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2. Survive, Succeed, Automate, Transform

Understand the 4 primary stages of an agency, how and why you might be stuck in one of them, and how to move forward.

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Quick Summary

  • Many entrepreneurs struggle to survive in the initial years of their business due to poor planning, underfunding, and a lack of understanding of market forces so focusing on what's most critically important and avoiding unnecessary expenses is crucial during this stage.

  • Achieving profitability is a significant milestone for agency owners, but it's important to not only focus on personal income but also consider the agency's overall financial health and the well-being of team members.

  • While complete automation may not be possible when dealing with human interactions, leveraging technology and delegating tasks can free up time and improve work-life balance.

  • Going beyond profit and automation, a transformational agency focuses on making a significant impact in people's lives.

  • Once automation is in place, the agency can focus on scaling and expanding its reach which should be driven by the desire to make a transformative impact and deliver exceptional value to clients.

Full (Edited) Transcript


Survive, Succeed, Automate, Transform

Today, we're going to talk about the four major stages of an insurance agency. Now, these could really be applied to any business. So if you've been in other businesses before, might be relevant. And the four stages are survive, profit, automate and transform. If we go back to the beginning here, survive, this is something most people are familiar with this concept. So we all know or most of us know that entrepreneurship is not for everybody.

In fact, if you look at worldwide, roughly about one in 10 of people who are in the workforce worldwide are entrepreneurs. And that includes hotdog vendors, Solopreneur. That includes people who have their own businesses that are large or people who have one person shops. So only one out of 10 people is trying to do this. And as most of us know, of those one out of 10 people, many of them aren't making it past a year or two or three because of poor planning, because of underfunding, because of not understanding market forces.

So many different reasons. And so obviously, the first thing we need to do as an agency owner is to survive. Now, in many companies, that means getting your contract. That might mean making sure that you get the results you need to get to be able to qualify to represent that company. It might mean you continue to maintain a certain level of sales to stay within that business. And so obviously the survival stage is important. And it is a stage that very often people struggle with simply because they don't run their agency as effectively, as efficiently as they could.

They end up throwing a lot of money at things. They end up focusing on five paid advertising campaigns instead of one or two. They have five team members, let's say, instead of the three that they need. And so there's a lot of energy very often going in multiple directions, which can hurt the agency owner because there's a lack of focus. And so their survival stage is all about being able to focus on what's most critically important. And very often in stages like this, you'll hear Insurance owners say things such as, well, you know what?

There's some processes I'd like to install, but I really can't do that yet, or there's some Multiline and I'd like to do. But I can't do that yet. And so there can be this mindset where the agency owner tells themself that I can't do things the right way yet. I have to kind of do them in this sort of hackish way and just get by. Well, ironically, of course, that's one of the worst things you can do.

And so the challenge as an agency owner in the survival stage is if they're able to, before they even open their doors to be as informed as possible, to be looking at what are some of the major fundamentally sound mistakes that Insurance and owners make that hurt them. For example, overstaffing every time you're overstaffed by one person, it's usually costing you about anywhere from five to 10 to 15 hours a week training that person. Plus, it's costing you about one and a half to two times whatever their base salary is.

So for a new agency owner or any age for that matter, that might be costing you on a three thousand dollars base salary, that's costing you forty five hundred dollars to six thousand dollars per month. And when you lean hard on your cash and you're dipping into it very quickly, it shortens the amount of time you have to figure out this game. And it puts a lot more stress. It stresses family relationships, personal relationships, personal health. So while a lot of people say, Wade, I want to get to this efficiency stuff when I get bigger, when I have a larger agency like anything else, a lot of the times it's best to have this insight of the best fundamentals from the get go.

Now, a lot of business owners reach the second phase of profit, and for most agency owners, profit means when they're making the income that they want, it might or might not mean that the agency's profitable. It might or might not mean that they are paying their team members in a way that the team members are going to stay for a long period of time. So very often one of the challenges here is the agency owners seen this through sort of a one dimensional lens, their own desire for income, as opposed to looking at what the agency needs, what agency team members should be paid to keep them for long periods of time, to keep them happy, to keep things moving.

And so the profit stage is where a lot of people stop. They never go past that and they sometimes go back and forth between profit and survival in the sense that one year they do really well. They have a great sales year. They get a big company bonus. But what's been happening is every month they've not been cash flow and they've been dipping into profit every month or not been able to pay. So really, they've been kind of surviving and this big check comes in.

And then at the end we say, oh, well, kind of like a Black Friday sale for a lot of retail companies. OK, well, technically I was profitable, but the experience of it is not profitable. The experience is, again, very similar to the survival sense of constantly having to worry about bills and worry about expenses. And then there's some people that really do master the profit side. They have the right number of team members there.

Things are moving smoothly. They're on top of things. And then they get really bored. And sometimes that boredom can lead to distraction. Sometimes the boredom just allows them to invest their time outside, but usually to be able to have fun outside the agency and not just continue working 40 hours a week or thirty five hours a week, sitting in the office occupying space, almost as an apology to the team members around you to say, well, I don't want to leave the agency because maybe I'm not paying you as well as I could or should, or I'm not even sure if I am.

And so I should be in my office for thirty five hours a week. Right. That's what I'm supposed to do, that sort of employee mindset, even though my name might be on the door as the agency owner to make that step to automation requires systems, processes and again, automation. In this sense, we're not talking complete automation as we can with technology. We deal with human beings here. So human beings need attention. Your team members need attention and approval and validation and good income and connection and relationship, just like all of us do.

