25. The 1st (Profitable) Hire for Your Multiline Insurance Agency
Many insurance agency owners start as solopreneurs and get caught by the golden handcuffs of their profit MARGINS without focusing on growing TOTAL NET PROFIT.
Learn WHO should be your best hire, so you do it safely & affordably.
- Simplify your hiring process by focusing on tasks, levels, and skills rather than personal preferences.
- The easiest tasks to train and delegate should be prioritized to minimize time and money investments.
- Don’t overcommit while making a new hire and not neglecting the decision altogether.
- Evaluate the return on investment of time and income when considering delegating tasks.
- Hire a personal assistant to free up time for high-impact tasks.
Full (Edited) Transcript
Hey, everybody. Hope you are doing awesome today. I want to share with you a very simple concept that is often made way more complex than it needs to be. It's one of those things that because there's a lot of fear around it, it doesn't always get done as effectively as he could. And what we're going to be talking about is a really simple concept of how you make your first hire. So as an entrepreneur, I remember a time when I worked as a solopreneur and I had nobody working for me and I was doing everything soup to nuts. And on one hand, it was great to keep all the money. On the other hand, it was exhausting. I could not keep up with everything. And in my case, with a software business that a residual income component to it, it took me about four or five years before I decided to hire somebody. I've worked with multiline insurance agency owners, and in their model, the business model is focused on renewals, and yet some are reluctant. They're hesitant to hire somebody. They're doing really well. And they're concerned that if they hire too much, if they pay too much, that it's going to take away from their profit, they're going to have to work even harder just to sell more stuff to pay for this extra person.
And rather than having a business model where they can enjoy life more, they're just going to work harder and harder. What I want you to think about is the idea in your business, whether you have one employee or you have zero or if you have 10, every time you're ready to hire a new team member, there's this sense of commitment and understanding. Can you afford it? And is it worth it? And so what I want to start out with is just a very basic concept to first simplify the who, who should we be delegating to? And it really comes down to tasks and levels and skills. It's not about the person or the name or how much you like them. And so imagine you had an airline said, Okay, which would you delegate first? Let's say you're running an airline and it's you. You're flying the plane, you're the flight attendant. I don't know how you do that. I guess you're just giving people cookies and stuff. You're the ticketing, you're carrying their baggage. You've got this one-person operation and you're going to delegate and you say, Okay, what would you delegate? So you could delegate being the pilot and you'd say, Okay, what are the things the pilot has to do?
Well, they've got to launch the plane. They have to fly the plane, they have to fly the plane, they have to land the plane. And you might say, Well, either I like flying or maybe I don't. But regardless of what you like, if you looked at it, you'd say, Well, the training time for this is about 1,000 hours plus, depending on where you do it and how well trained you are. That could take months to years. And to pay somebody to do this is going to be anywhere from 50,000 to 200,000 dollars. If you delegated the flight attendant responsible for passenger safety to serve the food to maintain order in the flight, and that takes about 500-plus hours, anywhere from three weeks to three months, and that person makes $30,000 to $80,000 a year. The customer service person who schedules and reschedules flights take complaint calls, does billing questions, they take about 250 hours to train and cost about 25,000 to 60,000 a year. And the person who works at baggage claim screens luggage, loads and unload luggage, tracks lost luggage, again, about 250 hours and 25,000 to 60,000 per year. And so the very simple answer would be, Well, let's delegate what's going to take the least time investment and the least money investment, because we might invest a lot of time in this person and it might not work out.
We might invest a lot of money and it might not work out. So if you had all of these skills, we'd say, Let's first keep it simple. Let's go with the easiest to train task first, and then we'll move our way up the ladder. And so if we look at your business model, a lot of the insurance agent owners I work with, they want to delegate the hardest part. They want to delegate the life sales, the annuity sales, the health sales, the multiline reviews, the complex cases. And that requires the multiline reviews, which most agents like doing, but the sales calls and drumming up the sales and networking, maybe they don't like as much. And they definitely do like closing the sales. Well, in that case, the training time for somebody to be excellent, this is something that is so often missed, it does take 1,000 to 4,000 hours, six months to two years to get somebody at a very proficient level. Very often people say, Well, I can teach somebody how to sell life policy in half day. Yes, you can teach them the content, but who they need to be as a person, how they need to evolve, the polish, the social skills it requires to do it takes a lot more time than that.
