HOW CAN AGENCY CONSULTING GROUP MAKE MONEY FOR MY AGENCY IN 2014?
While we love being appreciated, we always preach “back-to-the-basics” as the best way of creating opportunities, growth and profit for ourselves and for our clients. So we wanted to take this opportunity to wish all readers, agents, company employees, association executives and members a wonderful 2014 and reiterate how agencies can use Agency Consulting Group, Inc. to do the two most important things for any insurance agency – GROW AND PROSPER.
1. The Growth, Productivity, and Profitability (GPP) Analysis – This has also been called the “Check-Up from the Neck-Up.” Two types of agencies can profit from our baseline agency evaluation, strong agencies and struggling agencies. How are they defined and how can they profit from this time with Agency Consulting Group, Inc.?
A strong agency is one that continues to grow and reflects a relatively strong profit line every year. The agency owners inherently know that they must continuously re-invent the agency in order to remain in growth and profit generation and not stale as an agency. In sports, momentum gives teams an edge and creates the environment to win games, even against teams of superior talent. Similarly, the best agency that rests on its achievements invites their competitors to seize momentum when an opportunity presents itself. Successful agents use annual GPP “check-ups” to introduce new ideas and methods to their operations, continue their momentum, and keep their staff members at the cutting edge of their game.
The owners of “struggling” agencies can see that something is simply not right. These agencies may be growing and profitable, but there is an unidentified problem impeding further growth. The owners sense that the agency is in a “funk” and that the staff is no longer on the edge and having fun. A GPP Analysis will jump-start an agency and provide the ‘shake-up’ that the owner knows is long-overdue, but not within his control.
The GPP Analysis reviews every phase of agency operations and interviews all employees. The result, presented before we leave the agency, is a series of recommendations tailored to your agency to enhance the growth, profit and/or simply having more fun in the career that everyone has chosen for themselves in the insurance business.
2. Asset Protection Model (APM) of Sales – Our predecessors got it right almost 40 years ago, before the advent of the Price Wars between the companies and the direct writers. These trusted professionals provided valued service to their clients to assure them that they had the right coverages at a fair price as well as the protection they needed from financial exposure in the case of an insurable loss. The APM returns agencies to the model of professionals performing insurance and risk management consulting services to individuals and businesses. All of us claim to do that for our key clients. They trust us and we counsel them. But all clients, not just our VIPs, are made one at a time by creating a trust relationship. That takes time to create, not just a quote opportunity. Agency Consulting Group teaches production, service and administrative employees how to create and foster that trust relationship with prospects and clients to get more “wins” and retain a very high percentage of personal and commercial clients every year. This is hard for agencies to do – we’ve been trained in the quoting process that feels so good but yields so little in terms of strong and long-lasting relationships. Agency Consulting Group has created monitoring devices for the owner and managers to assure that all directives are being followed and measure the success of the agency in new sales and retention of customers.
3. Agency Valuation for acquisition, estate planning, internal perpetuation, merger and sale - By now everyone knows that “multiples” of anything is invalid indicators of the value of an agency. They can easily be derived once a value is identified, but is impossible to transfer to another situation or another agency because of the multiple variables that exist in each agency transaction makes it unlike any other transaction. It is like trying to sell the local hamburger joint based on the “multiple” value of a McDonald’s franchise.
Our analysts and consultants evaluate every agency valuation based on the direct and specific circumstances of the agency in question. And we have done so many valuations over the last 26 years that we can do so at a price that is VERY reasonable compared to other agency valuers or accountants. We KNOW the agency business and have done thousands of valuations and annual revaluations for agencies across the United States.
A correct valuation supports ownership changes to the IRS to avoid any tax complications (we have our own Enrolled Agent on staff specializing in the taxation of small businesses). It can maximize an agency’s value in a sale and create a valuation for an acquisition that provides the buyer positive cash-flow from year one. Most importantly, our valuations are not invasive unless special circumstances arise that require our personal visit.
4. Mergers, Acquisitions, Divestitures, Associations (Clusters) – We have been involved in these and other forms of association every year since 1985. Each is treated individually, but we learn from hundreds of transactions the dos and don’ts to which most agents never exposed since they may only do this once. Agency Consulting Group can offer advice or can handle the negotiations and transaction from ‘soup to nuts.’
5. Virtual Insurance Agency (VIA) – Virtualization may be latest ‘catch phrase’, but we have been involved in VIAs for almost 15 years. In the simplest terms, the VIA permits agents to continue in ownership with their earnings generated from their efforts in their locations, but as an owner of a much larger organization to assure them:
a) The greatest economies of scale from an expense and operations perspective
b) The most carriers without the pressures of growth every year
c) Guaranteed buy-out at the value of the agents stock in the larger Virtual Insurance Agency in which he is an owner and stockholder.
The VIA is NOT for everyone, but is the right vehicle for agents who want or need to continue in business with the benefits of a larger organization behind them (but not the rule or direction from others on how to operate his agency location). It will yield greater returns and greater opportunities for agencies using this vehicle for continued operations and perpetuation.
6. Incentive Compensation for managers, service and administrative staff and Producer Compensation for production employees - Programs to create incentives for every employee for retention and growth and teach employees that they only get greater rewards if they are more productive and the agency makes more money based on their efforts.
7. Strategic Planning – Our favorite quote is “If a man does not know for what harbor he is bound, no wind is a good wind” (Seneca, Roman Philosopher). We have often seen agencies scurrying from one good idea to another, abandoning each in turn, in the attempt to find that “magic pill” that solves all agency problems. They never keep to any idea long enough for it to take root and grow. Our Strategic Planning is the framework around which agencies pursue their dreams through implementation of rock-solid ideas and tools, each designed to move the agency toward its long term goals.
These are only seven of the 35 different consulting services that Agency Consulting Group, Inc. provides to agencies beyond the wonderful articles that appear in the PIPELINE every month. We invite you to call David Diamond, our Marketing Director (800-779-2430) to discuss any of these opportunities to sponsor your agency’s growth and enhanced profitability.
HAVE A HAPPY, HEALTHY AND PROSPEROUS NEW YEAR. MAY YOUR REVENUES AND PROFITS BOTH GROW IN DOUBLE DIGITS IN 2014 AND MAY YOU RETAIN EVERY CLIENT.