Episode 253: Fireside Chat - Revenue, Expenses, and Paying Yourself with Hunter Emory

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation. Check them out at club.capital.

Kathy, Dennis, Shane, Travis, Mark, good to see you guys, you all. Thank you all for, uh, joining us today. We'll get rolling here in about a minute. See, Hunter, let me spotlight— try to spotlight or pin You up there. There we go. All right, cool. Well, it's great to have everyone be able to join us. Hope you are doing well. Hey, post in chat. I always like to see, for me personally, where everybody is throughout the country. So where are you guys coming from? I know a couple of you, so just post in the chat where your office is located. Hopefully. Hundred, you guys getting some of this, uh, fires, uh, this stuff?

Yeah, we're getting, we're getting hit pretty hard right now. It's, it's thick out there. If you, uh, hear some lightning and thunder, we've got a really nasty storm rolling through. But everyone stay inside today. We're in a code red alert in Delaware, so, um, everyone had to shut down and it's not supposed to really be going outside technically.

Man, that's crazy. That's crazy. Chicago, Dallas. What's up, Travis? Come from Dallas. I got you. Headquarters Maryland. Uh, Marcus isn't in Chicago. I heard somebody say it was in, uh, Midwest out that way, uh, as well. I didn't know how far Midwest that was going. Uh, I have really bad allergies and asthma, so I mean, if it was, if it was down here in the South, it would be It'd be rough, uh, for me, so I'm glad it's not. But, um, all right, man, you ready to rock and roll, Hunter? Let's get to it.

Yeah, yeah, absolutely.

So, uh, appreciate everybody joining us. We're going to do the best we can to, uh, be able to provide value. That's a, that's a huge core value of mine, uh, personally, is to be able to provide value first. That's, uh, my number one core value— provide value first and overdeliver. And so we're going to do the best we can. I'm gonna do the best I can. I know Hunter is going to overdeliver. There's no doubt about that. But we, uh, really, uh, take seriously your time and especially your attention, uh, to, to what you're doing. And so we're going to keep this, uh, pretty jam-packed and, and hopefully have some things that you can walk away with, uh, to be able to implement. I was talking to a group of business owners, uh, 2 days ago, and then specifically one person yesterday, and, uh, we were just talking about, you know, you get all this knowledge from webinars and podcasts and books and And all that's great, but what really matters is what you implement. You know, so ideas are everywhere, but implementation is everything. So I would just encourage all of you, if you hear something from Hunter today that you think really could help you in your journey as being a small business owner, to make the commitment to yourself to be able to implement right away. Do something, create a playbook, create something, reach out to somebody to be able to do that. Hunter, why don't I throw it over to you? Kind of classic Club Capital Podcast 101, we start with a kind of background origin story, but why don't you just kind of give everybody a little bit of your background, your journey, kind of things that got you to where you are first?

Yeah, yeah. I think it all started for me was I got fired from my job, in essence. So that's what kind of led me to the State Farm journey. I came out of college with a degree in poli sci and biology, and I thought I was going to go become a lawyer. And so I took a year off from school and went to teach, taught in high school. I realized I loved teaching. And then the riff-raff came in 2008 and I lost my job. My dad actually sat on the school board and was one of the ones that had to let me and about 20 other folks go. So, um, from there I went to law school for that summer and realized law school was not my thing. Came back home, thought I could go back and do teaching in another school district. And a local State Farm agent who was retiring this year, Mark Shawnee, was also on the school board, introduced me to the idea of insurance. I thought, well, let's try it out. Let's give it a shot for a little while and see how it lands. And from there, it just took off. I worked for him for over a year, and then I got into the agency intern program. You remember the old AI program? Did that and, um, transitioned with them over down Charlottesville, Virginia. And then the agency came available for Bruce Pennell in 2012, and it was a three-way split. And I went to agency there, and we've been going ever since. Um, in 2020, I believe it was, we opened up our MOA, um, in November 2020 in Milford, Delaware, and our, our legacy office is located in Georgetown, Delaware.

Awesome. How do you think that your teaching background has helped you, uh, in, in your businesses?

It's been a huge part of it. Uh, you learn how to connect with people on a different level. So, you know, with education, a lot of young folks, you've got to figure out new and unique ways to meet them in the middle, for them to understand what they need to do and where they need to go with things and what's going to be more important than other things in regards to the job and the knowledge they need. So that's been huge for me. I do a lot of outside the box where we use videos, quick shot videos for them, as far as some kind of like Saturday Night Live skit, and we'll introduce them and bring them into the idea of the conversation we're gonna have that day. Using those pieces because it ties them in and pulls them in. We use that all the time when I was teaching high school, and it seems to work really well for us over the years and using that and finding a different way to connect. Each one's going to be different. We can't apply the same process to everybody.

Yeah, I totally personally agree with that, that you can't coach, you know, in sports— big sports guy, I know you are— that, you know, you just can't coach everybody exactly the same. Before I go further on that, because I've got a few more questions around that, if you have a question, you're on the call, post in chat. I'll be monitoring the chat. I know there's a Q&A feature, but it's just better to do it all in the chat. So post a chat question if you got one, and I'll make sure I ask it for Hunter. How do you differentiate training or teaching, teaching, training, and coaching? Or do you?