And even if you pay that person and they're good at it, without bonuses, your salary is going to be, let's say, 35,000-50,000, depending on where you are in the country, because that person has to get licensed, they need to be skilled. Now, if you have somebody who does proactive PNC sales, I'm going to be really specific with this definition, not somebody that can write an auto that walks in the door, not an order taker, but an order getter, somebody who goes out and gets the business and makes it come in the door, well, that person is going to do PNC policy reviews, whether they're selling a new policy, they're going to make sales calls or sales networking, some connection where they bring in business and they're going to make the sales. And the training time for that person, again, you can say, Well, wait, I could train this person in 2-3 months. And that's possible, but it's not the average. And the base salary is not going to be too different than the life, health, and beauty person. When you go to the retention person, this person maybe needs to order take sales, but their primary responsibility is to do policy and billing questions, retention calls, complaint calls, it takes them even less time to be trained than the previous two.
The base salary is similar. And again, there's still bonuses. I'm just talking salary here, not total compensation package. And then I said, What about a personal assistant? Somebody who just helps me maintain my email, my calendar, the time intensive personal tasks I have to do. They guard my time. They make sure that I'm doing my highest impact, highest income work. I could probably train that person in two to eight weeks, and they might still cost me $30,000 to $45,000. They might cost less. And of all the positions, that fourth position, the personal assistant does not need a license. Very often they can easily be a remote worker. Technically, the other three could be, but the personal assistant is the easiest. Again, we first want to delegate the work that is least expensive and is easiest to train to do. Because if I free up your time as your personal assistant and find 10 hours of time for you, that's still 10 hours. If a retention person frees up 10 hours of your time, that's still 10 hours. And very often the personal assistant can free up-time in areas such as tasks that are even outside of work that don't involve your team and can be things such as scheduling for your grocery deliveries, taking care of your flight or travel plans or whatever else it might be, paying your bills.
And if you get too caught up in definitions of this, you might say, Well, Wade, how is that person helping me? I was going to do that outside of work anyway. But then that's not downtime. If you're spending Saturday all day doing five to six hours of personal work, well, then you're not getting Saturday off. So again, if somebody could help with that, that would make a big difference. Within these four positions, it could be in some ways more awesome. Yes. If you can find a unicorn, if you can find a person who does life, health, and beauty sales and proactive P&C sales, great. Sometimes you'll find somebody like that who wants to become an agency owner and you can coach them on their way up. But if this is your first hire or if this is a time right now where you're saying, Wade, the market's tight for me. I'm in the middle of a rate increase and it's causing problems, or I've got a homeowner's restriction or whatever it might be. And so right now that next hire, even if it is not my first hire, it feels like my first hire or it feels like I need to be really certain that I'm profitable, then the first thing to do is to make sure you're not overextending.
Now, the other answer that some people do is they'll just put their head in the sand and they won't make that hire. And that can be a mistake as well. So if we look at your time investments, we want to see what is the ROI in them? What's the return on those investments? Let's say you were doing right now as a solopreneur, let's say you're the only person in your insurance agency, and this might be the case, or it could be that there's five other people in your agency, but this is still how you're investing your time. So it doesn't have to be that you only have no team members or one team member. But let's say that 40 hours a week is going into service work and service calls, and you say, Well, Wade, those are important. I'm retaining business, those people are renewing. Androughly $1,000 per month is making its way to me because I'm doing this work. Okay, so after expenses or whatever it might be, or gross income. Right now, I'm just doing some work where I learn. I'm doing my best to recruit people, but I've not found anybody yet.
