All right, let's do it. So in this video, I'm going to talk about how much you're going to make in the first year, second year, third year, and fourth year. Obviously, this comes down to how much energy and time and effort you put into it. But this is just a good kind of ballpark starting point to give you an idea of what I did, how I started from year one, literally from scratch to now passing four years in business. So I'll give the real numbers.
Straight to the point let's dive into it. Alright, so a question I got I get very commonly is when I first started You know from scratch day one How much did I invest and how much money did I need to invest into just getting it going? So I started with about five or ten thousand somewhere between five and ten thousand dollars in cash that i had saved up and i used that to invest in the initial stuff like rent and office rent um i had to pay for my alliance there was an initial fee i think it was like 1200 bucks you know office rent at the time was like 500 bucks phone system had to get all that set up um you know management system uh marketing getting my logo and those things set up so it cost me all in with licensing and all the different errors and emissions all those costs check out the how to start an insurance agency or how to start insurance company video but all those costs all together around five it's somewhere between five and ten thousand dollars so I also get the question what does that first three to six months look like when you first get are getting going I will tell you right now and I say it often it is complete hell trying to figure everything out especially doesn't matter if you're coming from experience in the captive agents if you're farmers or state farm or any other all-state independent insurance agencies are very different there's a lot to learn so those first three to six months you're going to be figuring out stuff just foundational systems processes with different carriers so very confusing a lot to learn in those early months and i basically made very very little money so be prepared to make very very little money and reinvest every single penny that you have into the business early on You cannot expect to be making a ton of money early on. About a year in, you can, let's just say you hit $250,000 in premium sold, which is about $20,000 a month in premium.
It's not that much. It's pretty low. And that's kind of the first year you'll make somewhere between $25,000 and $40,000 in commissions.
Not a ton of money, especially in today's world. But that will be your first kind of base, renewal commission. And then every year that kind of stacks up. So if you do that again the following year, another $250,000, now you have a $500,000 book. It's generating somewhere between $50,000 and $70,000 in commissions.
Now you can finally sustain a lifestyle, any type of basic lifestyle. And then your three, you compound, you do it again. And again for year four, obviously these are kind of low ball numbers I'm giving you.
But you can expect by year four if you really start to progress. you should at least have a you know couple million dollar book of business that should be generating somewhere between two and i'll just say on the high side when people are really crushing it like 500 000 in commissions um so in a couple years if you really hunker down double down and reinvest like i said reinvest every single penny that you have back into the business literally that's what i did year one i paid myself zero year two i paid myself zero um and then into year three i started paying myself a small salary because my cpa was saying like chris you have to start paying yourself so i started doing that and then year four you know they really the commissions really start to flow you can pay yourself a little bit more and and actually enjoy your life with your money that you're making which is great also the great thing about that is in taxes year one you don't pay any taxes because you're essentially breaking even or if not taking a loss So it also comes down to your expenses. Everything you spend with your business credit card or business money is an expense. Office, desk, computers, phones, internet, your marketing, your payroll, your leads, even payroll for yourself if you have the right corporation set up.
Obviously check with your CPA. I'm not a legal advisor when it comes to finances or taxes. So don't necessarily take everything from me. This is just what works for me. year one i didn't pay any taxes at all actually i got like tax credits because i put down a bunch of furniture that i paid for as a loss so carried over to the next year tax credits and year two didn't really pay taxes I broke even pretty much was just like I said your own payroll counts as an expense so writing everything off is very important also you don't want to be paying tax you don't want to be paying taxes in that first couple you're really kind of like double down reinvest and allow the thing to carry on and snowball so reinvesting is important first couple years and some of the biggest expenses you can expect are like I said your management system is there your office rent depending on how big of a space you need your payroll your team is going to cost money to have an a legit team having payroll and paying everybody properly is important marketing and leads like if you don't have leads flowing in you just have a broken system it's just you know you're going to be burning up cash and not feeding the machine oxygen like the oxygen is leads like leads need to be coming in and buying leads is important so Shout out to ComQuote.
Maybe we could pop up ComQuote here if anybody's interested in commercialquoting.com. Check it out. That's for our lead vendor where we generate pretty much live, hot, commercial leads at any time and can pretty much convert.
They're the best leads I've ever used since I've started my agency and help drive the revenue for my business every single month. So highly recommend. Boom. ComQuote. Your phone, your internet, all those expenses all come together.
Early on you want to keep it as lean as possible. Like don't overdo your expenses. I would say just breaking even year one is great.
It's a great way to do it because like I said, no taxes, you're reinvesting in the business and you're covering all your overhead. So then year two, you should really shoot for the stars, try to make as much money as you can. And year three, four, five, six, seven, eight, as you start to compound all that book and really starts to grow, and then you have a big tax bill that's a good problem to have so if you have a huge tax bill that means you're doing something right but you want to figure out ways where you can try to eliminate those you know taxes and by reinvesting in the business and that's one of the great parts of running your own agency in business so that's all I got hopefully that does help you and give you an idea of how much you can start to make in the first couple years year one year two don't expect to make you know a lot and any at all you know I would just say be ready to literally break even your three four you're definitely gonna be in the profit zone as long as you're hammering away and it still is a grind like you don't just sit there and and it shows up your three and four like you scratch and you claw for every single policy that comes into the business and you you work your ass off for it so you got to make it happen if that brings any value to you please give us a thumbs up subscribe share this with somebody who's just getting started we also have Chris Costantini calm There's the packages that are available with the five sessions to get your agency set up.
My goal with that is to try to almost duplicate Adelphia, my own agency, into someone else. Basically, almost give you all the infrastructure and obviously you plug in and do your own thing, but it's really to help you speed up the process. Don't make those same mistakes in those zero to three to six months.
That's where all the learning happens, but that time can be really cut down in speed. The sooner you get this thing rolling, like whatever the cost is of this consulting package is, is going to be far outweighed by the time that you are saving and are speeding up and making more sales. Like it just, it's a no brainer that you should do this.
And that's why I feel comfortable and excited to offer this to people. So highly recommend that. Take this not just for me, like anybody out there that's willing to give you advice about how to get your agency started. I highly recommend you do it.
Because that's the only thing that can speed up your process is knowledge. So you're going to make a ton of mistakes in that first year, but speed it up with knowledge and learning from others. That's my piece of advice on this Monday morning in 2022. So hopefully this does help.
I wanted to remake this. I think it'll be valuable for a lot of people out there. So give us a like, subscribe.
Really appreciate it. Check out ComQuote. And if you need help, hit me up on ChrisCosmody.com. We'll see you guys soon.
Peace.