How do I differentiate teaching and training? I don't. They're all the same for me. The way I look at it is Either I'm teaching you a life skill of what to do and how to be a better person, or I'm training you on the State Farm. At the end of the day, it's all going to fall into the same vein for me. We're going to go that same path of how I go about the process because I'm going to find another way to connect with you on that level. A lot of storytelling is what we use to get that point across with both training and personally teaching my staff. And that's the way I've always gone about it for me. I don't separate the two. That.

You mentioned around videos, what are— what's a best practice when it comes to the meshing of a playbook, an SOP? You know, people call them different things. I would refer to it as a playbook, but a playbook and pulling that together with videos. Like, what's a, what's a real practical thing that you do that you think has really helped you both meshing written word down onto a Word document as well as video?

So the first thing I think of is comedy. I think comedy really connects well with my staff on what we do. It loosens them up, it gets them interested in it. It shows you oftentimes what not to do and how you have in your mind of how you're going to pitch this product or pitch this conversation to a customer, how it actually comes out and sounds sometimes. And you realize, hey, You know, I don't want to do what Will Ferrell did on that, on that skit that we saw, or that comedy piece, or that piece we pulled from Ted Lasso. You know, that, that didn't land well. So I probably don't want to take that back and use that myself. And that's really kind of opened up the door for us of like, wow, you know, that didn't work. Well, think about it this way then, guys. This is what I'm trying to teach you now. Now you get it. Now the light bulb comes on. Now you understand. And we take and leverage it from there for us. So, so I found with my entire staff that Comedy has always been our easiest route to go to get the point across and to open the door to teaching.

Awesome. All right, let's, let's pivot over a little bit from some soft skill stuff over to a little bit of hard skill stuff for a little bit. Ahead of all these calls, we've talked about sending over bullet points. And one of the things you sent over to me I thought was really interesting. I'm anxious to kind of dive into a little bit is pay to play. And you said allocation and evaluation of hard versus soft soft marketing. So first of all, define pay-to-play, uh, for me, number one. Number two, talk to us about what do you define as hard versus soft marketing.

Great question. So I look at my pay-to-play pieces— if you're going to be in this thing and you're going to run and you're going to go out there and you're going to try to make business opportunities happen, you have to put money into your marketing. I don't know how many times I've talked to new agents, agents that have been in the game for a long while, who don't allocate enough to their budget. If you want to play and you want to be out there, you want to be in this game and make money, you have to put money up front towards it. And you need to have a sizable marketing budget, in my opinion. We work off about 9 to 10% every year of our budget goes directly to marketing, and we allocate out to do that. Um, you know, this idea of shortchanging myself and, and, you know, coming up with a gimmick that I don't have to put that much out there to it That's just— grand scheme of things, it's really not going to work for you if you want to get to a certain size. We are a fast-growing office. We churn and burn. We put a lot into that marketing. So I've always had this mentality with— I have a marketing team in my office. We gotta put— you gotta pay to play. So we're gonna put our money out there and put it into these events. We're gonna put it into our leads and we'll go about that process. When I first came into agency, with regards to marketing, the hard and soft idea, I had this great sales— I've had wonderful sales leaders my entire career. Um, Lam Martin was my first sales leader. Now he's a senior VP for Virginia— or I'm sorry, a VP for Virginia. And he introduced the idea of hard and soft marketing. Your hard marketing is these things where you're going to get them— you're a gear— a return on your investment. You're going to see what the number is for you. That's internet leads, um, that's the click-to-call ratios that you're following up on, that's your, uh, direct connects, or the companies that, you know, your data lots who are sending live transfers back to you. That's my idea of hard marketing. That's the, you know, you're seeing that return on your investment, you have the numbers to see there. And I think in your early years of agency, in my humble opinion, you need to devote a lot of your monies to hard marketing. That's where it needs to be. But you have to realize, and I think actually Isaac talked about this with you a couple weeks ago when you had him on too, that as you transition and change, you're going to have to evolve as an office. It's not all going to sit there for you. So my first 5 years, we did literally probably nothing but internet leads. I mean, that was, that was our goal. We were trying to create an opportunity for the staff to create activity, to grow our office out. A lot of hits and a lot of misses in doing that process. We honed our skill, transitioned to where we are now. I do literally no— very little, if no internet leads whatsoever. And that's transitioned over to a soft marketing approach for us. It's more now about branding. It's more now about getting out there and letting people know who we are, what we're doing, how we're going about that process, hitting the community events, putting our name out on billboards, mass sprawl. You used a great example, Supreme, in your presentation. You talked about— and it connects back to me, it's the same exact approach now. So, you know, that's what we've transitioned ourselves over to. We're trying to drive a lot in.com leads. For us, StateFarm.com leads, which unfortunately in the state of Delaware now has been turned off with everything going on. We know one day that will change, but we spend a lot on that. Google reviews, putting Google reviews out there, the traveling— I call it the internet billboard now— and putting a lot towards that to create this brand that there was someone you could trust, someone that you can look to, to go to, that was going to take care of all your financial service and insurance needs and be there for you long-term on that. And that is where that transition has happened for us. But we're constantly monitoring that because I I do feel I'm in a market position right now with the changes that we're going through that I'm going to have to divert back from more of that branding and soft marketing back to hard marketing because I need to again create activity for my staff. Because with the changes on the underwriting, we need to create back— go back to more activity. I need to get a lot more at-bats. It's not going to happen naturally, uh, as it has been for the last 5 years for us. And then constantly realizing that and leveraging that and watching our data that we're bringing in through the sales funnel and through Racing Snail, some of the different platforms we use. And we sit down once a month and review where the marketing's coming from. What is our big hitters? Who are COIs that are sending us the most business? What do we need to do to keep those relationships? And do we need to direct those things back and where we're going to shift our monies around?

