Business Plan Final Final 511t5f

State Farm Business Plan Jason Nowicki

TABLE OF CONTENTS

• Building an Agency o Agency Vision o Investing in myself o Capital investment o Team Development Hiring Training o Production Goals Auto Fire Life Health Bank & Mutual Funds o Business Goals o Local Market

page 3 pages 4, 5 page 6 page 7 pages 8, 9 page 10 pages 11, 12 page 13 page 14 page 15 pages 16, 17 pages 18, 19 pages 20, 21

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AGENCY VISION

• Our Mission is to promote a professional, knowledgeable, and upbeat office environment built around meeting with clients daily to ensure we help them realize a road map for life’s unexpected turns.

• Our Vision is to aspire to be the first choice on the Greater Northwest Indiana (Lake County) area for all your insurance and financial needs. My team and I will continue to grow and strive to sur your service expectations in every encounter while treating you and your family with the respect you deserve. With integrity as our offices bedrock principle we will honorably serve our clients and the community.

• My Team will be licensed to sell all available non-securities products. They will provide prompt and friendly client service with accuracy. Each team member’s top priority will be becoming the customer’s first and best choice for insurance and financial services.

• My Office will be clean and professional in appearance. It will be a place of business where our client and their families feel at home.

• Aspirations to employ team who will become dynamic State Farm Agents in whatever community they choose.

• Personal Core Value it all starts with integrity.

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INVESTING IN MYSELF • Leadership o Bob McClellan State Farm Agency

Team leader in sales training Found and hired new employee for the office who is a top producer

o Raffin Construction Company

Foreman in the construction layout division

Responsible for multiple carpenters to get the job done in a timely manner o Robert A. Nowicki & Associates

Field Crew Chief Lead draftsmen for the AutoCad Department Responsible for overseeing 4 crews

• Drive o Bob McClellan State Farm Agency

Lead DAFO in raw new auto for 2011 (890 raw new auto) Lead TICA front run for production in 2011 & 2012 Top 100 New Agency (Number 71) 60-70 hour work weeks for 2011 (Office is still open 7 days per week) Lead team in sales since office opened (Averaged 65.42 App’s per month overall) Office made the Ambassador travel trip for 2011 (Level 1)

o Raffin Construction Company

Trained fellow carpenters on layout systems Always hit our goals to complete a project

o Robert A. Nowicki & Associates

Made the company very profitable for many years Dealt with clients on a regular basis

• Make a Difference o State Farm

Life insurance changes lives, I have seen it firsthand with deaths in my family Disability insurance changes lives, from my Aunts disability issues which allowed her to keep their house, due to having mortgage protection Protect peoples golden years with State Farm Financial products instead of having them invest with people that may turn out to be less than trustworthy

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o Money



Sponsor youth athletic programs • Youth hockey leagues • Youth golf leagues Protect my family’s future • Allow my son, niece, and nephew to attend any college they choose • Allow my family to have someone who can help them in times of great financial need

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CAPITAL INVESTMENT • Startup capital o Liquid Money $30,000 in savings

Fully committed to spending all $30,000

• Lifestyle changes o Time

Fully understand that an agency can take up as much as 60 to 70 hours per week No Commitments other than family, agency, and success

o Monetarily

Our home has a minimal mortgage payment ($500 per month) Monthly bills are minimal (Total monthly bills $2,150) ZERO debt, other than student loans, and an auto loan

o Socially

Have a strong friend base that understands that I will be rarely seen my first two years Extremely strong family network of to lean on

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TEAM DEVELOPMENT • Hiring o Intensive job interviews Three interviews • • • • • • • • •



Dress will be evaluated Speaking skills Motivation How early did they come Prior experience On the spot role play to sell life insurance Commitment and reason for wanting job Entire life of competition and drive will be evaluated Personality profile

Draw from a pool of candidates from Enterprise Car Rental • Only hire sales elite o o o o o o o o



Employees understand their role before hired • • • • •



Employees are taught basic sales techniques Employees sales are tracked and recorded Type A personalities Long hours Small compensation so they will be open to other jobs Highly driven Understand team concepts Are moldable and trainable

Agree compensation is fair Agree on the vision of the office Align their goals with mine Agree to take on specific role Understand what MINIMUMS MUST BE MET

Desired skill sets • • • • •

Highly ambitious Willing to go extra mile Ideally prior sales experience or experienced in dealing with the public where your attitude can affect your pay (waiter/waitress) A team player but highly competitive Moldable

o Team member training One full month before doors open •

Twenty five hours a week 7|Page

o o o o

•

Competent on doing service work before doors open o o o

•

Will work at various agents offices Understand NECHO and ABS Understand service is how we keep our customers and also how we get referrals

