Two kinds of agencies make a lot of sense to me.
The first earns under $100K a year and loves it: more money than they’ve ever made, being their own boss, having a relaxed schedule, etc..
The second has mastered the art of making $500K+ of net income annually. They also love it. They’re ideally challenged and invigorated by what they do.
Most seem stuck in a perplexing middle ground – working as hard as a half-million-dollar agency owner but only earning half as much.
This looks to be a common challenge in the insurance industry, where the goal is to scale a high-value agency but the approach remains that of a lower-tier operation. In fact, it seems like a challenge for small business owners in any industry.
Why does it happen?
The limiting factor for these agencies is the agent’s mindset. They aren’t thinking like agency entrepreneurs poised for growth; they’re thinking like top-tier salespeople who happen to have some employees.
Getting past the middle ground requires a fundamental shift in thinking. You have to go from a salesperson’s mindset to that of a strategic entrepreneur.
It’s terribly cliche, I know, but you have to go from working harder to working smarter and thinking more strategically.
The warning signs are obvious:
- Working longer hours without seeing a corresponding increase in revenue.
- Expanding the team, but not seeing a significant rise in profits.
- Focusing on sales, but neglecting scalable processes.
- Trying to copy “tips” and “tricks” that more successful agents use without actually thinking and working the way they think and work.
This is the middle ground trap.
So, how do you convert all that hard work into $500K or even $1M in annual profits?
Adopt an Entrepreneurial Mindset: Transition from seeing yourself solely as a salesperson to recognizing that you’re building a business. This shift requires a focus on systems, processes, and scalability.
Focus on High-Value Activities: Identify the activities that directly contribute to agency growth. Delegate or eliminate everything else.
Hire Strategically: Invest more to hire individuals with greater talent, potential, and character. Each team member should bring unique value and contribute significantly to scaling the business.
Product Selection: Are you moving to take over a niche, or are you selling anything to anyone? The riches are in the niches, as they say.
Ideal Customer Profile (ICP): Focus on attracting (not just hunting) higher-quality clients. These clients not only contribute more to your bottom line but also align better with your growth goals.
Consistent Customer Engagement: Regularly meet with customers to gather insights for better scaling and to maximize their lifetime value. Understanding their evolving needs helps in refining your offerings and strategies.
Continuous Innovation and Adaptation: The market is always changing. Rather than trying to keep up with the competition through late imitation, stay ahead by continually adapting your strategies and offerings based on customer feedback.
Remember, getting unstuck isn’t about working harder–it’s about working differently.
Scaling an insurance agency successfully requires a shift in mindset from a top-tier salesperson to a savvy business entrepreneur.
Break free from the trap. Aim for the top.