Honest to goodness, I'm not making this up, uh, just to, just to say this on, on this call. You may have actually shifted the way that I talk about this to hard versus soft marketing. I love— I try to use language very intentionally. If people go back, I think in the Chris Jones one and maybe even in the Isaac one that we talked about this, I would refer to— we're talking about the exact same thing, we just use a little bit different language. Hard is direct response. I would call it direct response. It's basically, like you said, you get a number, you can measure the number of leads that you get, how much cost per lead, etc. And then soft is all the branding things. You're buying the ball team and you're spending $250 to put your name on the outfield fence or something like that. So yeah, I really do like hard versus soft marketing, then have the definitions of that. I think that's great. All right, I got a few questions that I want to dive into to dial this in. A couple of things you said, your total marketing spend, you're in a high-growth area, so you're at 9% to 10% of top-line revenue, which makes a lot of sense. I'm going to give a specific example out outside of insurance in just a second on that. What do you believe is the percentage of where you are now? Maybe— and you just said you're going to maybe make a switch, but where would you say the percentage is of that between the hard versus soft marketing for you, of the 9 to 10%? Does that make sense?

Absolutely. 80/20. 80% in soft marketing right now, 20% in hard marketing.

Wow.

So our conversion ratio, our conversion ratio are now sitting at 40 to 45, 44% conversion ratio on raw new auto right now. Of that that we bring in a year, 70, 73% of that just comes from referral. Hmm. And that, and that I speak back to soft marketing as being that piece for us. It's, it, the first 5, you, I believe it has to be hard. It has to move from a hard marketing position to a soft marketing position, especially in those early because it's going to be a drip effect. And you slowly, almost like a balanced mutual fund where, uh, you rebalance it every year, you slowly need to transition, in my opinion, back over to soft marketing as you get bigger, because then it becomes more of a brand. You've accumulated some of this base there, but now it's the referral pieces, it's rolling it back in, and you just keep getting in front of people. How many times is it, 9 or 10 times before somebody starts to think about you? Um, I don't know the exact statistic, but Yeah, I want to, I want to tailor some of my questions if you don't mind.

If you're on the call, will you post in the chat what year in business you are in? I'm curious, you know, do we generally have 0 to 5, 5 to 10, 10 to 15? If you'll post in the chat for me, that'd be— give me a really kind of an idea to tailor this next question and some of these other ones in the future. That'd be great. Okay. So while people do that, Hunter, what did you think that you did in the first 2 to 3 years? What was that percentage early on? Was it literally 80/20 the other way?

Correct, absolutely was. We— our budget was all internet leads and driving business back that way and trying to, trying to grow this thing out that way. That's it. That was what we did. And let's remember, 10 years ago, that was kind of the adage, right? You know, that was the way when we started this thing, that's, that's how you're going to grow the book. And, and I am seeing some younger agents that are going that, that, that branding piece more Nowadays with Facebook and social media, I think there's great tools to leverage for that, but you have to have that back to the staff. You got to create it up front, and that's the only way they're going to learn, in my opinion.

Yeah, just kind of looking at some of the numbers, obviously we're— and, and this is not representative of everybody, but, you know, 0 to 5 and then maybe 10 plus or so. And so that hopefully gives everybody a little bit of an idea of kind of where you are and to look at and measure some of the numbers that you have. Um, so I'm in a, um, I'm in a mastermind group, and one of the masterminds, uh, that the— actually, the owner of the mastermind, he works, um, part-time as COO for somebody that, if I said his name, I just trying to keep— because I'm going to share some numbers here— confidential, uh, for who it is, but all of you would probably recognize the name. and they spend $135,000 a month on Facebook ads. $135,000 a month. And you hear that and you think, oh my goodness, what in the world? Well, it's 6.5% of top line revenue, and they spend between 9% and 10% of top line revenue in marketing as a whole. So to your point, so they do about $25 million in top line revenue. That's one of the things I really like about using percentages, Hunter. Is because whether it's $25 million or $2 million or $400,000, there's a level of being able to kind of see somewhat of a comparison. You can't compare the numbers. I mean, you know, it's like Facebook ads, $135,000. I mean, my goodness, I'm spending $2,000, you know, and that's a lot. Yeah, but as a percentage of revenue, there still are some standards out there that I think are helpful. Thoughts on that?

