Fail. Learn. Grow. Repeat. Celebrate.

Does agency size determine success? Shane and Tonya break down the challenges of scaling, the myths around agency size, and why success isn’t one-size-fits-all. In this special anniversary episode, they reflect back on lessons learned over the last three years on IA Forward, and what it really takes to build an agency that works for you long-term. 

IA Forward to can help you take your agency from good to great. Learn more at iaforward.com, and follow IA Forward on LinkedIn, Facebook, and Instagram.

Transcript

Announcer: [00:00:00] This is IA Forward, your playbook for success as an independent insurance agent here to help you knock it out of the ballpark are your hosts, Shane Tatum and Tonya Lied.  

Tonya: Welcome to a very special celebratory episode of IA Forward. Shane, happy three year IA Forward podcastiversary.  

Shane: Happy anniversary. 

That feels like a long time in podcast world. Is that a long time?  

Tonya: Very long time in podcast world. Less than 5 percent of podcasts make it to three years.  

Shane: Wow. That's pretty good. It's worth celebrating. I thought you were just making stuff up to have a celebration.  

Tonya: There is that too. I'm always up for giving a good party, but this is really something to celebrate. 

And I went back and listened to our first podcast, which was February the 18th of 2022. And it was a little short one. We've gotten a bit more long winded since then, [00:01:00] but it was really interesting to go back and listen to that and listen to what our original vision was, and we've stayed on task, which for two marketing people within the independent channel. 

Is very impressive. We set our goals. We stayed on point and we followed. It has evolved since then. But really and truly, you know, we set out with this goal of introducing the independent agency channel to the world to wanting to help independent agents be successful and to talk about this idea Of the playbook, and how you go in, you have a plan, and your playbook evolves, but you're still staying true to who you are. 

And we've done that for three years, and that's exciting to me.  

Shane: It's shocking, actually. It's not just exciting, it's shocking, because I don't know that I've, outside of being a [00:02:00] husband and a father, I'm not sure I've done anything consistently for three years, if I really had to think about it, especially work oriented. 

I've been doing the same work for the same company, obviously family company for 29 consecutive years, but I've done a lot of different things within those 29 years and it's very difficult for me to stay on that original path and it's Even though I talk about that with agents all the time, just run the race, run the marathon, don't run the sprint, play the infinite game. 

I talk about all those things. It's like the coach, the really great player that is not the greatest coach in the world, like the, the superstar. There's a reason that Derek Jeter's not coaching. There's a reason that Michael Jordan's not coaching. And some of the greatest coaches out there are Not from being the greatest player about that one, about this idea of telling agents, Hey, this is what you need to do. 

It doesn't always mean I'm the best at doing it. It's [00:03:00] actually looking at that through the lens of my failure that leads me down that path of helping agents understand what they need to do to get better and grow their business.  

Tonya: What you just said is so interesting to me, because one of the things that you threw out in our very first episode was being an expert does not mean that you're perfect all the time, that being an expert means that you have failed a lot. 

Shane: It's easy for me to talk about failure. What does that say about my business career? There's been a lot of failure. We celebrate that in the Walt Disney examples. The Ray Kroc McDonald's example, he was what, 52, 54, 56, somewhere in his fifties when he discovered the McDonald's Brothers and there's so much to the failure process if you learn from it, that will help you be so much more successful and help others around you, especially if you're in a leadership position, agency owners are obviously in a leadership position, [00:04:00] so it's so much more helpful to Relate to people that work for you to other business owners when you have gone through it and you have actually failed. 

It's very difficult if everything you've done has turned to gold. If everything you've done, every venture you've been in has never failed, nothing but success. It's very difficult. For people to relate to that, so I'm going to embrace that failure as I was doing three years ago, continue to do today. I will always talk about our failures because I just think they're that important. 

And I understand that I'm talking about those failures in hopes that others don't have to fail as much. But I also know that people are still going to have some failures and it's okay. Let's call them micro failures, hopefully. That would be the goal is just not failing at the same level as maybe I did. 

Tonya: Our first episode, we talked about failure quite a bit [00:05:00] and talked about failing forward. That's one of the I forward ideas was that yes, we are going to fail, but failing forward is key to being successful long term and winning the infinite game.  

Shane: I talk about Not losing but learning and we talk about not failing to just fail failing forward is that's that learning aspect That's really important. 

We should always have that in mind. What can we learn from this recently started? a new Kansas Jayhawks softball season every weekend in February is about learning is about getting better It's about being better the next game and I talked to my daughter about hey focus on winning the pitch Offensive or defensive win the pitch if you win the pitch and you win enough pitches you win the at bat if you win enough at bats You win the inning. 