Understand the need for thoroughness o o o



Intensive role playing situations Taught to overcome common objections Employee training manual of thirty pages developed by myself and other agents that are leaders in that product Proper phone etiquette Understand the need to develop a connection with each customer

Correct app info Correct procedural guidelines Try to keep service emails and underwriting emails to a minimum (never have a final request) Allows for more time to sell

Understanding of why each product is important •

Progression of being allowed to sell each product once they meet minimum sales goals for other products

o Auto and fire



Then life and mortgage DI Then health Then bank Then commercial

All team will be Select Staff (P&C, L&H, Bank certified) • •

After two months team will run IFRs for new customers After nine months team will help run IFRs for in book customers

After twelve months at least one team member will be security licensed o Team member roles All team will be producers • •



If you write a customer you will service that customer Increases trust and sales opportunities

The team will be split into two shifts (Office will be open 7 days per week) • • •

Shift A will work 8 AM to 4 PM Shift B will work 12PM to 8PM Team will switch shifts every week

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o o

Shift B will help run/train the two cold callers who will be working 5PM to 7PM Mon-Thurs Team member success with how well the cold callers do will be tracked

o Team member compensation Each team member will start out at $30,000 plus benefits (group plan level three medical, vision, dental) and bonus • Bonus will consist of a tiered structure o o o o o o

Employee must write 25 policies before bonus is earned If employee writes 50 or more policies he/she will receive a bonus on all policies written 3 percent of for auto policy and an additional 2 percent once they renew (only one renewal commission) 3 percent for fire policy first year and an additional 2 percent once they renew (only one renewal commission) First month for life insurance First month for health insurance

•



Winning sub team shift leader will receive special bonus either monetarily or extra time off • Team will be given one vacation day for every month they work to avoid burn out and additional days for exemplary production Team member reviews • 30 day review o o

•

90 day review o o

•

Firm outlook on future raises An overview of my vision for team member to become an agent

Six month review o o o

•

An outlook for progressing to sell other products Make sure I am putting the team member in a position to succeed

Raise could be given Further evaluate team member’s goals Prepare them to meet people that could help them along in process of becoming an agent

1 year review o o

If employee is ready, help him/her in steps of becoming an agent Let employee know where they stand in our business plan

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PRODUCTION •

Minimum production goals per month to write 165 applications o By each team member 31.33 raw new auto 15 fire policies 2 life policies 1 bank 1 health 1 mutual fund referral

Production produced by staff

Auto Fire Life Bank Health Mutual funds

•

The agent o Write at least fifteen products per month (I realize that as my systems get in place, the agents sales role will fade back) 9 life 2 health 2 bank 2 mutual funds

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TOTAL PRODUCTION •

Auto o Year one Three sales people that will write a minimum of 15 cars a month off internet leads per person • They will each be given 120 internet leads per person each month • The average close ratio is 10 percent within State Farm and each household has an average of 1.5 auto o Goal will be 15 percent close ratio o With a 8.33 percent close ratio lower than company average our office would still produce 15 raw new auto per person off internet leads o 54 auto per month off internet leads if production goals accordingly (company average of 10 percent not my goal of 15 percent)

•

Referrals from internet leads o Ask each person to give us 5 names and numbers from their cell phone of people that would be interested in saving money and getting great service o Ask at the point of sale for every auto policy sold o 10 percent of referral’s are written o 50 percent of people will fill out the referral sheet from internet leads leading into an additional 9 households and 13.5 raw new autos from auto internet leads

•

Autos written from renters leads o 15 autos from renters leads Write 30 renters policies per month 50 percent of people who do renters do auto insurance as well o Mass Mailing through corporate Send out 1,452 mailers every month, pave mailers Call all working numbers associated with the pave mailers to follow up Underserviced communities



• •

Most individuals have never been given the State Farm service before

• •

Reinforce presence in the community

Not competing with State Farm as much since most individuals in this area believe State Farm is the most expensive company Mail area my office is in Raise brand awareness 11 | P a g e



Write twenty households per month from mailing program o Leads 360 Purchase a minimum of 10,000 aged leads per month

• • •

Much cheaper versus new leads No longer being bothered by other insurance companies

Ability to make more phone calls o 500 calls per team member per day o Cold calling program (Implemented in month 6) Call all internet leads that we have not written after they have accumulated for two months

•

Ex-date system will consist of saving each quote and key pieces of information about every quoted potential customer we did not write o Reasons we did not write customer o Their current company o Their renewal date o Anything unique about the customer that will help us establish a relationship or at least let the customer know we have spoken to them before o Mail out quote 4 times a year that we originally quoted Write 24 autos per month from cold calling o Year two Increase to 4 sales people

