Cracking The “glass Ceiling” – Changing Owner Attitudes

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Cracking The “glass Ceiling” – Changing Owner Attitudes

Many insurance agencies are, in reality, insurance agents making a living who happen to employ one person to a few employees in order to help them manage their clients.  These agencies and agents are called Mom & Pop Shops.  This is not a derogatory term – it describes ‘journeymen’ insurance agents who work alone or who have “helpers,” and who use all of their income not spent in normal business expenses as their ‘fair’ compensation for their efforts.

A relatively few agencies are in the category of professional businesses.  Agencies which devote some of their income each year to profits and earnings, reserved for business development and growth (through acquisitions, through market expansion, through additional support staff, and through adding sales staff).

Two major differences between the Mom & Pop Shop and the Professional Business are the source of growth resources and the state of mind of the owners when they consider spending to grow.

Mom & Pop Shops can and do grow – until they hit the first Glass Ceiling (at about $1 Million revenue).  But when they grow, they do so with a great deal of stress and strain.  Their businesses expand to where they (and their current staff) can’t seem to handle the workload.  The owners worry more about where the money is coming from than whether the expansion can help them grow further because they don’t PLAN for the growth – they are pressured into it.  Some even bemoan how much simpler life was when it was only the agent and a few people. 

Compare this attitude to that of a Professional Agency that sets aside funds each year to sponsor growth (in a variety of ways) and plans (cost/benefit analyses) for both the expense and the growth that will sponsor that expense as well as further growth and profits.

There are a few primary differentiators between the Mom & Pop Shops and the Professional Businesses – and those differences have more to do with owners’ attitudes than with the size of the organization.  We have seen many $1 Million Mom & Pop Shops and more than a few $500,000 (and even smaller) Professional Businesses.  The owners are not having fun in the million dollar Mom & Pop Shops.  They are stressed over their loss of control, the backlogs, lack of attention to the clients as in the past – all the things that define an agency in need of professional management.  Meanwhile, the owners of the small Professional Shops ARE, indeed, are enjoying their lives.  They are in a growth mode and know that while they aren’t making the kind of money (yet) that they deserve and expect, their plans are coming to fruition every year and their “investment” in their businesses are paying them dividends in the expansion of their agencies.

Mom & Pop Shops SPEND money to support their businesses.  Professional Businesses INVEST money in their businesses, and fully expect (and track) progress toward greater profit margins on their growth.

Cracking the Glass Ceiling between the Mom & Pop Shop and the Professional Business is like the difference between a commitment and a contribution.  Consider the involvement of the chicken and the pig to a bacon and egg breakfast.  For the chicken, it’s a contribution – some effort but not the degree of commitment that the pig must make to the dish a success.

The contribution of an agency owner to the support of his agency, whether for sustenance or for growth, is not meager.  It means loaning the agency money or borrowing the money to properly fund the agency’s future.  These owners are straining like a chicken (and for some the pain of the donation is relatively similar).  But for the agency principals who COMMIT to giving up some of their hard-earned profits each year to sponsor the growth of their businesses the sponsorship of that growth is a given, not an option.  They know that substantial growth comes at a cost to them and to their staff unless it’s planned for. 

Planning and commitment is the price they pay to convert their businesses from a Mom & Pop Shop to a professional business.  They could take out a little more money each year, but they choose the long term benefit reaped from a multi-million dollar agency both in annual income for its owners and intrinsic value when they perpetuate their businesses.

We invite you to call us (800-779-2430) or email us ( ) to discuss how to convert your Mom & Pop Shop into a Professional Business.  Our other article in this issue describes the different Glass Ceilings that exist for insurance agencies.  We can help you move your business from level to level.


Al Diamond


Agency Consulting Group, Inc.