I sometimes think we get so busy just trying to get the work done in our agencies that we forget why we took the risk to start our own business in the first place. Most of us started our businesses so we could control our own destiny, and make more money. Remember?
I do too. But sometimes we forget.
Recently, I spoke to one of our member agents and asked her why she was placing $200,000 of business with an Excess and Surplus Lines broker instead of writing that business through a Strategic Partner Carrier of OAA. She told me it was because she liked the broker and didn’t want to offend her.
I don’t like offending people either, but like what Kevin O’Leary, the hyper-successful “Mr. Wonderful” from the television reality series, Shark Tank, always says: “It’s the money that matters in business!” Let’s look at the financial consequences of this agent’s decision to ignore the money:
Our agent partner was forgoing $32,000 in additional compensation (260%!) to not offend someone? Incredible! But, that’s not all. I asked the agent “would moving this business require any more work?” The answer was no. So, where does the revenue go? To the bottom line of course.
Agencies are valued on a multiple of profit. Eight times profit is the going rate. So, this additional $32,000 in income meant the agency value would increase by $256,000! That means the total value of moving the business, to the agency owner in business to make money would be $288,000. That is a 1,440% increase in economic benefit to the agency owner from one simple change.
We are all in business to make money. Yes, we are busy. But are we busy doing the right things? The primary responsibility of a business owner is to maximize the money the business makes. Is there a chance you have some profit and income leaks in your business?
*I know this level of bonus seems incredible, but it is fairly typical for OAA members. If you’d like to learn more give me call or send me an email.
http://oaaonline.net/wp-content/uploads/2016/02/logo-blog-1.png00OAA Adminhttp://oaaonline.net/wp-content/uploads/2016/02/logo-blog-1.pngOAA Admin2016-04-12 16:09:592016-04-12 16:16:01Would You Like to Make a Quick $288,000?