This week’s blog post is going to feature someone pretty damn special. He’s someone I’ve known since high school, not that he knew me because he was WAY older than me. I consider him a friend, mentor, and one of the most successful people I know. He’s managed to succeed in an oversaturated service industry that every single person in this country needs, even though they may not necessarily want to pay for it. Not only that, now he teaches others how to do exactly what he’s done, while focusing on the most important part of any company….its customers. Scott Grates owns a little State Farm Insurance Agency in Ilion, NY and while it may be small in size, it’s impact on the community is huge. He’s also taken that success and founded Insurance Agency Optimization, taking everything he’s learned and built and helping other insurance agents do the same.
One of the main reasons Scott has succeeded is the importance he’s placed on trust, honesty and always making sure every situation for every customer is a win/win. With how much I’ve learned from him personally and just from indirectly seeing the impact he makes, I thought it would be great for people to hear straight from him how and why he’s making the moves he’s making.
Scott, thanks for taking the time to do an old school back and forth email. I think it’d be good to give people a little bit of background on how you got started on your own, how did you fare those first couple years out in the scary business world, and now that you have that perfect 20/20 hindsight vision what would you have done differently, better, or sooner?
Thanks for having me “young Nick.”
My background in a nutshell…
Graduated with a journalism degree (I planned on being the next great sports reporter for the newspaper). Now, many reading this may be asking what’s a newspaper. So, I guess I am really old!
Unfortunately (or as it turns out fortunately), I had a ton of debt after graduating college. the newspaper offered me a job, but it was for $6 an hour at the time. Yeah, that wasn’t going to cut it. I hit the job boards and saw an opportunity to sell furniture on nights and weekends and thought to myself, how hard can that be? As it turns out it was REALLY HARD. But, it turned out to be a fantastic way to cut my teeth in the sales industry.
Now here is the part where I “yadda, yadda, yadda” the next 14 years. During that time I become a top 5% producer nationally in the new home construction industry. Then, the housing bubble burst and I was out of a job. What came next? I became a top 5% producer nationally in the mortgage industry. Then, the market crashed in 2008 and I was out of a job. What came next? Insurance. Why? RESIDUAL INCOME.
I was sick of the month to month sales grind and I was sick of working like mad to build somebody else’s business (only to be back to square one) as soon as markets shifted.
At the age of 32 I decided to start over. I put my family on a “beans & rice diet,” cancelled all future vacations and drove an old Honda Civic with over 100,000 miles. Starting your own business from scratch is less than “glamorous.” I was working 70+ hours a week, stressed to the max, paying through the nose for employees and keeping $0.00 for myself. Just the opposite actually. After all the dust settled after my first 18 months I still hadn’t taken a paycheck and was over $30,000 in debt.
Honestly, it was the most fun I ever had.
Yes…I’m that kind of strange.
This is why I consider you a mentor. Your path and my path have been very similar. You had to have felt on top of the world during years in sales where you were in the top 5%, and then to have it all ripped out from under you, where was your mind at when that happened? I think a lot of people can relate to that with everything that happened in 2020, and honestly what’s probably even going to happen in the next couple of years. Do you think all of these major ups and downs have helped build who you are today? I think a lot of people look at success as something that either just happens or it’s immediate and long lasting, and I’ve sure as hell learned that it couldn’t be further from the truth.
Sacrifice. That’s the key to take away from your story to starting your own business. It’s so hard to think that, “I built a great life early on and now to think I have to start over and suffer again?” I think that thought stops many people from chasing their dreams. It’s so hard to say to yourself, alright self, I did what I was supposed to, I went to college, I got a career, and I’m completely unfulfilled…now what the hell do I do? My opportunity was simply born out of straight frustration with life, and I didn’t have a family to support at the time. How did you convince your wife that this was the way to go? Obviously you’re a great salesman/woman/person (see, I can attempt to be PC) so that helped, but she had to be slightly hesitant to the thought of working backwards, or was she completely on board because you’re just that awesome?
I was lucky in the sense that I only had myself with no overhead, no office, no employees…just trying to fill my schedule with projects. You went full bore and 18 months in you were having a blast, but the numbers were showing red…was there a point where you thought I have somehow offer something different from other insurance agents?
Regarding my mindset when things crashed in 2005 and then again in 2008…it was tough. It was humbling. It was frustrating. I was angry that I had spent so much time and energy, late nights, weekends, missing out on social events all to advance my career only to learn I was nothing more than a number on a spreadsheet in the end.
It was also scary financially. When I left college I was obsessed with making money. I chased money so I could buy materialistic crap that I thought would validate my “success.” I wrote down $30,022 on a post it note. That was the HIGHEST ANNUAL income my father ever earned working in an awful factory (pre-OSHA days) during his entire career. I vowed to do better. In February of 2014 I earned ONE monthly commission check of $32,000. I obsessed about money, I found it and quickly realized I was never more UNhappy in my life. How is that for irony?
