Striking out on your own as a salesperson can be nerve-wracking. But if you're intent on doing it and want to minimize your risk, consider setting up an insurance agency.
Agency owners are in high demand at Allstate. The insurance company plans to bring on somewhere between 1,300 and 1,500 agents next year, according to Tom Hall, assistant vice president of talent acquisition at the company.
Allstate is hiring for agency owners in all 50 states, except Massachusetts. "It's really dependent on the department of insurance in specific states," said Will Owens, senior manager in the human resources division.
But if you're anywhere but the Bay State, the company is shopping. Owens said that growth is there in all lines of business, from automotive to commercial to home. The company looks for individuals with some prior entrepreneurial experience, and a business background. You also need to have property, casualty and health insurance licenses.
If you manage to stick around, you also have to complete FINRA licenses, as well as the Series 6 and 63, within 24 months.
Though owners are generally pretty independent, the company does keep an eye on their balance sheets. "There are sales quotas that must be reached in the first year, and some other requirements that have to be met," said Owens.
Allstate also offer training and education courses for agency owners and their employees. That includes going to corporate headquarters in Northbrook, Ill., to get certificates. Once you've completed those, you get a $3,000 "education bonus" -- an incentive to make sure you complete the courses. There is also once-a-quarter training for salespeople.
But while Allstate officials say you don't need any specific sales experience to hang your own shingle, Omar Zaki, an agency owner in Riverside, Calif. said that a background in account responsibility and sales positions definitely helped when he set up his own shop in 2007. "Those skill sets are pretty important."
But above all else, to strike out on your own, you need the monetary wherewithal.
Agency owners have to provide $50,000 of liquid capital in their account that can be used for rent, facilities and hiring. But both Owens and Hall pointed out that the money is not a fee that goes to Allstate. "You are the one who will use it to set up your business," said Hall.
But why take on the added risk?
"The economic interest," said Owens. "If you're successful, you make a lot of money, and you're creating wealth. Potentially, you can sell the agency down the road for a lot more than [it took for] you [to] set it up in the first place."
And if the agency is not successful? Allstate offers a termination package that is one-and-a-half times the value of the book of business.
Zaki, who began his agency on the West Coast after 20 years in corporate America, said he did it because he wanted to work by himself, without the encumbrance of a superior. "I wanted to own it and I wanted it to be mine," he said.
And it's a cash cow that keeps producing. When Zaki signs on a home insurance customer, they often turn to him for their automotive insurance needs, then their health insurance needs and so on.
"At the end of the day, we want them to trust us enough to be able to insure their most precious asset," he said. "We want life." Zaki's agency currently employs four full-time agents, people he said he didn't advertise for, but just met and instantly liked.
Another thing that makes the profession so lucrative is the residual business. Every time a policy renews, the owners get a check. So if you've retained customers, there is a constant inflow of money even if new business is down.
It's also the natural high that comes from selling without a manager on your back. "It's like an entrepreneur, except you've got this huge company behind you," said Hall. "You're not cleaning the French fry maker at 11 o'clock at night. You determine your hours."
Write to Shareen Pathak