Insurance business Proposal

Sample Summary of Expense Inputs Estimated Recurring Annual Expenses

Startup Expense Notes - Payroll Year 1 Notes - Payroll Year 5 Year 6 Year 2 - 6 Notes - Payroll Be sure this matches your written proposal for base +

commissions expenses. Ex: 3 FT Employees @ $20K Base + $10K in potential Commissions if goals are met = $90K in this sample.

$130,000 $160,000 Will you hire additional people in a future year? Will there be

higher commissions that align with higher expected sales goals? Will you offer base salary increases?

Cost for advertising to find employees. Career Builder:www.teammemberjobs.com = approx. $300 per year.

Will you advertise in other locations for team members? $500 $500

It is strongly recommended to always be recruiting. You could lose a team member at anytime.

Will you offer health or potential retirement benefits for your team? Will you pay all or provide a monthly allowance towards benefits you are offering? Will you offer after

probationary period or not at all?

$4,000 $5,000 If offering benefits, and hiring more people, will this increase

to include another team member? Will you increase the amount as years progress?

Approximately 8% of the total payroll for your team (Ex: $90,000 x 8% = $7,200). $10,400 $12,800

Approximately 8% of the total payroll for your team (if the payroll increases, this will reflect the corresponding year)

Will you need health benefits for yourself and/or your family? $0 $0 Your own health benefits you might be paying. Will there be

annual increases with the cost?

Recommendation is to leave this blank. This is paid on the Net Income (Income-Expenses). Inputted prior to knowing your

actual profit or loss will skew your net income. The FICA rate is approx. 10.5%, and the Medicare rate is approx. 2.9%. Just

know you will have to pay taxes since no commissions/income/bonuses you receive from State Farm

are pre-taxed.

$0 $0 See Year 1 recommendation, though as you progress with

Years 2 - 6 your net income will most likely increase which will increase this expense.

Potential Licensing or Class Fees? Will you incur additional fees in your first year? $1,000 $1,000 Annualized dues and fees.

TBD expenses associated with payroll? Employees of Future Agents (EFA) Program covers licensing + salary expenses

prior to appointment for 2 FT Employees.

TBD expenses associated with payroll. Ex: Potential bonus monies you will pay out to the team if they

achieve an annual goal? Potential expense for hiring someone else within Year 1?

$4,000 $5,000 TBD Expense associated with payroll.

Startup Expense Notes - Fixed Year 1 Notes - Fixed Year 5 Year 6 Year 2 - 6 Notes - Fixed First Month Rent & Security Deposit? Be sure to research

actual rent for your market area. How much space will you need? What is the approx. Sq. Ft cost?

Annualized Rent or Mortgage expense. Ex: if $2,000 per month x 12 months = $24,000 $25,000 $26,000

Will your rent increase? If you sign a 2 year lease agreement, could it increase a % in years 3 & 4? Then again in years 5 &

6?

Monthly Utility fees incurred prior to opening your agency. Annualized Utility Expense (Electricity, Water, Sewer,

Telephone). $6,500 $7,000 Annualized Utilities, though possibly increasing due to rising

costs.

Annual Fee - Errors & Omissions Insurance. Annual Fee for Errors & Omissions Insurance. If you reflected paying in startup costs, leave blank for Year 1. $1,100 $1,100

Annual fee for Errors and Omissions Insurance.

Will you have any loans? If utilizing the State Farm $25K line of credit it must be paid back in 2 years. Variable Interest rate

= Wall Street Journal Prime + 4% $0 $0

If only using the 25K line of credit, this expense would only be in years 1 & 2.

If using the State Farm Bank Credit Card: $5,000 minimum credit line, up to $25,000 maximum depending on credit score. 0% APR (annual percentage rate) on purchases for 6 months,

thereafter a variable rate of 13.24% - 20.24% APR based on creditworthiness.

$0 $0 Will you continue to have credit card expenses for your

agency?

$ it will Cost to remodel/prepare space? Do you anticipate construction costs?

Any other potential expenses associated with the fixed category? $2,500 $3,500

TBD other potential fixed category expenses?