One year later I was out of work, forced to sell a house we couldn’t afford at a $70,000 loss and was on the verge of bankruptcy. Through tough times and adversity, you find out who you really are. It was then I realized money wasn’t my WHY.
Regarding the sacrifice question…you are spot on. Too many people don’t take chances and pursue their dreams because they are working towards somebody else’s agenda. They are trapped in the “this is what I’m supposed to do” or “who I’m supposed to be” mindset.
My wife…I can truly type all day about how amazing she is, truly. Funny you talk about “selling her” on the idea of starting a business. I say all of the time the greatest “sale” I ever made was convincing her to marry me. But here’s the simple answer…I build teams and family is no different. My wife and I lead “Team Grates” and we have since 2002. We have a clear vision for what makes our team successful, we have clearly defined roles, we have very open and honest discussions around all decisions and we trust and respect each other. Do we always agree? NO WAY! But that’s healthy and part of what makes us a great team. We are both passionate about winning and living the vision for our best life. With the decision to start the insurance business (and each business there after), we weighed all options and ultimately trusted that we’d both do what needed to be done to move us closer to where we wanted to be.
Speaking of “all in with no return question”…self-doubt will cripple a person’s ability to take action and with no action nothing ever happens. We’ve always had a “No Plan B” mindset. It’s either “all in and don’t look back” or don’t bother with everything we do. I can honestly say even during my darkest, scariest moments I never questioned the path I was on. I like to gamble. I learned early in my life that the best bet I could make…was going all in on myself.
I had those same exact feelings when I was let go as a graphic designer in 2010. Unemployed for 365 days on the dot from that point forward. I beat myself up constantly over this “missed opportunity” of having my career job established and then to find out I was the most expendable of a small group of employees, it hurt like hell. Then I was stuck in unemployment hell where I had at least 40 interviews for graphic design type jobs over the next year, didn’t have enough experience for some, had too much for others, most were less than I was making prior, some were even less than I was making on unemployment. I was a top 3 candidate for a dozen jobs and never could quite get the offer. I had a horrible view of myself during that time. Finally getting that job at the tv station in sales I think really changed everything. I had no choice but to, as you said, “cut my teeth in sales.” And I definitely learned that selling television advertising just after a financial crash in the 170th ranked market in the country was easier said than done…well I learned that selling was the easy part, getting people to keep going and paying was another story. Having to go through those struggles helped forge the business I’m growing today though.
Chasing money seems like a blast when you first start doing it right?? When I had a job, you know what you make for the year and you budget it out, now, I make as much as I put into it, and that chase initially is exhilarating. But that’s exactly what it was, a constant chase, figuratively and in my case sometimes literally…had clients putting money in their garage, under shit, around shit…just exhausting. I finally learned that even if I got “rich”, this formula just isn’t sustainable. I keep saying, and I probably heard it from somewhere, that “rich people go broke because they lack the main thing wealthy people have and that’s knowledge.” And I think part of that knowledge is without question to figure out WHY the hell do you get out of bed every morning? Then how can you leverage that into making money? I ran across a podcast with Simon Sinek right around the same time we connected and you both were preaching the exact same thing that resonated with me and it was trying find your WHY. It finally dawned on me that I wasn’t really a graphic designer at heart, and I wasn’t a salesman at heart…but what I did find out that I loved to do was to help small business owners or even Multi-level marketers how to create success. Everything changed for me from that day forward.
I think you give a lot of great advice for folks that may want to follow their dream but so much of their life is intertwined with their partner. It’s one thing to go off on your own with no one else to worry about, but it’s a completely different story when your decisions affect your loved ones. You started right in your own home with honesty and integrity and respect…and then built your entire company around those same qualities. I think most people can agree that the insurance industry as a whole, to the consumer, is full of shady convoluted bullshit to confuse us so we have no idea what the hell were paying for? I’m right, right? Do you think this is how you’ve been able to take a small insurance company and corner a huge market share in our area? I think so many people can benefit to learn how to sell to people in an industry that’s oversaturated. I have a lot of friends doing MLM (multi-level marketing) and frankly social media is flooded with stuff constantly from everyone. Then there’s plenty of small business owners in the trades that know their trade, but don’t know a lick about customer service or sales…what advice do you have for these folks to stand out in a sea of nonsense?
