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...n agent, every transaction is an exercise in process and balancing is not even...

... have $1 of commission minus the cost of operating the agency. A big percentage of that commission income usually goes to expenses other than production. Knowing where the money goes is essential for agencies trying to figure out how much they can afford to pay producers. The worksheet at the end of this article is an easy way to get a snapshot of where your agency stands. It's a good exercise for any agency at any time. It's especially helpful for an agency looking to bring in a new producer, turn around a dwindling profit picture, or boost its value as a going concern. Let's walk through the worksheet. ADMINISTRATIVE EXPENSE Add up the cost of office payroll, rent, light, heat, bad debts, dues, and subscriptions-every agencywide operating expense. Include advertising because the ... figure out how much to pay your producers by asking, What's the agency down the street paying? ' Beware! Pegging compensation to what the competition is doing can be a costly mistake. Your competitors may be paying too much and headed for bankruptcy-or paying too little and riding a merry-go-round in turnover. Every agency is different. Some provide their producers with leads, expense accounts, auto allowances, club memberships, sales management, and other costly direct-sales support. Others don't. Most agencies provide service support and invest in other retention-building tools. Some agencies are highly efficient and have low operating expenses. Others have very high overhead. Most are somewhere in between. A few agencies make the fatal mistake of thinking they have $1 of commission to split with producers. They don't. They have ...

...uccessful lead-management system exercises discipline daily. Replies are quick...