by Bert Holtje
You’re probably a pretty good salesperson. You’ll have to be. The business is competitive. But, being a good salesperson is only the first requirement. You have to be a good businessperson. This means that you not only need to know a lot about the routine of running a small business, you also need to know more than a little about the federal and state regulations under which you will operate. We’re not only talking about the tax codes and the laws which define the independent contractor, we’re talking about the skills needed to manage a business — even if you are the only employee.
Far too many agents tell us that they underestimated what it takes to run a sales agency. The owner of a now very successful agency put it this way: “Before I started my agency, I rose through the sales, marketing and corporate ranks of a medium-sized manufacturing firm. I had become general manager of the firm. I had full profit-and-loss responsibility, and I was responsible for running not only the headquarters operation, but two satellite plants. With that kind of experience, I thought that running a sales agency would be a piece of cake. Boy, was I wrong!
“The mistake I made was not realizing that in my early days as an agent I had to do everything. Yes, I hired someone to handle the day-to-day office and bookkeeping operations. But I was still the chief cook and bottle washer. I wasn’t prepared for that. I have to say that it caused no small amount of panic, but I quickly realized that I had to get over my big company and settle down to doing what had to be done. If I had thought about it, I would have prepared a lot more carefully for my role as entrepreneur than I did.”
So, let this be lesson one — running an agency is not like anything you have ever done before. Even if you have run another kind of small business successfully, running an agency is going to take a lot of time to get used to. Running a sales agency, from a business perspective, is not all that different from running most other businesses. The accounting procedures are going to be pretty much standard. The state and local tax and legal requirements are not going to be all that different from most other businesses. And where the differences do occur, dealing with them is not going to throw you for a loop. But, what is going to be a lot different is the mind-set you need to make a go of running a successful sales agency.
Next month, read about the balancing act an agent must perform to keep himself, his principals and his customers happy.