THE ACCIDENTAL OWNER
“It isn’t a career when you hate what you’re doing --- it’s a Life Sentence.”
Common Situation One
A young man, or woman breaks away from an agency or company, desiring to be his own boss. He or she is a good salesperson, relatively knowledgeable in the insurance business and personable. With no large pre-existing book of business, they throw themselves into the selling process through enthusiasm or desperation for income sources, and they start selling insurance. As their book of business grows, so do the pressures exerted on them by their existing clients for service and administration. Eventually, they find that they are better salespeople than processors and they hire an assistant. That assistant is clerical and simply does what she is told. As time passes and the book of business continues to grow, so does the staff. The staff starts taking on a life of their own and one or more become the ‘Alpha’ employees and assume some supervisory or management roles. Suddenly, it seems sudden to the producer, that he or she is surrounded by a large number of employees, has a payroll larger than his personal compensation and he again finds himself being called upon to do management, personnel, carrier and administrative tasks rather than processing policies and endorsements, and he can’t do what he does best, sell and maintain customer relationships.
Common Situation Two
Dad gives ‘Junior’ (son or daughter) work to do in the agency to earn some money in high school. ‘Junior’ goes off to college never intending to return to the family agency. When schooling is complete and Junior finds life on the outside more challenging and less rewarding than expected, he also finds himself drawn to the agency into which he can easily fit, pleasing Mom and Dad immensely and making an adequate compensation level without the strain of competing against others for the job. The offspring either starts at the bottom and works their way into a more competent role in the agency. By the time they have been in the agency five or ten years, they absolutely know that they could run the agency better than their parents. A few years after that, after having earned their wings by selling, servicing and/or administering the agency, or just by spending enough time in the agency, parents decide to pull back and let ‘junior’ take the reins. Junior eventually takes control and either buys out the parents or manages as defacto owner until the time comes that he inherits the agency.
In each case, above, the agent in question never intended to become a business owner responsive to personnel disputes, argumentative clients, pushy suppliers and unappreciative family and employees. He has become the ACCIDENTAL OWNER. If the agent was a good salesman once, he misses the simplicity of visiting prospects, selling them on using his services and getting paid for the successes. If he was never a salesperson, the agent wonders for the rest of his career whether he made the right decision and why he is burdened with all of the worries and responsibilities of ownership and management.
The agents in these two examples are not lazy. They are not stupid. They have simply evolved into agency owners without, necessarily, desiring or expecting that end result.
Unfortunately, the ramifications of the ‘Accidental Owner’ is discomfort with the job, dissatisfaction and, often, disillusion and depression. We have encountered Accidental Owners during our 42 years working with agents who were making $500,000 /year and hating every minute of their careers. We knew more than one that evolved alcohol, drug and other personal problems that in a few cases resulted in total personal and business collapse and even in death.
The common trait of the Accidental Owner is a relatively low self-esteem that reflects itself by ‘acting out.’ This could be demonstrated by repulsive or abusive management techniques, overly-gregarious natures that are more shallow than sincere, or changeable management philosophies (the members of the Idea-of-the-Month Club).
Like a teenager forced to go to school in the Fall, the Accidental Owner doesn’t enjoy the ownership role, even though he understands it and knows it has to be done. He doesn’t like, and sometimes can’t tolerate, the record-keeping that is a keystone of good manager in any business. He firmly believes that no one can “Plan” or budget a business because it is easier to credit luck when business is good and blame fate and everyone else when business is poor.
If the agency is large enough to support the role, the Accidental Owner hires an operations manager. If it’s not large enough, he seeks merger with another agent who is more amenable to management tasks. If he isn’t large enough or motivated enough to do either, he simply becomes embittered over the tasks he is forced to do and performs them when he has to in order to keep the agency operating.
If you came into agency ownership in one of the ways above, or if you actually wanted to be an owner/manager and found that the role was not suited to your personality, there are solutions that will permit you to maintain the pleasant parts of your career without requiring you to perform tasks for which you are not suited. We mentioned two, above.
One of the motivators of growth for the Accidental Owner is the desire to generate sufficient revenue to sponsor a competent manager to oversee the administration of the agency while the agent performs the sales and relationship tasks that should be in the owner’s domain. There is no magic revenue mark that signifies sufficient revenue to hire a manager. That mark is unique to each agency and is found when the owner can continue to support himself and still have sufficient profits to devote a full time manager to the necessary tasks.
Agents who are not large enough to sponsor a manager or who desire greater profits more than a pleasant career might find the same result from a constructive merger with another agent who is more attuned to management while our Accidental Owner can direct his attention to sales and relationships. In this way the agency grows by merger, enjoys the profits generated from the economies of scale and, most importantly, it finds a matching manager to the agency’s needs.
Unfortunately, we still encounter the worst of cases, the agent who doesn’t want to part with enough revenue to hire a manager or doesn’t trust anyone else to manage and doesn’t want to share ownership, even though it means that the agency becomes a larger fish in a much larger pond. Ego sometimes rules, and the Accidental Owner is sometimes fearful of sharing ownership. These agents are miserable until they can’t stand it any longer and they sell out. Sometimes they wait until retirement is an appropriate alternative. But each year we see agents who still have many more productive years in their careers selling down, selling out or merging simply because they don’t enjoy their jobs.
A key to converting from Accidental Ownership to the happy, satisfied, professional insurance agency owners is to find the role in the agency that makes you happiest and is most productive to you and to your business and concentrate on that role. Hire, merge, or promote from within the people who can better accomplish those tasks that fall to agency management, but are not either your strengths or pleasing to you. You can still be productive and will probably be much more successful in business by doing what you enjoy, rather than what is forced upon you.
A final caution – every agency employee, including the owners, must have a productive role in the agency. You are LOST if you feel you have “paid your dues” and can now coast while others produce, service, manage and administer the agency. We have all seen agency owners who no longer manage a book of business, have managers to run the operation and/or partners to take care of the agency growth, carrier and client relationships. This is not a healthy situation for an agency. It is like milking cows without feeding them or maintaining the equipment that keeps the cattle productive, assuming that they will get all they need from grazing in the pasture. You may maximize profits for a short while. But eventually, the milk will diminish, the cows will dry up and the farm will become worthless. It is better to sell the agency and get its full value while it is in a growth mode than to reign over a ‘maintenance agency’ and watch its value erode each year.
“A shepherd who loves his job will lead a happier and more fulfilled life than a king who hates his role.”