It’s hardly a surprise when MANA receives a communication from an individual who has reached a certain point in his or her career when the prospect of becoming an independent manufacturers’ representative is considered. Generally a query is received via phone, e-mail — and increasingly less via regular mail — asking, “I want to become a rep, what do I have to do now?” Rest assured that MANA is well positioned to handle this question.

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In general terms, here’s how the question is posed: “I’m in my late 40s, married with a couple of children. I’ve spent 20 or more years in my industry and realize that my chances of climbing the corporate ladder are becoming more and more remote. It’s time for a change. I figured why not take all the contacts, experience and knowledge of the industry/product/territory that I’ve achieved, become my own boss and parlay that into a career as an independent manufacturers’ representative?”

While entertaining that question, the first consideration is to determine what recommends the individual to be an agent. Usually, these are the people who fit the profile of a typical startup:

• Married and in their late 30s to mid 50s.
• Have one to two decades of corporate sales experience.
• Their careers have been spent mostly in the same industry that they desire to work in.
• They’re armed with enough savings or equity in their homes to allow them to survive the start-up period.

A little bit more difficult to define but certainly necessary is the following: Is the individual an entrepreneur or an employee who’s used to receiving a regular paycheck?

After considering those general attributes there are a number of additional qualifications:

• It’s recommended that the oft-referred to SWOT analysis be completed. Determine the agency’s strengths, weaknesses, opportunities and threats.
• Compose mission and vision statements.
• Commit to measurable objectives.
• Develop strategies and action plans that will lead to those objectives.
• And finally, be armed with a financial plan that mirrors the contents of the action plan.

All of the aforementioned just scrape the surface of what the individual has to do in order to get started. There’s much more.

The Importance of Reputation

In the article that preceded this one, several independent manufacturers’ representatives described how and why they started their own agencies. One important trait they all possessed was that of a sterling reputation in their previous careers. That reputation stood them in good stead as former colleagues, customers and principals touted their talents to others and referred lines to them.

Possession of such reputations allows agents to work with people (e.g., customers) who know and trust them and who will take the time to provide interviews in order to sell products and services. It’s that reputation coupled with product and territorial knowledge that allows the agent to effectively serve as the consultative solution provider for customers.

Reputation is no less important when it comes to working with principals. An examination of the backgrounds of MANA members shows that many current representatives have spent considerable parts of their careers in corporate sales. What that means is they’re armed with a wealth of corporate experience they can bring to the table. In addition they provide operational ideas, marketing expertise and even technical innovation in completing the expected selling skills and customer relationships.

The importance of a sterling industry reputation can’t be overstated. It’s that reputation that can be put to use when it comes to attracting and signing reputable lines. When it comes to getting lines, there are a number of effective methods by which agents identify, attract, sign and maintain profitable relationships. Some of those methods include:

• Once again, referring to the previous article, several agents maintain that they get their first line by taking on their last employer as a principal. As a matter of fact, many independent representatives describe how they were at one time a direct salesperson. When their employer made the move from direct sales to an outsourced sales force, they were asked if they would be interested in setting up their own agencies and taking on the line they’ve been selling for years.
• Agents cite MANA and ads that appear in Agency Sales as excellent sources for obtaining lines. An agency’s listing in MANA’s online directory can serve as a magnet for manufacturer inquiries.
• Contacting existing customers and networking with agent associates and existing principals are excellent ways to expand a line card.

Finding Customers

Concurrent with filling the agency’s line card is the critical task of knowing where the customers are that you want to sell products to. Key talents in this area are sales and product expertise, a thorough knowledge of the territory, a desire to succeed and an entrepreneurial zeal that will allow the agent to stay the course. Now, here’s the question: Where and how to find customers?

• Just as contacts, networking and existing customers and principals are great sources to tap when it comes to finding principals, so too are they useful when it comes to finding prospective customers.
• Creating and maintaining a prospect database.
• It’s critical that an agency is promoted. When it comes to promotion, that means more than just the company, it includes promoting the brand, the business and the products that the agency represents. The proliferation of electronic communications and social media have certainly changed how an agency can promote itself, but the fact remains that this is a task that has to be professionally performed.

These are just a few of the starting points for individuals looking to open an agency. Much more remains to be done including locating the proper financial backing, working with a mentor, creating a board of advisors, choosing the form of organization (e.g., sole proprietorship, limited partnership) and having the proper legal and financial advisors.

(This article is hardly inclusive when it comes to covering all that must be considered when starting an independent manufacturers’ representative agency. Readers are urged to research articles that have been published in Agency Sales as well as special reports, teleforums, webinars and publications covering the subject that MANA has available via its website.)

MANA welcomes your comments on this article. Write to us at [email protected].