• •

Increase internet leads by 150 per employee per month Goal to write 100 raw new auto per month from internet leads

o Year four Add an additional employee • Help with service and be a sales person • Keep internet leads at 150 per month per employee

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•

Fire insurance o Year one Write 25 fire policies per month from multi-lining off auto internet leads • All internet leads will have an in-home appointment to sign paperwork and bring a home quote, if they are not able to come into office • Average of 70 percent of people bundle their auto and home for the savings Write 30 renters policies from renters leads • Buy 100 renters leads per month • Average close ratio of 30 percent for renters leads o Less competition (less people buy them) and highly competitive rates with State Farm Referrals • 6 fire policies from auto internet lead referrals • 8 fire policies from renters lead referrals Mass mailing • 14 fire policies per month from my mass mailing program o Year two Heavily go after commercial business (Will go after Commercial in year 1, after systems are in place) • Talk to commercial underwriter and find our most competitive businesses to write o Buy sales genie Target these types of business with an aggressive cold calling program Call one hour per day 5-6PM for all employees o Drop off literature to all local businesses every 3 months within a 6 mile radius • Push heavily for referrals within that business community that we write Write 12 fire per month off the cold calling program

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•

Life o

o

Year one Do IFRs for all new customers which means to try and do home visits for all new business customers • Done by the Agent • To help keep defections low • To evaluate the customer’s needs • Go over now, later, or never money o Help inform customers of our bank Do IFRs for in-book customers Conduct an IFR for all customers every two years Have every customer sign a life acknowledgement if they do not have enough life insurance in force with the L I F E needs analysis • Make sure the customers know the purpose of term and permanent insurance • Make sure all customers have a small permanent life insurance policy in force outside of their employment Have a presence in the community • Life awareness seminars twice per month in local churches Birthday cards mailed out • Life insurance quote inside • Disability insurance quote inside • Long term care quote inside Write 15 life policies off home visits for internet leads • More than half of State Farm life insurance customers bought life insurance within 6 months of going with State Farm Year two Mail every customer 4 times a year who does not have life insurance • Mail all customers who do not have permanent policies outside of their job • Mail every customer who has a child, a 20 and 30 year term return of • Mail a 30 year term policy for every person purchasing a new home, to protect the mortgage • Mail every newly married couple life quotes and visit them to reassess their needs

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•

Health o Year one Do IFRs for all new customers which means to try and do home visits for all new business customers • Done by the Agent • To help keep defections low • To evaluate the customer’s needs Do IFRs for in-book customers Conduct an IFR for all customers every two years Go after self employed individuals • Particularly construction companies • Have family connections with many small businesses that are in the construction industry o Go over Assurant plans o Go over State Farm Hospital Income o Great candidates for Long Term Care insurance • Write 4 mortgage disability income off households written from mailers and internet leads Have community presence • Go over the need for having at least a basic health insurance plan • Short term Assurant policies for out of work individuals • Hospital Income policies for all new born children Birthday cards mailed out • Disability insurance quote • Long Term Care quote o Year two Mail every household twice per year to make sure they know we offer health insurance • Make all parents aware that we offer Hospital Income and how it can benefit parents with active children • Make sure all people who have high deductibles know how a Hospital Income policy can benefit them

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•

Bank and Mutual Funds o Year one Do IFRs for all new customers which means to try and do home visits for all new business customers • Done by the Agent • To help keep defections low • To evaluate the customer’s needs Do IFRs for all in-book customers Conduct an IFR for all customers every two years • Help evaluate customers ever changing needs o If high school age children, make parents aware of the State Farm student Visa and the perks o Write 2 student Visa s per month All customers adding on a car or changing vehicles must come into the office • Try to refinance the current loan with State Farm Bank o Free gap insurance with any State Farm vehicle loan • 1-2 vehicle loans per month Every over the phone payment • Mail out receipt along with another business line quote • Ask if they would like to put that on their State Farm Rewards Card • 4 credit cards per month o Lower income individuals usually do not have a financial advisor • Look to the Agent as the professional on what they should do • Large opportunity for retirement ROTH IRA’s and 401Ks • Opportunity for auto loans and home refinance Ask people where their retirement is • Ask how they decided on that plan o Did they check a box at work that the HR department person said was the most common The HR person isn’t licensed and trained for retirement planning, how do they know what is best for you? • Offer to help them go over every year their 401K’s through work o Explain where they are getting their money from o Explain what stocks they have and what return they are getting • Allow for large roll over’s down the road o Over the phone payments Ask if they would like to put it on their State Farm Rewards card • Explain the benefits o Every PAC 16 | P a g e

o

Ask if they would like it to come out of their free State Farm checking Goal is 2 checking and savings s per month for the office For all commercial customers Set up Simple plans and Sep plans • ROTH IRA seminars for their employees o Educate employees on the need for life insurance and proper retirement planning State Farm business credit cards Set up checking s for all employees with State Farm

