Getting New Blood in the Channel

Agents agree that now is as good a time as ever to get into the business. 

“If I were going to start an agency, there’s no better time than right now,” Sumo Communications founder and One Source Communications strategic advisor Bret Hickenlooper said.

As Technology Advisor Alliance co-founder Ashley Rowland puts it, new agents must make a difficult “walk through the desert,” in which they struggle to piece together enough monthly recurring commissions to establish their business. For many firms, that takes more than three years to develop such a stream. Consider that many deals take more than half a year for the commission to go through.

Hickenlooper, who founded his agency in 2001, pointed to upfront spiffs from UCaaS vendors that allow new agencies to “bridge the gap.” Rowland said she sees many newer partners taking this approach.

“You can front-load some things in the first few years, whereas if it’s all residual, it’s very hard to get into the agent business,” Hickenlooper said.

Despite the path to success, agents in the roundtable agreed that they aren’t seeing a stampede of new partners. It’s true that many firms launched in the last years, but it likely does not match the number of agents that are selling their businesses. 

At the same time, partners remarked that they are not seeing a generational handoff, in which the child of an agency owner takes over their parents’ business.

“We don’t want this market to grow into a space where we don’t get the young blood anymore,” Hickenlooper said.