Startup Expense Notes - Discretionary Year 1 Notes - Discretionary Year 5 Year 6 Year 2 - 6 Notes - Discretionary

Expense to buy desks, other office furniture, refrigerator, microwave, TV, etc.

If you are financing furniture in your office, include an estimated annual cost for monthly payments. Or possibly an expense for buying additional furniture items not purchased

during your startup.

$1,000 $1,000 If financing furniture reflect continued expense in future years.

Expense for phone system or other electronic devices in your agency (not computers or printers as they are leased from

State Farm)

Monthly cost for computers? You lease each from State Farm. Computer + monitor + printer = approximately $40 per month

each. $4,800 $4,800

If adding more team members, be sure to increase expense for leased computers or potential cost increases.

Lunch, Dinner expenses for your team prior to opening? Weekly or monthly lunch expense for team? $1,000 $1,000 Weekly or monthly meals for your team?

Paper, ink, toner, etc. Annualized expense for all office supplies such as paper, ink,

etc. $1,500 $1,500 Expenses for supplies continued

You cant market prior to opening your agency, though this could be an expense associated with purchasing State Farm

branded give-away items. Or possibly $ you will have ready to spend on Day 1 when you open your agency for marketing

expenses.

Annualized Marketing Expense. This should equal what you plan to do in your written proposal. $52,250 $55,000

Recommendation is to continue a marketing budget similar in Year 1, or to possibly allocate additional funds in future years

if it is working well to continue growth of your agency.

Potential repairs you might incur for your office? $1,000 $1,000 Repairs Gas and/or leased or financed annual vehicle expense? $3,600 $3,600 Gas, leased/financed vehicle. Will fuel cost increase?

Local charities you will contribute towards? $1,000 $1,000 Local charities you will continue to give to.

Office Signage Expense (Depending on local ordinances or building codes at your location this could vary from a large

sign, glass window lettering, etc. TBD other expenses? $2,000 $2,500 TBD other expenses?

$21,095 $24,441 $253,150 $293,300

Payroll Expenses Startup Year 1 Year 2 Year 3 Year 4

The amounts inputted below are only sample estimates! Please be sure to think about your own potential expenses for each category using the notes, conversations with your Sales Leader and agents you speak with.

Payroll $90,000 $95,000 $125,000 $128,000

Team Member Recruiting $500 $500 $500 $500

Team Member Benefits $0 $2,000 $2,500 $4,000

Payroll Taxes & Fees $7,200 $7,600 $10,000 $10,240

Agent Group Benefits $0 $0 $0 $0

Self-Employment Taxes $0 $0 $0 $0

Professional Development & Dues $500 $500 $1,000 $1,000 $1,000

Miscellaneous $1,000 $2,000 $2,500 $3,000 $3,500

Fixed Expenses Startup Year 1 Year 2 Year 3 Year 4

Rent/Mortgage $5,000 $24,000 $24,000 $25,000 $25,000

Utilities $500 $6,000 $6,000 $6,000 $6,500

Business Insurance $1,000 $0 $1,000 $1,000 $1,100

Business Operating Loan Payment(s) $0 $0 $0 $0

Business Credit Card(s) Payments $0 $0 $0 $0

Miscellaneous $7,500 $1,500 $2,000 $2,000 $2,500

Discretionary Expenses Startup Year 1 Year 2 Year 3 Year 4

Furniture/Equipment $5,000 $1,000 $1,000 $1,000 $1,000

Equipment Fees $5,000 $3,600 $3,600 $3,600 $3,600

Meals & Entertainment $500 $1,000 $1,000 $1,000 $1,000

Office Supplies $1,000 $500 $500 $500 $1,500

Advertising & Marketing $1,000 $45,000 $46,000 $48,000 $50,000

Maintenance/Repair $1,000 $1,000 $1,000 $1,000 Vehicle $3,600 $3,600 $3,600 $3,600 Donations $1,000 $1,000 $1,000 $1,000

Annual Total $31,000 $189,400 $200,300 $237,200 $246,540

Miscellaneous $3,000 $1,000 $1,000 $1,500 $1,500

Monthly Average $2,583 $15,783 $16,691 $19,766 $20,545