by Bert Holtje
It’s Necessary to Have Financial Common Sense
The beginning agent is often imbued with an unrealistic sense of what it takes to initiate an agency in terms of financial investment. A business plan that does not include the startup and more importantly the daily operating costs may not make it to break-even day.
A careful analysis and some seat-of-the-pants guesstimates are involved. Fixed and variable costs were carefully mapped out in advance by those who became successful agents. The real skill, however, for those who made it came in forecasting the daily operating costs and the amount of revenue that would be realized within a given period.
Many successful agents began with one or two principals already lined up; others had a side business or an independent income to weather the early months of their fledgling agency. Getting by in those early days by hoarding resources, using available finances wisely and gradually building on a small base was the secret to early survival and eventual success for many in the rep business.
Next month, read about reasons people have for starting agencies.