NAILBA Perspectives - May/June 2014 - (Page 32)

XXX nailba's agency successor networking group Money Talks T Have you been identified as the next sitting principal of your agency? The ASNG Planning Team works diligently to reach out to others in the industry who have transition experience and are willing to share what they learned in the process. Contact Rachel Marineau, CMP, NAILBA's Manager of Meetings & Education, at 703.383.3069 or rmarineau@ for more information on the Agency Successor Networking Group. 32 perspectives MAY/JUNE 2014 aking the reins of an agency means taking control of many different pieces: supervising employees, overseeing contracts, and possibly managing property. It also means being responsible for the finances: expenses, revenue, commission, payroll. It can become overwhelming. Earlier this year the Agency Successor Networking Group (ASNG) held a few teleconferences on different aspects of handling the books of a business. As you travel the path toward ownership, take the initiative and become more comfortable with accounting processes. Don't allow yourself to be intimidated. Sign up for a course through a local college; if you don't have the time for an in-person course look to see what online classes might be available. At the very least look up other written resources that will help you with any questions you may have as you go along. Begin reviewing your agency's Profit and Loss (P&L) Statement on a monthly basis. Become familiar with what is listed and how the statement reads. Understand the various parts that fall under each line item. Pay close attention to your Gross Profit; what is your commission income versus renewal income? Keeping these two lines separate, clear, and descriptive will help you immeasurably. When reviewing your P&L take action if you notice your Gross Profit fluctuating by 5% or more. This is a good ratio to start with and can be an indicator that there's something that requires attention. Another important item to stay on top of is your sales. Reviewing this line regularly will help to concretely see when your flow season occurs as well as your busy season. While you might already know when these tend to be, seeing how this impacts your agency's bottom line will help you manage your funds especially during flow seasons. You may also find it helpful to separate out commissions from different years. It's an involved process but it will help you prepare future projections. Consider asking your accountant to prepare a one-page summary that provides a monthly review with the gross profit amount, gross profit with net income, along with year-to-date (YTD) totals. Having this information concisely on one page will provide you with a quick overview when you need to go back and review certain information for specific months. If you have the opportunity, ask the person you'll be succeeding to sit down with you and review all of the financials of your agency together. Make this a regular practice-preferably once a month until you become comfortable. Running the books of a business is very different with many more parts in play than your own individual finances. Talk through all of the parts with the current principal and decide if it is a process that makes sense to you and whether it's a process you intend to keep in place. It's important that the system you use makes sense to you. You will be ultimately responsible for the success of your agency. As you take over the process, make sure you take the time to either train the person who will follow you, or at the very least, make sure the plans you put in to place are easily understood. Making the time to review and understand all the agency finances is the most important thing you can do. Allocate time to go through the books, payroll, etc. It's crucial to the survival of your business. If you need to work with the current accountant to make systems available remotely so you can access them after-hours, do so! Put the necessary pieces in place to make this as easy as possible; it will require quite a bit of your attention while you get the hang of it. Once you feel confident in your abilities to manage and oversee the finances, make sure you maintain an open dialogue with the other officer(s) in your agency.

Table of Contents for the Digital Edition of NAILBA Perspectives - May/June 2014

NAILBA Perspectives - May/June 2014
Chairman’s Corner
CEO Insights
How to Train New Marketing Reps
Reading Ahead
Life Happens
The 3M Formula for BGA Marketing Success
NAILBA Charitable Foundation
Member Profiles
Agency Successor Networking Group
Agency Resources
member Profiles
MDRT Annual Meeting
Legislative Update
Calendar of Events
Index of Advertisers

NAILBA Perspectives - May/June 2014