If you win the inning, you win the game. You win enough games. You get to the postseason. It's the little things [00:06:00] that matter. So much of this agency ownership leap from producer to agency ownership that we talk about so much. It is really about doing the little things well.  

Tonya: Which leads us to today's topic. 

Shane: Of course it does. And  

Tonya: since we are having our celebration of three years podcast, I decided to make you mad today. You can't make me mad  

Shane: because darkness cannot overcome the light. Light overcomes the darkness. You cannot do that to me today because I am going to bring positive energy. Are you sure about that? 

A hundred percent.  

Tonya: Today's topic is some agencies are small for a  

Shane: reason. Dang it, Tonya. That doesn't make me mad. Now, the origination of that makes me mad because it was an aggravating point in my career. I had an insurance company executive tell me that. It was the first iteration of us trying to get this company to come on board and be a part of our [00:07:00] offerings to What started out as small agents, we originated in the late nineties as a offering market access offering to small independent agencies throughout the non Metro areas of Texas. 

How's that for specificity? Talk about a market area. We're going to market to small independent agencies in non Metro, non suburban, so rural Texas. And didn't really think about things in the big scheme of things. It  

Tonya: was before market access was a thing. We were actually one of the very first market access groups to do this. 

And the first one for some of the big boys to say yes to.  

Shane: We were. And It's specifically in the South Central U. S. There was some Northeast stuff going on in the 80s and 90s. But yes, that's true. We were doing this, and the way we were going about this, that was the concept, and we were a small town agency. 

We had a lot [00:08:00] of carriers. And we thought, originally it started out with this co op idea. We should help other small agencies around East Texas. And East Texas, geographically, is actually a big place, okay? East Texas, though, that runs from the Red River, Oklahoma border, down to southeast, just north of Houston, it's a lot of geographic territory. 

And so there were enough small towns and small independent agencies across East Texas. That this actually made made a lot of sense for us to do this. I had a carrier executive that was dismissing our model basically is what was happening and saying, Hey, Shane, small agencies are small for a reason. It was a diss since we just come off the. 

I'm Kip because I got young, I got 20 something year old daughters and so I know that we just went through a Super Bowl and the big talk is the Kendrick Lamar diss track and all that stuff. So I got dissed in the late 90s way before the diss track became popular. [00:09:00] When you think about just the way that was presented to me. 

This dude just fueled my fire. It made me so aggravated and so frustrated because this particular executive was part of that protectionism crowd that was rampant in the 80s and 90s within the independent agency distribution channel at the carrier level. And carriers have come a long ways, but back in the 80s and 90s, carriers were set up in these protection modes where they would work with a large independent agency in a community, and they would not allow anyone else to have a contract and therefore. 

That would create some market dominance for that larger independent agency and therefore keep the smaller agencies at bay, so to speak. And this idea of small agencies are small for a reason fueled my fire.  

Tonya: Since then, this idea of small [00:10:00] agencies are small for a reason, we've learned that's true.  

Shane: It actually is true. 

Fast forward, sometimes it's true by design. While there are some agencies that are small for a reason, and that reason is they're not really sure how to grow or how to take the next step, there are some pretty decent percentage that are building insurance practices. And they are intentionally small because that's what they're after. 

And I see a lot of stuff on social media that is negatively speaking to this type of mindset. And I want to be one of the individuals that says, Hey, it's okay. Be who you want to be if we don't watch out for That social media comparison game because it's not any different in the peer to peer world of running a small business or running an independent agency Everybody talks about the really [00:11:00] successful growing large agency But the fact of the matter is that 86 percent of independent agencies across the country have less than 10 employees. 

There's a lot of independent small agencies out there, and it's 100 percent okay to actually design your agency. To be this way or to be small intentionally, which was not the original statement that was made to me. I want to dispel the myth that small agencies equal unsuccessful agencies. That is not true. 

Just because an agency is smaller doesn't mean they're not successful.  

Tonya: Not only that, when a business gets into having more than 80 employees. So if you have an agency that has two employees or four employees, or even if you're a solo practitioner, it could be that you're having more financial success, you're [00:12:00] taking more money home than you would if you had 10, 12, 15 employees. 

Plus, you don't have nearly the headache, somebody, you That owns a large agency has because of their number of employees.  

Shane: Yes. And look, I've talked about no man's land, no man's land. Sometimes it's premium based. It's more employee based now, especially for this discussion, three, four, five employees. No problem. 

