Before I became the president of ECI Agency, I had the opportunity to manage stores and regions with C.R. Anthony Company, The Men’s Wearhouse, and Golf USA.
Fortunately, in most of those situations I was able to manage my stores and regions (even the international operations for Golf USA) as if I were running my own business.
After I decided to step down from my position at Golf USA to spend more time with my family, I purchased ECI Agency from my father, who was ready to retire. It took a while for me to learn how to run this particular company, never mind the leadership positions I’d held in the past!
We had big goals for this company—I wanted to grow the business to cover salaries and my payments to my dad, and I had no doubt we could hit those goals.
So we made several changes right out of the gate. We upgraded all the technology, including the computers and the agency management system. We scanned all our documentation and moved to a paperless system.
We also switched from offering predominately commercial insurance to adding auto, home, life, and health insurance as well. These were important changes, but it wasn’t until 2009 that I realized we had a cashflow issue—a big one.
ECI Agency is a member of a cluster of agencies, and we had been receiving a yearly bonus from the umbrella partnership for the first few years I ran ECI. In 2009, we expected about a $70,000 bonus from that partnership based on the bonuses of previous years.
I knew in my gut that we shouldn’t have been relying on those bonuses to relieve some of our cashflow challenges, but we had become dependent on them. And in 2009, our bonus did come. But it was two months late, and it was $5,000.
It felt like a kick in the gut.
There was no bonus in 2010. I knew if we could get a large bonus again, like we’d become used to, we could get back up and running. But that wasn’t an option.
Something had to change, or we were going to lose it all. I’ll share what we did in the next blog, but until then, let this be a cautionary tale: don’t put all your eggs in one basket. Don’t trust that one big client, that one big sale, or that one big bonus to tide you over.
Think about what you need to do to be sustainable. And work toward that before you reach a crisis situation.