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BUSINESS GOALS •

6 months before opening o A comprehensive training program will be developed Role Playing Training manual Office shadow days set up o A list of prospective employees Have an A team through C team of twelve people Have a pool to tap into to hire future employees Have an employee referral network in place o A firm grasp of my fixed expenses Have a general understanding of my variable expenses • Including compensation and bonus o An in depth marketing plan in place Including where Including what type of people Including how often Including a backup plan to reverse the course of marketing if a plan is not going according to schedule

•

60 days after opening o Have a general idea of what employees are producing and who are not What can I do to fix who is not producing

• •

Are they fixable or should I go in another direction

Have a backup in place and ready to go o An understanding what motivates my team Know each employees needs and how I can meet them What they are doing to accomplish their long term goals Have they bought into my system o Be aligned with my AFO goals for the year Produce at least 1.5 times more than what is the goal of production for all agents Contribute to make out AFO a leader in the State Share ideas and what is working to produce non demand products Share ideas on employee training o On pace to finish a top 20 new agent in the country (Top 100 Agent) Make the Great Lakes Leadership club in at least 3 categories Make the Ambassador travel trip within the first 6 months of being open

•

Year one o Have a well developed well thought out training program Include a company culture of success and competition 18 | P a g e



Include a fair benefit package Have employees that have bought into my vision for the agency o Contribute to make our AFO zone leading Lead zone for at least one area of production Introduce innovative marketing ideas Have open door policy to all fellow agents o Reinvest into my agency Employee compensation raises More marketing dollars o Change marketing plan to change money into more effective avenues Track how much more money is being reinvested Know a firm return on investment for each marketing avenue

•

Year two o Have a training system that is fruitful without large role of agent Have interchangeable staff functions Staff that is able to train as well as myself Have a culture of success in the office o Contribute to AFO success Top AFO in the State Most growth Most desirable o Agency that is a model Talk to others about successful systems Ambassador travel level 3 High employee morale o Highly profitable agency Higher paid employees in AFO Net $100,000 dollars

•

Year three o Have a training system that is fruitful without large role of agent Have interchangeable staff functions Staff that is able to train as well as myself Have a culture of success in the office Produce a new State Farm agent every year o Reinvest in my community Sponsor youth teams o Highly profitable agency Higher paid employees in AFO Net $140,000 dollars



Have at least one employee going into agency Ambassador travel Exotic 19 | P a g e

LOCAL MARKET OPPORTUNITIES •

Southwest Suburban ( 60463, 60462, 60477) o Population 125,985 Demographics • 87.33% Caucasian • 2.30% African American • 5.63% Hispanic • 3.60% Asian • 0.07% Other Ages • Under 18 20.67% • 65+ 20.03% o Median age 45 years old Room to grow agency as community ages Household makeup • 62.17% married • 22.53% never married • 0.60% separated • 8.63% widowed • 6.07% divorced o Large percentage of families with greater needs for insurance



compared to single individuals Median income $77,566.67

• • • • • • • •

>$10,000

2.63%

$10,000-$20,000

4.87%

$20,000-$30,000

7.83%

$30,000-$40,000

7.73%

$40,000-$50,000

6.30%

$50,000- $60,000

7.77%

$60,000-$75,000

11.40%

• • •

High school grad

89.97%

Bachelors

31.77%

Grad/professional

11.83%

$100,000 + 3.00% o Low unemployment 2.73% Good number of people with enough net worth to keep a low lapse can ratio Education Level

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•

Joliet (60431, 60585, 60446) o Population 226,694 Demographics

• • • • •







59.23% Caucasian 10.83% African American 22.80% Hispanic 5.27% Asian 0.13% Other

Ages

• •

Under 18

• • • • •

62.13% married

• • • • • • • •

>$10,000

2.47%

$10,000-$20,000

5.00%

$20,000-$30,000

8.17%

$30,000-$40,000

7.67%

$40,000-$50,000

9.40%

$50,000- $60,000

9.03%

$60,000-$75,000

12.40%

• • •

High school grad

85.83%

Bachelors

23.93%

Grad/professional

5.93%

32.17%

65+

6.97% o Median age 32 years old Room to grow agency as community ages Household makeup 25.16% never married 1.00% separated 4.80% widowed

6.90% divorced o Large percentage of families with greater needs for insurance compared to single individuals Median income $72,170

$100,000 + 7.43% o Low unemployment 4.93% Good number of people with enough net worth to keep a low lapse can ratio Education Level

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