Certainly, one to five employees, one to four employees, insurance practice, you know what's going on with everybody. Everybody's like family, even if they're not. And you understand what's going on with your clients. You're in it. And I'm going to say you're still working in the business, okay? You're not working on your business. 

That's okay. I know we talk about getting to the point of working on your business. That's if you're going to grow to this next level. And I just firmly believe that they're the two best [00:13:00] opportunities within the independent agency realm is to be a practice. Okay. A small insurance practice, maybe even some niche oriented stuff going on there, or you've got a power through to the point that you are on this enterprise building track. 

You're not going to stay in this. mid sized, no man's land scenario, because this is the reality of our agency network. My data is coming from two sample sets. One is our agency network. The other is the industry as a whole. And they do tend to be similar, even though our agency network has several personal lines focused agents and the industry itself has some commercial lines focused agents in it. 

There's some similar patterns there. Agency owners with, say, three, four, five employees are making more money as an owner, a bigger [00:14:00] return, a better financial scenario than those agencies with seven, eight, nine employees. Just a fact, some of these agents that are solopreneurs that are doing the one or two VAs, they're making a lot of money. 

Five, 600, 000 a year, 700, 000 a year. This is a lot of money for a business that returns 85 to 90 percent of its customers next year. They can count on that. And they're incredible and they're efficient and they're automating and they're using tools. It is exciting to watch. There's agents that have seven, eight employees making 20 percent of that. 

And the question becomes, who's more successful? Because if you just look at the outward perspective, it's one agent's running 5 6 million with themselves and a couple of VAs, and the other one's running 7 8 million with seven employees. Who's making more money? Because we all know that labor cost and the independent agency [00:15:00] system is the largest P& L expense item. 

And that's where I'm getting the concept of watch out for no man's land. Being small intentionally is okay. It's a myth that that is unsuccessful. That is a myth. Let that go. Being a three, three and a half, four million dollar agency and managing that with one or two people or yourself and a VA. Is highly financially successful if you're going to grow the business beyond that for more people and it requires more stuff, it requires an office manager. 

It requires a even if you're virtual, it requires a virtual office manager. People got to keep up with stuff. You got to have procedures. You got to have works no longer. Okay, that it's stuck in your head requires that you do some. Mm hmm. foundational work to push through to where you have a personal lines manager, maybe a commercial lines [00:16:00] manager. 

It just becomes more than you can personally handle when you get into that seven, eight, 10 and above range as far as number of employees. And you need to be able to have a plan if you're going to push through that no man's land's middle. You've got to have a plan for how you're going to push through to the other side, and it's going to be painful for a little bit. 

It's growth. That's why they call it growth pains. But at some point, you're going to be staring at the wall, and you're going to have to make a decision. Do I pull back to the insurance practice level, or do I push on through to the enterprise level? Either decision is going to equal success. What is going to be unsuccessful is staying where you are in the middle. 

Tonya: Staying small for a reason, fantastic. What are we saying to the person that Wants to get big, wants to at least have a medium sized agency, but everything online [00:17:00] about M& A and what people are getting for their agencies, and they want to grow their independent agency empire so they can retire at 32 and play golf and deep sea fish for the rest of their lives. 

Shane: If you have the skill set, the drive. The desire to build that enterprise and sell it at 32 or 35 or even 40, maybe even 50. You're not going to go retire to the beach and fish forever because you can't. Look at all of your celebrity wealthy people. They can't sit on the sidelines. They get involved in something else. 

And so number one, I want to ask you the question of what are you going to really do because people asked me that 20 years ago as we were growing and things were blowing up positively and revenue was flowing and [00:18:00] premium growth was happening and this was before I found myself in no man's land and Didn't know what it was and didn't recognize it until it was too late. 

And it was like, what are you going to do? And I'm like, man, I'm going to, we're going to blow this thing up. And we're going to, we're going to spin off some divisions and we're going to sell it. We're going to, we're going to go to the beach. We're going to play golf. We're going to fish. We're going to do what, that would have never worked for me. 

If that's what you want to do, then I'm cheering for you and I'm cheering you on what I want to do is back to that sort of my failures, learn from my failures, understand that the amount of energy and work that you're going to put in to growing through and building this enterprise level organization, what you're going to find. 

Is that there's steps, there's levels and layers to this building of an enterprise, you end up realizing that you need things, you need people, you need ways to do things, you need to be able [00:19:00] to tell that person, call it employee number 35 to make this very real for me right now, employee number 35, please. 