No, I, I couldn't agree more because you do it as a younger agent. You hear some of these, these older folks out there saying, well, I dropped this amount of money this year. You can't think like that. I agree with you completely. The percentage makes it an even playing field, allows you to see that. Um, I know what I've used, frankly, in, in, you know, to get a plug there, Club Capital. I watch those benchmarks for that inside the system on a, on a monthly basis when I get my reports. I want to see that we're doing that. And if I, frankly, if I see we're under A lot of people might look like, well, we had a great month, we didn't spend that much. I'm looking at, well, we came up short. Where can we inject more money back into this thing to get back out there and do it?

Yeah, that's good. Um, that's actually— leads me into a question I wanted to ask you, and this is not just around, just around your financials. This is in general. You clearly know your numbers. Do you think that you naturally Have they been towards knowing that? Okay. Some people do. Or do you believe that over time you developed the skillset of the, of understanding the importance of knowing your numbers? Because I mean, just a minute ago you were spitting out some numbers on there that, you know, maybe some people don't know those numbers for themselves.

Ambition is the first step towards success. It's time to level up your agency and Coach P Consulting will help you do just that by using the same strategies he used to sell over 7 $1,200,000 life insurance policies in 2021 alone. Now, this is not your regular one-and-done type coaching. You'll get personalized coaching 2 days a week, every week of the month, and you'll get a live look behind the scenes of his team training and an office that's performing at the highest level. There's a reason Coach P Consulting is the fastest growing coaching company for insurance agency owners in the country. Coach P will train your team alongside his own and show you the exact steps they're taking to achieve Chairman Circle, Exotic Travel, and Multi-Line Presence Club and be one of the few agents to be selected to have a third office. So whether your goal is to be at the top of your local market or amongst the best in the country, this training will give you the strategies and the tactics to get there. For just $250 a month, you'll get high-level coaching each week from someone who is already getting it done at that level, and his strategies work, and it's time to put them to work for you. Sign up at coachpconsulting.com and get your first full month for free when you mention the Club Capital Leadership Podcast. Are you an agency owner looking to grow your revenue, increase your bottom line, and better manage your taxes? Club Capital is here to help. Club Capital is the largest accounting and advisory firm for insurance agents in the country, providing monthly accounting, tax strategy, and CFO services. Way more than bookkeeping and your everyday run-of-the-mill tax prep, Club Capital is focused on providing financial and tax advisory services that help you plan and forecast your agency's performance. Their financial dashboards and agency forecasting tools help you better understand your agency's historical performance, create, measure future targets, and see how your agency compares to your peers around the country. Imagine what it would be like to understand the impact to your bottom line when deciding to hire a new employee, or forecast the impact rate changes or commission rates will have on your business. With over $200 million in tracked annual revenue and $140 million in tracked annual expenses, Club Capital has the data and the team to help you make better informed decisions for your agency. They will help you turn that back office stress into the backbone of your agency's success by giving you the tools to take your agency and your leadership to the next level. Visit club.capital today to book a solution overview with one of our business consultants. Club Capital, way more than a CPA firm.

I think it developed over time. I can't say this is a natural thing for me. I don't come from a background in doing that type of work. Both my parents were state employees. No one was an entrepreneur in our family really till I jumped into this thing. So, you know, I had to develop it at a time. But I always go back to my early years. We were very lean on what we took home. I didn't take very much in, so I really had to pay attention to where my money was going and how I was allocating that money properly. And I think through custom and doing that repetition and going through that process and doing what I like to call a napkin math napkin math. It allowed me to really dig into this thing over time to say, okay, here's what I need to do. And then when I transitioned over to having great bookkeeping to be able to really itemize this thing out, it really helped open it up for me more to know where I'm going and what I wanted to do with that. So I think that takes repetition to get there, but it can be done.

So what is napkin math and what are the numbers that you would put on, on napkin math? You sent that to me. That was definitely something I was wanting to dive into. All right. So you got me on hard and soft marketing. That's, that's really good. So what is napkin math?

So napkin math is literally another idea that I took from Lam Martin when he was my sales leader on that stuff. And, and let's realize, guys, it's a lot to bite off when you're looking at your budget and what you've got, where you're allocating things. But we use napkin math for us. We use it on a regular basis and it's the high— your big numbers. So number 1 for me is payroll, going through and seeing, okay, what is my payroll that I've got? What's my payroll, including taxes, benefits, all that? Having that number right there. Number 2 for us is our marketing. What's our total marketing, hard and soft marketing? What's the total amount we put this year towards it? Number 3 is, okay, what's our building? What's our rent? What's our utilities? That's all tied in together in one group. Number 4 is miscellaneous, so supplies, employee relations, um, all that type of thing. We dig all that in there. And then number 5 for us, some people choose to put in there— I do because I like to know what am I paying quarterly taxes. So I use quarterly taxes through the accountant. I know I'm going to pay state and fed, and I add that in there. And then I say, okay, what am I looking at using our, our State Farm systems? What am I looking at? What am I spending a year? Or where am I at on my paycheck every 2 weeks or every month. And then I take them, subtract that away from my napkin math here, and I've got an idea where's my profits at. We are constantly watching our napkin math to say, okay, this is what we're doing without the dig into any systems. I have those numbers always in the back of my head as we add a team member on for $30,000, $40,000, $50,000. We roll that into our employee payroll. We added a percentage on there, what we think it is, and that's now added into that number of what I'm looking at on a regular basis. It has helped me to narrow down to say, okay, here's your guardrails, Hunter. This is where, you know, we're spending it. You have a good idea on it. Do you feel like this number is getting imploded of what you're spending? Are you staying within your 10% that we talked about earlier for the marketing? And it's over time helped guide me on a higher level and easier level to maneuver through this whole thing of business.