I'm doing the auto quotes, the fire quotes, the health and life sales, and all those things. And then I'm also doing the multiline reviews. Overall, I'm still doing 15,000 of business permonth, that's really great. The part that's not great about it is the 60 hours a week. And of course, your own goals for income, that might be great for you, you might want more, whatever it might be. But so I'd say, Okay, well, what else could it look like? Well, if you were able to find somebody that was a retention team member, and in those first two rows, the service work and the calls, if somebody could take care of that and you could delegate 30 of those 40 hours to somebody else, you're not going to still make the same 12,000 per month. Let's say you're going to make 8,000 because 4,000 is going to them between base and benefits and whatnot. And then you have a little bit more time training them, coaching them. You're spending some more time doing auto. You're basically all of your sales, your auto, your fire, your life, your health. And even more so because it's the most profitable, you're spending way more time or investing way more time in your multiline reviews in the same 60 hours, you could be making quite a bit more in this case if these numbers held true, it'd be another $3,500 per month.
And you might say, Well, Wade, that's good, but I don't want to be working 60 hours. Okay, what if we got you to 50 hours and you are still doing more of the multiline client review work? You're not doing more on the auto fire and you're keeping that the same. You're doing more life and health and you're making more. So literally, you're working 10 hours per week less, making $2,000 per month more. That's a step in the right direction. If you said, Wade, 50 hours is still too much. I've got family, I've got friends, I've got life. Or if you're like me, Man, I'm just getting older. I want to make sure I have time to enjoy life. And you said, Okay, I'd note if I got to 45 hours? Here's an example where, again, just reallocating your time, if that service work can be done by somebody competent, now you're working one-five, that's 15 hours per week less, and you're making a thousand dollars per month more. You're still making more. And then finally said, Wait, no, I need to get to 40 hours. Great. So I could still be making even a little bit more, in this case, 500 bucks more per month, working 20 hours per week less.
That's a thousand hours per year if you use 50 working weeks as the multiplier. That's a lot of time. That's basically a part-time job. And so we want to be able to delegate. We don't want to get afraid of it. We want to make sure we're doing it intelligently. And so there's a lot of different ways you can do this. And I bring up outsourced because it's such a big opportunity that's not been there before. When I hired a person for my software company, and I hired them remotely, it was about 2005, I had to hire a full-time person. I hired her, she was still pretty bold or unique for the time, but I needed to give somebody a full-time job. So at times, we were doing great. And then when we took some hits during the recession, I was having to work extra to sell more software to cover this person's salary. And this person was awesome. So there's nothing against them. It was just like, Okay, this is not what I envisioned. Today, it's so possible. There's so many freelancer sites like Upwork and Fiverr and OnlineJobs. Ph, where you can get work done for you.
And the person may be once five hours a week, 10 hours a week, 15 hours a week. So you don't necessarily have to have them be full-time. And there's other opportunities as well. So the first thing you want to do is make sure you start with what you can afford, make it work, and then grow. There's no reason for you to be borrowing money to hire people. That's not a good idea. Scale back your personal expenses or scale back your business expenses, and when possible, outsource to freelancers or establish businesses and services. So something else you could delegate. You could say, Wait, every night I go home and I cook, and it takes an hour of my time. But you know what? If my time's worth 100 bucks an hour and I'm doing my thing, having a $50 meal that I take out for the family, that might not be a bad idea. Of course, there's nutritional concerns and whatnot, but overall, that's not a bad idea. Anytime you have somebody do something for you, somebody mows your lawn, that's delegating. So you might not need to necessarily hire somebody to find more free time.
