Self Employed vs Work for a company

[Odessian]

Hi Guys

This is my first post here, and I hope to get advice from people who have already been in my shoes. My partner and I run a small company in S.Ca. We are completely different people and went to business not even knowing each other well. My partner is a great guy, but he is not a good agent, doesn't know coverages well, and doesn't really care about self improvement. I, on the other hand, do all the quoting, marketing, business development and part of the service. However, my partner used to bring in more business. All in all i feel, that we will not be able to grow the company much further (we have 650,000 in GP in 18 month). Now, a week ago, i received a call from a recruiter and she offered me an interesting position in a large insurance/Risk Management company. I went through the interview and got the offer. Again, i wasn't really intrested in a job. Now, i am debating of what should i do: I know for a fact that i don't want to stay in business with my partner. I, in my opinion, have the following options: Buy my partner out (i have a good feeling he will sell it to me) and continue on my own, sell the company and work for somebody else. I really don't know what to do, as i feel by selling the company i set myself for a failure. On the other hand, I just got married, my wife is finishing her degree and we need a stable paycheck. What would you do?

[Big Dog]

As to the position with the "large insurance/Risk Management company", if it's with one of the alphabet houses (Aon, Marsh, Willis, Gallagher, Brown and Brown, USI, etc.) proceed with caution. Several of these have outsourced a lot of their infrastructure (IT, back office support, invoicing/certs/auto ID cards, policy review, etc.) and you'll find the morale at these places to be quite low.

If it's a mid/large regional broker, or even a privately held national broker (i.e. Lockton, etc.), you might have a better chance at growing your book of business.

It's extremely difficult to make it on your own as a one (or even two) person shop, especially in SoCal (I used to live there, then relocated to Texas). One option might be to have your partner buy you out, or sell to someone else.

If you've got questions, feel free to PM me. I used to work for one of the alphabet houses named above, and previously worked as an underwriter in SoCal, so I'm very familiar with most of the agencies.

[Porter]

I would say keep the agency. You have been in business for 18 months and you are about to turn the corner. The first couple years are the toughest. If the other partner is not pulling his weight buy him out.

I think it would suck having to get a real job with a boss after owning an agency. Keep the agency and fix the problem partner.

That is what I would do.

[kevinraz]

Keep the agency! You're already doing pretty well to have that much premium in 18 months. You are going to make it to the critical 2 year mark.

Buy the partner out, get some staff, grow it moderately for a few years and you'll be a king. So many agencies are selling out or folding, there is room for more.

Good luck!

[volstrike3]

Your crazy if you go to work for a large agency. Buy out your partner.

[meytai]

Stick with the your own agency

Keep the vision alive

[Odessian]

Volstrike why would it be crazy? Decisions, Decisions

[Honeybee]

Hi Odessian,

Tough choices now at this critical time. My husband ran his own claims agency and I ran my own P.I. agency for some years. We both opted to go in-house for large companies, but then our career choices are slightly different to yours, albeit in the same industry.

Considering your business, I would seriously consider buying your partner out. If you do not wish to be a "one person band" then try to find a qualified business partner with the same goals, ideals and work ethic as you. It's rare to find someone who is truly dedicated, so choose wisely and be sure to protect yourself with a good contract.

Going in-house with a large firm has it's own risks, including outsourcing, lack of control and lack of direction, poor management (which amazingly abounds at these firms), politics, etc. Believe it or not, common sense is not so common in these large agencies whether AON, Marsh, etc. and a good book of business does not always insulate you from these changes.

Overall, I believe that being an independent is the way to go as long as you have sufficient capital and support. If you and your wife are planning to have children, I'd suggest partnering with someone who can share the daily responsibilities, otherwise you will have no personal life and your family will ultimately bear the brunt of this.

Good Luck in your decision.

[SEANMYERS]

I was in the same position as you.....hang in there/you'll get over the hump...

[volstrike3]

Sorry I took so long to respond. I think you would be crazy because you have already done the hard part... going out on your own and survived the first 18 months. Buy out your partner and make it into your third year with $1.2M in written premium and you will be a happy man. I have never known a business owner that sold and was happier as an employee unless they cashed out for big money and were on cruise control... not a position you will be in.

[mhutch69]

Do BOTH! Nothing better than hiring qualified management to run and build your own businesses while you run and build businesses for larger companies.

That is AMerica!