All right. Lot there. That's really good. Few questions I've got, uh, around that. There's a question that I wish that I had been able to formulate, you know, 10 years ago, and that was this balance of— at the time it was reinvestment in the business. Revenue begins to go up, profit goes up, I immediately took it and you reinvest back into team. Okay, I don't think that there's going to be anybody that would say that that was some bad idea. However, I had no framework for when to then be able to take some chips off the table myself through some personal income. So what ends up happening is revenue goes up, the personal income of the business owner and the founder stays flat, and they look up and they say, you know, I was at $300,000 Now I'm at $750,000 in revenue and my personal income may not have changed. Okay. And these are some of the things that, that maybe people don't talk about. So how do you approach it now year over year versus the balance between I'm going to, I'm going to make the reinvestment in my business. I'm happy to use the example around staff and wages, etc., but it also could be in some other things too. It could be a bigger building, it could be in more marketing, etc. How do you balance that? How do you, how do you begin to approach that in your business?

Yeah, so I've always had an approach, at least for me personally, that I set an amount that I want to take home for the year. So if I say, you know, I'm going to stay in a flat salary, I'm an S corp just like many others, and I know I can have these draws in the end, but I set a number and say I'm going to take this specific number for the year. Anything that's left in the account goes— it's going to sit in an account, it's going to go back to business. I'm a firm believer in having money set aside in your account. I always have to have at least— and it's a bigger number for me— $200,000 set aside in the business account that always has to be there no matter what, whatever the situation is. So we just went through a very large building purchase and we had to allocate quite a bit of money out to that. We lost our office to eminent domain from the highway system. That came to town. With that being said, if I hadn't been taking these monies and setting aside into the account and not taking draws out in a year on that, I, I live very modestly in our approach to things, um, that I would have been set up in a situation that they wouldn't— it would not have been good for us. We— I don't know what we would have done. We'd probably been in a shopping center mall or something like that. There's very little commercial left in this town for us. Our business has grown over 33% year over year for what we've done over the last 10 years. You know, it's drastically grown, but I've had to have this belief in my mind. The way I look at things is I set aside the checking account, we'll allocate it and add the staff as we need, but I'm not taking the larger amounts home compared to other people. Um, I think I, and I set that benchmark right at the beginning of the year that if I'm going to take in $150,000, that's what it's going to be. Next year, maybe a little bit larger to add on to it, but that's— we've really limited ourselves on that. And that kind of keeps the guardrails on me to, to say that. Now you take a step back and look at it later on and say, wow, but we haven't been in a position so far to say that, you know, this person is, is doing— we're spending this much on this one versus what I'm taking in. We haven't quite found ourselves to be in that situation yet. So I haven't crossed that bridge at this point.

Yeah, I've heard— okay, don't, don't, don't send me nasty messages when I say this person's name. Okay. But he does have some decent business stuff. You know, Dave Ramsey, I've heard him talk about 3 to 6 months of expenses, right, in savings. And then there's a great book written by Greg Crabtree, who ironically is in Huntsville, Alabama, but it's called Simple Numbers. And the word that I got from him from that book is called core capital target. Core capital target. And so that's kind of your core capital target. What's the number? Not a number, maybe a percentage, right? The 3 to 6 months of expenses that you feel like is for, you know, just if you were talking to a new business owner, what do you think that number is for you?

So our 3 to 6 months of expenses would be for us.

Yeah, I mean, obviously you said $200,000, but I mean, what do you think is a good, uh, multiple on monthly expenses to be able to sit on?

I mean, 3 to 6 months would be good for most people. Um, I think that— I mean, it's a solid number for us. I just like that I have multiple accounts set up, so I have a savings account set up for us as far as that goes, and we have a different bucket set up for our business account. So we always try to keep Frankly, roughly about 3 to 6 months savings set aside just for that, and then our business account and our savings account otherwise.

Yeah, well, I mean, you know, if COVID a few years ago taught us anything, I mean, there's a lot of unknowns, and there's a lot of unknowns in the marketplace. And so, um, sitting on dry powder, more dry powder, cash, um, is absolutely a strong discipline to have. Certainly, you know, a lot of small businesses were able to get, you know, bailed out with different PPP loans and all of those type of things. But that doesn't necessarily mean that that's always going to be the case, right? And so being able to have that, that ability— imminent domain, that's a good one. I'm going to remember that one for future education purposes, you know, myself, because those type of things happen and you've got to be able to have the cash without having to go and get to get a loan or something like that. Um, let me ask you, um, uh, another question. You sent me a thing where you said, no, when to trade time for money. I'd love to know, uh, what do you mean by that specifically and what you do?