That you talk to maybe once a month as the founder CEO needs to know what you would do if you were making the decision they're trying to make with a customer that's sitting in front of them or on the phone with them that they're having a problem with their account. What are they going to do? You want them to make a decision that you would make. 

We always talk about core values and making decisions through our core values. What I really want is I want you to build out the foundation to help people that are going to be employed by you make decisions. That you would make without having to say, Hey, Charlie, what do I need to do in this? Because if you have infrastructure and you have hierarchy, and [00:20:00] it's that game of you start with a statement on one one in the circle, and it goes around the circle. 

And by the time it gets to the other end of the circle or the end of the line, the story, the statement has completely changed. That's what's gonna happen. Okay? You're going to be so far removed from the customer that you've got to spend a ton of energy building the foundation, building the infrastructure. 

You're going to have to move from working in the business every day to working on the business every day, which means you need to hire really well. You need to be able to afford to hire really well. You need to be able to build bridges through this process because you're not going to have everybody day one that you need. 

You're going to be putting pieces in place, unless you go out and borrow a bunch of money or go out and find an investor, which I'm not advocating either one of those. And so I always tell people, start with your org chart. And build out a finished [00:21:00] or close to as finished of an org chart as you can dream having. 

It doesn't matter if you want to be a both personal and commercial lines agency. If you want to have employee benefits or life and health, if you want to have all these different things, if you just want to be personalized driven or just commercial lines driven, build out the org chart that fits your dream. 

And then put your name in all those blocks because you're the only employee or maybe if you have a couple of employees when you're listening to this and you're trying to get to that dream, put a few people that you have in the blocks that they're in those people may be in a couple of blocks when we had five people. 

We had a built out org chart and we were all in a bunch of different blocks. And then just slowly start working to remove your name from those blocks. Hire for the things you hate doing, that you suck at, that you're not good at. Hire for all those things first. And get yourself [00:22:00] to where you're working more and more on the business, month in and month out. 

Tonya: Nobody can do it as good as I can do it.  

Shane: This is a true statement.  

Tonya: And you're not going to say pot meet kettle, waiting for you to say it.  

Shane: This is the myth busting podcast. That is true. Nobody will ever be able to do it as good as you can do it. Because then you're the founder, you're the builder, you're the one that started it, you put the money there, you did the sweat equity, I'm okay with that, but that's not your goal. 

Your goal is to get someone who can do it as 80 percent as good as you. Let's just embrace and own that nobody's gonna be able to do it as good as you. Get it out of your head, put it on paper, write a document. It doesn't have to be perfect. Done is better than perfect. Tonya is tired of hearing me say that. 

Done is better than perfect. And when you're a perfectionist, which a lot of us are, that's really hard to get our head around. You want me to lower the [00:23:00] standard? No, I'm not telling you to lower the standard. I'm telling you what reality is. Reality is Nobody's going to be able to do it as good as you, but somebody and a group of people, a group of a lot of people are going to be able to do it. 

80 percent is good issue. Okay. So let's embrace that reality. Let's build the foundation of workflow and core values and. You know how you want things to happen, how you want things to work and then help those people get to 80 percent as good as you. And you may start out with them being 20 percent as good as you. 

You're looking to hire on that capability, that skill set, that potential. I see a lot of people hire. With none of this in place and then they just expect that person to take the load off of them And it doesn't work and they get mad and they fire them. They were no good Let me tell you I know that there's a lot of people that are getting hired in the workforce today That are not as good as quote. 

They used [00:24:00] to be people don't want to work a big percentage of the people that agency owners are getting frustrated with when they hire them are actually not bad. It's us. It's not you. It's me. This is the reality. If an employee that you've hired is not doing well, check yourself and whether you've given them the right instructions, the clarity, the right things to do, the way to do it, the way you want them to do it. 

You can't just hire them. Because they have a license and say they have experience and then have this expectation that they're going to do it 80 percent as good as you. You've got to build and develop that and invest in that and that's part of building the enterprise. Otherwise, don't do it. Be a practice. 

Be an insurance practice. Make money. Have a great lifestyle. Watch all your kids activities. Go on vacations and then enjoy life. If you want to build enterprise, unfortunately, you got to do the hard stuff, though. [00:25:00] You got to get things out of your head. You got to make it to where. People can do the things you want them to do and meet your expectations, but you got to tell them, you got to tell them the expectations somehow  

Tonya: if you don't have time to invest in people and help those people be their best selves, you don't have time to have employees. 

