Finding the best ways to make use of your contingency commissions
Coming off a year of hard work and success, we hope that your agency has been rewarded with a well-deserved profit-sharing check. With this check in hand, consider investing these earnings to make the money work for you.
Here are a few suggestions to make the most of your contingency commissions and keep your agency thriving.
Invest in your employees
The success of your agency wouldn’t be possible without the work of your employees – and rewarding them for their contributions is one of the best ways to retain them, boost morale, and encourage continued high-performance. This investment could be anything from giving out bonuses, offering educational courses, or upgrading office furniture equipment that your workers will benefit from. Not only will your employees appreciate being rewarded, but this is also directly correlated to the sustained growth and success of your agency. Investments like employee development programs will help create an empowered and improved workplace culture and help you attract top talent if you are looking to expand your team.
Pay off or down debt
Debt is one of the main obstacles that can hold back an agency or business from reaching its full potential. The influx of cash from a profit-sharing check can be the perfect time to address any debt on your books. Take this as an opportunity to assess your debt situation, the good and the bad. Consider paying down or, better yet, paying off debt to allow for greater cash flow, and to increase your net value and overall profitability.
Launch a new marketing campaign
Have you or your employees had any new marketing ideas in the past that you haven’t been able to act on? Have you been putting off tasks like updating your agency’s website or creating a newsletter? If you’ve been looking for ways to connect better or more frequently with existing or prospective clients, now might be the time to put some money behind your marketing efforts to expand on your agency’s success. By bolstering your digital marketing efforts with your profit-sharing check, you’ll be making your reach and money go further.
Invest in your technology systems
Efficiency is critical to the success of your agency. Whether it’s making sure the computers at your office are up to date with the latest tools and software upgrades or investing in new automated technologies to reduce busywork, put your profit-sharing check towards keeping your agency competitive in a 21st century economy. Following best cybersecurity practices is also critical yet is often overlooked. Ensuring that your agency prioritizes online security can come with costs, such as paying for security upgrades or training employees.
Grow your savings account
The best way to use your agency profit-sharing check doesn’t necessarily involve spending it on something right away. Any experienced agency owner knows that the good times in this industry can’t be taken for granted. Even the most profitable businesses can feel the pain of slowed economic activity. It’s always good to have enough cash saved to cover typical expenses for at least a few months for the inevitable rainy days or when something unexpected occurs in the market. By putting this money aside now, you can save it for any future acquisition plans your agency might have. Whether your agency is simply looking to have capital available to cover upcoming expenses or you’re looking to expand, saving your profit-sharing check in the short term can keep you on track in the months and years ahead.
Use towards an acquisition, book purchase, or hiring a producer
If you are interested in acquiring another agency, a book of business, or expanding your production team, the additional liquidity can help achieve that. Having a down payment on a deal can help make borrowing more affordable.