Ha ha ha…well, I’m not sure I’ve ever been told my industry consists of “shady convoluted bullshit” before, but you do bring up a good point. Regardless of the product or service you are offering it’s important to understand your market and also the perceptions and/or misconceptions associated with it. I quickly learned that people dislike things they don’t understand, and most don’t understand insurance. This industry is also much different because we sell an “invisible product.” People make purchases based on emotion, not logic. So, when something looks, good, smells good, tastes good people want it. However, insurance is a logical product which extracts zero emotional attachment. And finally, insurance is a commodity. Yes, there are differences company to company and policy to policy, but at its core about 90% of the protections are the same.
Knowing all of this I took a contrarian approach to the agency. For starters, I do not SELL insurance. Instead, we educate people on how it works when they need it the most. We share real claims stories from our community to bring to life the reality of the hidden risks we all face. Once people understand how it works, then they can make decisions that make the most sense for them should they ever find themselves in certain situations.
Next, I had to create a unique and memorable customer experience. My mantra is “If you aren’t unique, you are weak.” When everyone is doing business the same way, do yours the other way.
And finally, people want to feel special, they want to be a member of a tribe that makes them feel appreciated. We always lead with our hearts and everything we do is to improve the lives of our customers (big or small).
So my best advice for other small business owners? Answer this question…what problem does your business solve for people? Then, become OBSESSED with satisfying THAT problem. Too often new entrepreneurs focus on their own needs or their products and services and they miss the boat on the ONLY thing that matters...how does what you offer make the person’s life you are offering it to better? What’s in it for THEM? Always start and end with that question.
People do business with people they KNOW, LIKE & TRUST. Become that person and you cannot fail.
Educate others
Help make their lives better.
Be unique.
Be memorable.
Make others proud to be associated with you.
Don’t look for blessings, instead BE a blessing.
Ok maybe I was a little harsh about your industry, but I think you’re right when it comes down to, it seems to be made intentionally complicated where you need a specialist to help you…similar to the credit industry, anything to do with law…just seems some things are made harder to fool people. But that’s where you come into the game with your approach on not SELLING insurance, but teaching people about it so they can make the best choice for themselves and their families, and much of the time you’ve proven that they choose you and your team. So much of that comes down to that team you’ve built and how you’ve taught them to talk to people on a personal level rather than a business level.
That was the major change to my approach that I took about 5-6 years ago also, which you were a major force behind that shift in thinking, where I went from wanting to be this “Mad Men” style advertising agency with the big fancy downtown office and the fancy cars and the power suits and all that….then I realized a lot of that was everything I hated about the business world. The idea that you had to wear a nice suit and tie to be successful. I learned that you’re successful in whatever makes you most comfortable. I don’t want to work with every single person on the planet, mostly because I learned I don’t like a majority of them haha. But the people I do work with, they are like family to me, many of them have become some of my closest friends and confidants. The first thing I try and tell new clients is that we’re in this together…I don’t grow without successful client interactions. Same with you, you could easily just skate by doing the insurance gig yourself, grab up some of that residual income and then retire, but you keep thinking bigger and bigger. I can’t wait to see what else you have in store for the future as I think your approach to sales is something that can translate to any number of industries, especially in this day and age of the “fake” and the “made up”. Authenticity is key and you have it in spades my friend!
Thanks so much for the chat my friend and I look forward to many more of these in the future!
I often say the driving force behind starting my own business was it allowed me to throw away all of my ties! I wore a suit and tie for the first 10 years of my career and hated every minute of it. Why? Because it just wasn’t me. If you are going to connect with people and be relatable to people you must be authentic. Well, it’s difficult to be authentic when you aren’t even dressed the way you’re comfortable dressing.
Here is some solid “business advice:”
BE YOU!
You have to be your own first believer in life and in business. Once you truly believe you are worthy of greatness in your own heart and soul, that energy becomes contagious, and others will want to be around you and support your mission.
I’m a polo shirt and shorts guy in the Summer and sweater and jeans guy in the winter. Nobody has ever been offended or put off by the fact that I don’t wear shirts and ties in the past and if I find somebody who is in the future…well, they just aren’t a person I’d care to work with. You were spot on with your assessment that we don’t need ALL customers/clients, we only need the RIGHT ones.
As always, I’ve enjoyed our time together as well Nick. I’m proud of all of the work you put into your business and helping others who are pursuing something on their own too. Keep fighting the good fight brother. None of it is ever easy, but all of it is worth it.
Cheers!
Thanks so much to Scott for the time. If you’re interested in getting a quote for any type of insurance, I highly recommend reaching out. Find his Facebook here or visit his website insurethevalley.com.
If you’re a State Farm agent and reading this, check out his Agency Optimization system to improve the performance of your agency.
If you’re looking for a good time, call Scott at 867-5309 (don’t if you’re in the 315 area code, I think it’s still Herkimer County Community College)
Thanks for reading everyone!