Shane: 100 percent is exactly right there. And I know we're preaching here, but that's true. And that's what we see. We see a lot of agents like I just people can't work for me. I can't hire people. I. There's nobody wants to work anymore. I don't see that. I'm sorry. Like today, that is not my personal experience. 

My personal experience is we don't have a good structure to train people. We don't have a good structure to develop people. It's not that people don't want to work or can't work or aren't any good at their work. In our industry, in the independent agency channel, we just have this thing where we try to shortcut and we hire maybe too late because [00:26:00] we've created a standard of living for ourselves. 

So we say we can't afford anyone. You know, I have this conversation with people all the time that start agencies. And they're generating 200, 000 a year in revenue and they're like, I can't afford to hire anybody. I was like, yeah, because your budget is 200, 000 for your personal income. Like you're not building a business. 

You built yourself a job. Like you've got to set your budget reasonably while you're building your business. You've got to find a way to do that. And if you have 200, 000 a year in revenue, you don't need to take 200, 000 and put it in your pocket. You got taxes to pay. Set yourself a disciplined line and say, I'm gonna get to a hundred thousand. 

I'm gonna get to 80,000. You're investing in yourself when you do that, and that's where just wanna like shake some people and go, don't tell me you can't afford anyone at four or $500,000 a year in revenue. You're not wanting to build a business, you're building an insurance practice. Hey, no problem [00:27:00] then don't hire anybody. 

Hire some virtual assistants to help you with some stuff. You still got to tell those virtual assistants what you want them to do though. You got to be specific. That's one of our agency network works with a VA provider by the name of IE Blueprint. And one of the things that we've learned with our relationship with Bo Pilgrim and IE Blueprint is very specific instructions are required. 

You can't just say, I'm going to hire this virtual assistant and people selling this are lying. They're, they're just lying. People selling experienced insurance, virtual assistants, okay. From another country. Number one, their experience with another agency doesn't mean that they're going to do it the way you want them to. 

That's fine. That's great. Maybe they have experience on your management system and maybe that's what we're going to call experience. But agency owners look at that and go. Oh, I can just quickly hire this virtual assistant and they're going to give me back [00:28:00] 20 percent of my time. That's not the way it works. 

The way it works is you have to know what you want them to do, and you have to give them very specific instructions on how you want them to accomplish this. And they are very good at repetitive tasks. They're very good at things that are unchanging. Okay, that they can do over and over. And you have some of this in your life. 

Don't, don't misunderstand me. You have enough of this to make the investment worth it. But I see a lot of agents going through two, three, four virtual assistants and saying none of these virtual assistants are any good. At some point, you got to look at yourself and go, wait a minute. All of them can't be bad. 

At some point, it's gotta be me. Let's just compare this to if you are on your fifth person of the year and none of them are any good, are they really the boyfriend or girlfriend? Or do you need to work on yourself a little better? Which way is it? [00:29:00] At some point, I use this in travel ball analogy, These parents and kids that would hop teams every six months, and they would be on like five teams in two years. 

And eventually you're like, hey man, maybe it's not the teams, the coaches, the other players, maybe it's y'all. Maybe you need to do a gut check. And nobody wants to tell people that because it's mean and it's Sometimes people need to be told that sometimes the truth needs to be told, and so that's where this is. 

This is where what you need to be able to do is look at who you are and what your expectations are. You don't have to lower your expectations, but you gotta clearly define and teach the expectations.  

Tonya: So happy three year podcastiversary. Thank you so much for listening to us. We love what we do. We love sharing our knowledge, our expertise that, that we have both learned from failing, and [00:30:00] we appreciate you for listening to us. 

Shane: Hey, thank you for letting me preach at you today. Thank you for letting me talk at you for three years. This is. It's so much fun to us. I love doing it. I hope you learned something from it. I hope we're doing something good for you when we talk every week. Just very thankful for the listeners out there and for giving us this three year milestone and hopefully we'll be going at it for another three years and continuing to celebrate every February. 

Tonya: I'm going to leave us today with this quote from Pele. Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, love of what you are doing. 

Shane: Attitudes of choice. Make a great one.  

Announcer: Bye y'all. At the Integra Partner Network, we understand that carrier access is the key to your agency's success. 

That's why Integra offers direct access to top rated personal and commercial carriers, ensuring your agency thrives in today's challenging market. And with our [00:31:00] comprehensive resources, profit sharing and bonus opportunities, technology and peer support, all while you retain a hundred percent of your book with no penalties to exit. 

Integra is ready to empower you and your agency to find sustained growth. Find your way to Integra. Visit IntegraPartnerNetwork. com today. That's Integra Partner Network. Dot com.