But there's a lot of things that can be either automated with technology or delegated to team members who are happy to do it. And if those relationships are maintained, if the team members are coached in a solid way, then automatic is a desirable result, because for a lot of people, the idea of being able to work a job and leave at five one and go enjoy life outside of work is very appealing. So it doesn't have to be that they're constantly growing in income.

Not everybody has the same income goals you have. Most of us have some income number where once we reach it, we're kind of content and we're good. Then some of us kind of want to continue growing ongoing forever. And that's fine, too. What I would suggest to you is. Once you hit automating some people then turn that into scaling, which you can and or you can turn that into making the agency transformational. Now, interestingly enough, in my experience, making the agency transformational is what scales it best. By transformational, I mean, when the agency truly has reached a point where it can focus on the clients. So there's a mission statement we have in the agency owners that I work with that subscribe to what we're doing in my father's office, where I help run their agency, where we talk about how we help our clients find the money to protect their income, their loved ones and their assets and plan for their financial goals and dreams. And so that's a sort of vision.

That's sort of an aspiration, a Why, a mission that is transformational. It's about making a huge impact in people's lives. It's about being able to look at all that's going on in the world or specifically in the country where you're in. I happen to live in United States and realize that many of the either perceived or true inequities going on in society often relate in some way to money and how people handle money. And so while not all of these ills can be fixed with money, many of them can be at least made better if people can manage their money better.

If parents are getting less arguments and there's less domestic violence because parents understand how to manage their money, they're not literally getting in fights and or hitting their children. And we can contribute to that. That's a very positive thing. If we can help limit poverty by helping people understand how to save rather than just spending all their paycheck right away. If we can help people make better decisions about Disability Insurance and making sure they're covered, if something happens them and they're unable to work so that their paycheck is protected.

These are the sort of things that not only inspire us as humans to be better people and make a huge impact in people's lives, but it also allows us to then attract people who say, that's awesome, nobody is doing that. I want more of that. Where can I get that? And when your agency is the place where they can get that, that is a very powerful positioning because it's real. It's fundamentally sound based on relationship, not just to who, you know, of exclusivity.

And I happen to know this person because they go to my country club or they went to this high end school I went to. But the true relationship power of I've connected with these people. I've helped them. I've sat down at the table them to help them make sure their family and their loved ones are protected. And I've helped them work through these difficult decisions. And so this show, we focus on the automation stage, mainly because to really make transformation work at a high level, we are going to need automation and high levels of systems and processes.

So in this show, we're going to focus a lot on automation. And then once in a while we'll talk about transformation. And in our business, we happen to have coaching programs that relate to both of those. But I want you to understand is if you're an agency owner and you're starting out your agency and you're surviving that even in the stage, you're at these strategies that relate to automating and yes, even a transformation and approaching things a certain way can help you get more profitable more quickly, help you enjoy the process.

And simply to put it in a very basic way, rather than working your tail off for 30 to 40 years and then coming to retirement saying, OK, I'm done, I'm done working completely. This business model is awesomely built to say, hey, my first three to five years, OK, I've got to work 50 hours a week. And usually if you're working more than about 50 hours a week as a brand new agency owner, you're probably working too much.

So at this stage, again, the surviving stage, 50 hours a week beyond that, I'd say, know, get your rest, go back in on Monday again, you'll make some better decisions, because sometimes making poor decisions because of fatigue is what happens when we're working too many hours. It might be that you're trying to do too much too quickly. By the time you reach that profit stage, usually you can get down to where you're working, maybe 40 hours a week and consistently making the income you want.

And so you don't have to necessarily retire, you can say, OK, I'm going to ease off my hours and move towards that. And as you apply more automation type strategies, you can get more down to 30 hours or less and eventually reach a point where you're still helping transform people's lives, your clients, the team members that work with you by virtue of the type of employment you provide for them and be doing that in about 20 hours a week or eventually if you want to, 10 hours a week.

Most of the agency owners I've worked with, if they can get their agency owner to 10 to 20 hours a week, don't ever want to retire. And usually financially, that's the best decision for them anyway. So hope you find this helpful. As always, I look forward to helping you create the agency you most desire to enjoy that so you can make more money in less time doing what you do best. If you'd like to discuss your agency situation and what it would take to get your agency to be more automatic, for you to be able to do more of what you love to do, to make more money in less time doing what you do best, you can schedule a strategy session with me and we'll look at your agency numbers and see what that prognosis would be and how we can help you.

As always, look forward to helping you create the life and the lifestyle you most desire so you can better enjoy your family, your friends in your life and create the type of business and employment that you are proud about as you make more money, in less time, doing what you do best. Thanks so much for listening.

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We’ll Discuss Your

  1. Biggest Goal - If you or your agency could only achieve 1 thing in the next 12 months, what would it be?
  2. Value of Biggest Goal - What's it worth to you (money, free time and / or happiness) to achieve this goal?
  3. Biggest Frustration - If you could "fix" 1 thing in your agency in the next 12 months, what would it be?
  4. Frustration Cost - What is your biggest frustration COSTING you (money, free time and / or happiness)?


Then, We’ll Discuss the Plan & Expected Results

  • Which goal(s) are likely to be achieved and how long it usually takes, based on our experience.
  • The best way to help you achieve your goals, based on your style and time available to implement.
  • Your anticipated time investments & money investments.
  • What guarantees we can make