I have a win the day metric that I use for my associate team. They can specifically score themselves one through five every day, then they know what a good week looks like. And if they look back and they stacked up a few, you know, good weeks, it's it's amazing what the paycheck and production looks like. You know, it just is. For sure. Uh they think it was this, but I mean, I'm just trying to the indicators, right? The the behaviors is what I'm trying to enforce, not really the results. Because I know the results will get there if they're doing the right thing. But yeah, it's it's funny when you say that about that three-month man. I've actually been through that. You know, you're like, oh, but this person's not working out. Well maybe I didn't work out for them just as much as they didn't work out for me.

SPEAKER_01 20:19

And I've been in the same boat on the leadership side. Right. All of a sudden you get busy and you don't you don't train as well as you should in this particular case. And all of a sudden you find yourself blaming somebody that um really wasn't given the right track by yourself to run on. So I'm I'm totally with you.

SPEAKER_00 20:34

Yeah, and we maybe we should, you know, do a deep dive one day on on you know something about that, like those those metrics and just kind of how do we measure? Because I just think that no one knows. Everybody feels that every business is different. You know, every whether you have three team, one on your team, 10 on your team, 40 on your team, everybody's, well, that's different. You know, he's different, she's different. I I think maybe we should just talk about like general KPIs someday that that would be beneficial. But if if anybody's watching and you have any uh input on that, man, I I I like to hear other people that are successful and what has worked and and also you know what hasn't, because we learn a lot more from our mistakes than we do necessarily our successes. No doubt. No doubt about it. So that's good stuff right there. Anything else you want to add? No, I mean I I think you know, that free employee thing, I do get a lot of questions on it. You know, how's a how's an employee free? And and and the math maths, right? Like quite simply, if if you are sitting there without something to do at work, you're paying for a lot of of labor you're not using. Your clients need to hear from you. They want to we're not talking about selling, we're talking about meeting with people. If you just go through an agenda and just talk to people, they're going to tell you, oh, I was looking at this. Oh, hey, I switched jobs, oh, hey, I did this. Oh, hey, we're having a baby. Oh, hey, we bought a bigger house. Like life events that we know just by being there and being in partner with them, they're gonna ask about things and they're gonna buy them from somebody, right? You wanna be the be-all, like they're coming to you because this is something to do with money and and and you're the person I go to. So it's not sales, it's simply, you know, are you talking to prospective people? Yeah, they're looking for insurance. You know, are you talking about a product? Hey, this got brought up in a meeting. I know I have an interest in this. We're having our first kid in December. I want to talk to you about life insurance. Perfect. Get them on the books. There's one of your appointments that week. And man, if if we just stay busy with what people already want, you don't have to be that stereotypical insurance agent just shoving everything down and buy this. Uh, my, you know, my manager said we're having this push. Like that's crazy business. Right. So I I believe in scaling, I believe in all of it. There's a lot more here, but I I really like that you know, just kind of where we we have it today. And and uh I look forward to kind of seeing feedback on this.

SPEAKER_01 22:48

For sure. And like you said, and when it comes to the scaling topic, we've got a lot of different um subtopics that we're going to be covering. So uh as always, we appreciate you taking the time to join us. We're always open to feedback. So leave us any comments or reach out direct if there's anything that we can do that you feel will actually be able to help you more. So thanks again for taking the time. And Josh, always good seeing you. See you, buddy.

SPEAKER_00 23:12

Take care.

SPEAKER_01 23:12

Bye, brother.