So, you know, we're lucky enough in the position that we're in with this type of opportunity we have with State Farm that the, the money is going to be there, it's going to grow for us, and we're going to have more and more potentially, if things are going well, coming in over time. It accumulates and it comes. What we don't have is the time. The time to be with our kids. The time to take opportunities to go out with them and experience Little League and coach and do all that. So I've started in the last couple of years of taking the approach that I'm going to trade in. I'm going to pay more for people. I'm going to hire more team for management and taking on those responsibilities. I'm willing to do that to gain that time back to be home because I can't buy more time. It's just, you can't do it. And this is the only way I see it for me to do that. In essence, if I were to say to buy it is to hire more people and to put those people into management positions and allocate out what I'm doing to other folks and allows me to get that back to be home with them. Because this work until the midnight, or, you know, burn the midnight oil thing, it just doesn't cut it after a while. And I've always been a grinder. In my early years, that's all you did. I mean, you pretty much put a cot in the office and you live there. But you know, where I'm at now and the ability to be able to transition over, it's something I'm constantly looking at. How much more can I take off my desk? Am I willing to give that up and pay somebody to do that with an assistant or so on and so forth and give me that time back?

All right. I could probably do a 2-hour podcast about this one thing. Okay. So, but we won't do that on here, but I do want to ask you a few questions. Around that because I think it's pretty interesting. I think there's two sides of the same coin with that. There is this idea of what are the things over time that you have delegated off of you? What are examples where you have created a system, an SOP, a playbook, and then been able to transfer to someone else? Okay, that's number one. So give some thoughts around that. And then in a minute, I want to come back to the other side of that and say, okay, then where have you reinvested the time that you now have? Okay, I get teaching, I mean, spending time with your family, your kids, your hobbies, etc., but in the business stuff. Okay, so some of the questions, uh, that, that you get from time to time are, okay, well, I, I kind of get that I need to probably outsource somebody else doing payroll. I can have an EA to, to run my Okay. Well, what are you going to do? Where should you spend— be spending your time? So I think it would be interesting for you to answer kind of both sides of that same coin to say, all right, what are some of the specific things that you've been able to offload off of you? Number one. Number two, then where have you reinvested the time when you're actually working in or on the business?

Great question. One of the big things we've done is our whole HR process. Everything inside the HR process, the monthly reviews, the quarterly reviews, the, uh, day-to-day operations, vacation time. We have healthcare, all that. And they talked about payroll. We do have a payroll company, but you actually have to process the same payroll. All that's been taken off my plate now, given over to my operational manager. She handles everything like that. She handles the write-ups, she handles, uh, setting up for the reviews and, and does all those and then brings them over to me for for a look over afterwards. She holds the staff accountable. That was a big chunk of time that was eating away at me doing our 401(k) matches and contributions every, every 2 weeks, all that. What it allowed me to do is open up more time to get back into, one, training. I do like to talk about the educational piece. I get the opportunity to step into some of these trainings and be a part of a specialty financial service training with the staff on an individual basis. Number 2, For me, COIs, my Centers of Influence, allows me to get back out. We have a marketing group that does go out and does this for us on, on staff. But when I have the opportunity to get out and do it, especially create new opportunities and meet with new folks that we can have better relationships with to drive business back, it, it pays tenfold over when I'm the one doing that versus others. And I enjoy that. I really do. I mean, I don't know a lot of people who do like doing payroll and You know, you know, Hunter, what you'd be really good at—

you should go into politics. I'm just saying, you should be a politician.

Yeah, yeah, yeah.

If those of you don't know, maybe Hunter can let you in. Maybe he's already doing that a little bit.

So yeah, yeah, I, I, yeah, I can touch on that now, brother, or late, whenever you think, man. But, uh, but that's what I've been trading time for, that. And I do. I sit on a number of boards. So I sit on Electric Co-op Board for the state of Delaware, Delaware Electric Co-op Board. I was elected to that position, been on there for 3 years, and it gives me opportunity to give back to the community. It gives me opportunity to step out and do some branding for us, in essence, for our office and for our growth, and, and, and work with others in our community to— and get an understanding of how other businesses work. I never thought energy— I knew energy was complicated, but But it, it has a close tie, especially co-ops, to the way that Mutual State Farm works, and it's been a good experience.

So you gave us two, uh, give me a couple more. Where else have you filled back your time when in the business? Um, training, uh, specifically. No surprise, you talked about at the very beginning, uh, your background of teaching, so that doesn't surprise me at all. That's obviously a unique ability. And then number 2, I would call it a KPI. You know, you're the key person of influence in your community and meeting with those CUIs. So that makes sense. What are a couple other ones?

Education. Education is the key one. How many times you get your opportunity to go back in and hone your own craft and sharpen your own knives and your skills? As a business owner, a lot of times people don't think about— they think you have it all right off the bat. Gives me a chance to do that now, having more time available to me. And then I transition that back to staff. I think that's what I always talk about. Um, as far as additional pieces for that, a lot of it for us has been the last year and a half is this building. So this massive building we put in, the renovation we went through, I had to be a part of that. I had to be involved in that because at the end of the day, that was my money going into it, and that took a lot of my time. And thank goodness allocating and realigning people to take over doing what they're doing because I was down here doing that, experiencing that.