So first see all the different things. The person that cleans your pool, if you have a pool or maintains it or whatever it might be, look for the things you can do without committing to long term contracts or having to do training. So if a person already knows the job, that's great. Then also can keep in mind that one of the best, very often untapped sources of solid labor is stay at home moms. Very often stay at home moms, already have been in the working force before. Some have bachelor's degrees, some have mattress degrees, some have been very high of executives, but they have this value where they're staying at home to take care of their kids. And once their kids reach a school age, very often you'll hear a lot of them say things like, Well, I still want to drop my kid off at school, let's say at 8:30 in the morning. I want to pick him up at 3:00, but in between, I'll work 4-5 hours a day. In fact, I need to. I'm going nuts. I need to do something more than talking about baby Einstein and kid stuff. And so that's a great source of solid team members.
And that allows you to also dip your foot in the pool without going all the way in if this is your first hire, if this is a little nervous for you. And then again, don't borrow money to hire. Fund from your cash flow. Keep growing. It'll make you stay honest to make sure you're constantly growing. In that way, if somebody doesn't work out, you can let them go. But you knew you could afford them. You have a plan, and if that plan works, everything's going to be able to be funded. And then add freelancers and contractors as quickly as possible. So again, the short term commitment or no commitment situations, add those as quickly as possible. The person that does bookkeeping for you that again doesn't work in your business, and think about this, the people that don't need to get license, person that's bookkeeping for you who's not in your business, the person who does your lawn, the person who does your taxes, all these different opportunities. And then add employees more gradually. If you can add one keeper, whether they're part-time or full-time, every 6-12 months, you'll be in a great situation. And most people say, Wait, I can't wait that long.
In fact, I need to grow quicker than that. Most of the agency owners I know that have been in business were 10 years plus, let's say the 10-year agency owners. Most of them do not have 10 team members. They'll usually have four or five. So you don't need to be growing at some super crazy pace. You can if you want to, if your market's hot and if you're having fun, that's great. But as long as you're growing gradually, making progress, and they're seeing that they're doing well and it's a good situation for them, then that's something you can do without it becoming too crazy. And so the action plan is simple. Determine which activities you're going to delegate first. Sometimes it might be what you hate, but very often you want it to be the things that are the lowest impact activities, the ones that cost the least amount to delegate, and the ones you can train more quickly. Calculate your delegation budget and create and post your opportunity. And something else to keep in mind, specifically if you're looking for a retention team member, a service team member, sometimes one of your colleagues will have that person in their agency, and they were hoping that person was going to sell life insurance or annuities or health insurance, or they thought that person was going to do proactive PNC sales and they don't.
So sometimes you can just ask your colleagues say, Hey, do any of you all have somebody employed right now that they are an awesome person, but they're just not what you thought they would be? Can I talk to that person? Now to be really clear, nobody will give you an awesome salesperson. Nobody will give you an awesome life salesperson, PNC salesperson. I've never seen it. I've seen dads not willing to give it to their sons and daughters. So if they're willing to tell you, I've got this great life health person, I'm going to give them to you, probably a red flag. But overall, there's opportunities. And if you can't afford somebody, the other thing to consider is, let's say after three to six months, you can't afford somebody because the market turns down and you said, Well, wait, I knew this was going to happen. I was afraid of this. And now I've asked somebody to leave a job and they're out of luck. Usually, if you have a good person and they do good work, you can find a friend or somebody who will hire them in a heartbeat. And then finally, on the personal assistants.
Sometimes the personal assistants work remotely, sometimes they can work part-time. You might decide that you and another person, or you ask your friends, Hey, and you all have a personal assistant maybe works for you part-time, that's solid and reliable. If you need ideas on where to connect with some of them, I can tell you as well where to find those. I hope you find this helpful. If you have any questions on this, please put them in the comment section below or feel free to reach out to me. If you'd like to see more content like this, you can follow the podcast for free at automaticinsuranceagency. Com. There's a video component of the podcast. There's also an audio component. And then finally, if you want, just simply schedule a strategy session with me. Schedule time to talk about your agency, what's going on, where you're at, what your most important goals are coming up, and how I can help you. So as always, I look forward to helping you impact more people and make more money and less time doing what you do best so you can fully enjoy your family, your friends, your freedom in your life.
Let me know whatever I can to serve you and hope you have an awesome week. Thanks.
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