I just want to double tap on the education piece. I call it learn. In my, my own job description, it's number one. It's number one. I think the most important thing for me to do is to learn and to grow so that I can try to give more to other people, which fits in with my one of the core values of growth contribution. So for all of you that are listening to this, as a podcast or on here today, I, I think Hunter is absolutely right. Whether you— whatever you call it, learn, growth, uh, education, uh, that is incredibly important. That is, you know, that time that you spend at the coffee shop reading that business book, listening to the podcast, taking notes, um, is, is, is not time wasted, uh, at all. It is helping you to be able to, um, go further faster. So I think it's really great Um, all right, we're going to wrap up here in just a couple minutes. We've been going at it, uh, a little over 30 minutes. If you've got a question for Hunter that you want me to ask that I did not get to, please, uh, post in the chat. Hunter, as we wrap up, what are, what are a couple other things that you've been able to offload from your plate to spend more time doing these other ones? You mentioned HR, HR function. What are some other items?

I think it kind of ties a little bit back to these KPIs. You talk about marketing, well, reallocating and bringing in— we brought in some, uh, an internship program now into our office. Uh, we have people that oversee the internship program, and that has allowed me to take some of that marketing social media piece associated with overseeing the SEO work that's being done, uh, working with our vendors to make sure they're held accountable and that we're meeting our goals that we have set for ourselves. We have a whole— we have 3 marketers in our office that are doing all that for us, and they're also overseeing the internship program. I love the internship program, and I think a lot of agents like to do it, they just don't have the time. Um, so we have set that up. I was a part of that originally setting that up, and now I get to have a chance when our marketing team is meeting and running those interns to step in and be and experience that. It helps me with recruiting to find more additional team members to bring on to our office. It helps me with the whole idea of community support. And giving back and bringing these folks, these young folks in. A lot of them are high school students, um, and experiencing that, getting and setting myself up with the school districts and working with the schools in the towns that we have our offices in. Um, and that has been a very big help for me, reallocating that, but also still being involved at the same time because you have to have the people in place to be able to handle all that one.

That's so true. Yeah, that's good.

All right.

Last 2 questions, and it may be the same answer, and if it is the same answer, that's great. I asked earlier to get an idea. Let's say that you're speaking to a large group of business owners. They're in their first 3 years.

Okay.

What is the thing that you have learned over your time that you wish that you knew then when you were in your first 3 years? First question. Okay. Second question. What are the things then if you went into a different room and you were talking to business owners that have been doing that at, say, 10 years plus? I know we gave the examples around marketing specifically, but maybe there's a broader, broader answer there. And if it's the same thing that you would share, that's great. But what would you tell those two groups as a kind of a transfer of the things that you've learned the most through hard knocks, etc.? To those two different groups?

Yeah, I think one is the idea of communication with the staff. And I think in your early years, you have your head down and you're grinding through things, um, and going through the process. You don't get enough time to sit down and have that individual one-on-one coaching with those staff members and, and having that communication with them. And when you don't do that, This, this turntable of people leaving and not having enough communication and being transparent with what your goals are for them. I know my mistake in the early years was I said, okay, we're going to do this, we're going to do that, but I didn't show them how we were going to get to that place and what it took for us to do that. We have since changed that, and the communication now is, is transparency across the board. Why we're getting to this goal, what's the return for the team member, how we're going to accomplish that, what that's going to look like for them. And that's been a big piece of it for me is the communication. I think that same applies to my older agents who have 10 years plus, because we fall out of that piece. We get so used to a routine and a set goal that we have in place that we don't— that it starts to fall by the wayside. And we added, layered in with a new team member, or this one transitions out and no one comes in, and so on and so forth. And we've lost that communication that maybe we established in that year 2 to 3. Bringing that back up, that's one piece of it. Directly for me, as far as with the team too, and hiring the right staff and keeping the right staff on is benefits. I'm a firm believer in benefits and offering benefits to your staff. And when we got to the place, my early, my third year in, we went to healthcare. We offered healthcare. It was a tough one to swallow to take that, that burden on to start to do that pay, but it has shown returns for me tenfold in the amount of quality of people that I've hired. Offering the 401k, offering KTPTO, salary team members, and additional group bonuses and stuff that we build into our plans for them. That has helped me out a lot. And I firmly believe for both young and old agents, if you're not offering benefits Go back in and look at that because that's what's going to separate you from the competition. That's what's going to allow you to really bring the talent in and the talent that'll stick with you long term.

Man, that's good.

Those are two that I've got that I've worked with.

I think that came up in— I think that came up either in Isaac's or Chris's as well. I'm not really— I can't honestly remember what that was. Anyway, it doesn't matter. I'm glad you reiterated that.

All right.

I'm going to ask, I'm going to ask Hunter, uh, just one or two more questions, but if you're with us live, uh, in the group, if you would do this, this would be huge. Post in the chat. And I see a couple of questions in there and I'll get around to those in just a second, but post in the chat. What have you learned? What have you loved and what are you going to do? Okay. A little bit of accountability for this. This is what I do. And, and, and my group that I work, we always wrap up with what'd you love? What'd you learn? What are you going to do? Remember, it's like, would you love to learn? Great. Okay, what are you going to do? What's one thing that you can take away and implement in your business? And obviously that would be a way for Hunter to be able to kind of say, hey, this has been impactful. So Hunter, we appreciate your time that you give. Travis asked a question. Are you, are you built in group? Have you built in group bonuses around scorecards, quarterly bonuses? How, how have those incentives worked? Great question, Travis.

Great question. Great question. Yeah, let's talk about that. So we do, we have a scorecard bonus for the end of the year. I pay it March of the following year, and I set it up based on the points. So our, our minimum goal every year is Chairman's Circle. So it used to be, of course, 330 points, but now it's 360 points. And what we do is we build into our staff is they have to write 50 financial services per year. They have to hit a minimum of $15,000 in annualized late premium and $5,000 in annualized health premium to unlock that bonus. And as the points go up, the percentage that they'll get goes up. So for instance, last year our sales folks each got $14,000 in bonus. It was paid out to them in March, um, and they're incentivized. They buy in the scorecard. They need a scorecard probably than a lot of other folks that are out there. They know it inside and out. Uh, they understand what the goals need to be based on that, that they need to— how much health insurance they need to write in the first 6 months because it doubles down for the year. They realize that we, we run everything like a 6-month office. So our goal is to write as much as we can the first 6 months and churn it and get it on the books and get it into our system. Uh, and then, you know, we'll see how the next 6 months is paying out for the following year for us because the carryover that we're getting on that But we built this whole bonus into there based on that piece. And they think of Christmas as March 15th as well as we do every year. So, you know, that's been a big help for me from the agency standpoint to do that and offer that. And we've had that since the very beginning. I actually learned that idea from a great agent, Billy Reese, and we applied that same approach back to our office. And it's, it's seen returns for us and it's really good buy-in. When you're a sales team member who doesn't hit it, you don't get a piece of that bonus. And that holds accountability for them in place because they do see what everyone else is getting and they want to be a part of it. They want to be a part of that bonus.

Yeah, that's good. All right, uh, remember, post in the chat: would you love, would you learn, what are you going to do? Would you love, would you learn, what are you going to do? Uh, Andrew asked a similar question, uh, been open 18 months, how do you quantify employee ROI? And build a comp plan based around that. I think it's a great question. When you begin to look at, you know, just compensation and taxes, and then you add in health insurance, and then you add in, oh, I'm investing a lot in marketing, you know, there's a, there's a cash flow issue that happens right around that. So what advice would you give to Andrew?

So I use, uh, Racing Snails ROI or internal calculation piece inside of the Racing Snails platform. We have the capability using that and it helps make that work a lot easier for me. My turnaround time and what I want to see on my staff is a minimum of 30 applications a month in just P&C business, coupled with at least 5 on the first 3 months financial services per month, and then that goes up to 7 by the second 3 months. If I can get that and I can get that continuous production out of them for 18 months— they'll actually— less than that, it's actually 16 months for us. If I can get that out for 16 months, now I'm gonna start to see a positive ROI on this thing for that team member. We always start everyone out at 36 to start. We bring them in who are in our sales position, but a lot of times for my sales folks They all have transitions from service. Um, it's kind of like a stepping stone for us. We don't put you in that position until we know that you're, you're pretty sound and you know what you're getting ready to get into. Um, and that's how we have done it for us, and that's where we see our ROI on that one. Awesome.

He asked also, do you factor in premium targets?

Yeah, outside of just apps. Yeah, just apps. We factor in premium targets. Um, we set our premium targets out. And one thing I want to talk about in regards to premium targets real quick, just a little quick transition, and I know we're talking about scorecard. So many times agents think about this from a travel standpoint. Yeah, you've got to stop doing that. You've got to stop doing that. You got to start thinking of scorecard. Travel credits are not going to carry over to the scorecard for you. You have to focus on the benchmarks, because when you focus on the benchmarks for the scorecard that's when the money starts to kick in, and that's when you see the return on your investment. Unfortunately, I see a lot of times these agents say, well, I travel level 1, but my scorecard is this. It doesn't reflect. What, what am I doing wrong? They're so focused on using those travel credits and those travel benchmarks to what they apply to scorecard. You— the scorecard's a whole different animal. I could talk for hours on that piece sometime. But, you know, there's a lot more to that than meets the eye. And the sooner you can start realizing focusing on those specific benchmarks at $35,000 minimum, that's when you're going to start to see, you know, and setting your goals for your staff to that. That's when you start to see that those scorecards start to compound and be a lot larger.

All right. Well, we'll have you back on. We'll do, we'll do a, we'll do a deep dive in that. Okay. Well, that's what we'll do. We'll just do a whole deep dive on that. Hunter, it's been awesome having you on. You've been great today. For all of you that joined us live, thank you. I hope that this, we served you. I hope that we over-delivered in our time together. Hunter, hopefully we can do it again in the future. Appreciate you, man.

Thank you.

All right. See you guys. Bye everyone. Thank you.

So the big question is this: how do small business owners like us grow our leadership, develop our teams and scale our business in a way that allows us to get our products and services out to the world, yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting and advisory firm for insurance agency owners in the country providing monthly accounting, CFO services, and tax preparation. Check them out at club.capital.