For successful producers, the idea of starting their own agency can be compelling. Agency ownership offers the potential for greater control over your career, income, and equity. But it also introduces new responsibilities and risks – from managing cash flow and carrier relationships to hiring employees, building processes, and creating a sustainable sales engine. Building and running an insurance agency requires an entirely different set of skills.
One of the biggest risks is approaching agency ownership with the same mindset that made them successful as a producer. Many new agency owners focus on building a book when they should focus on building a business.
The fact is, the moment you become an owner, questions that someone else used to answer become yours. Are you prepared to answer these questions?
- How much capital do you need to get started? Identify costs for getting your business off the ground and the sources of capital needed to support the agency’s growth and operations.
- What should be included in your business plan? Consider what to include in marketing or operational plans as well.
- Which carriers should you pursue? New agency owners should also decide how many carriers to pursue, how to get appointments, and explore how the agency’s location or specialty could impact those decisions.
- What technology do you need? The right hardware, software, website platform, tech support, and security are key parts of launching a business. Additionally, you will need to identify who will implement and manage your technology.
- When should you hire? Thoughtful consideration should be given to which positions to hire for first, whether that’s a producer, service team member, or administrative assistant.
- What banking and legal structural components do you need to start your business? (i.e., Legal entity, banking requirements, licensing, state regulations, permits, etc.) Get guidance on completing these requirements to ensure compliance from the start.
- How should service and renewal workflows operate? Determine how to document and communicate these decisions.
- How quickly can a new agency generate meaningful revenue? The agency may not become profitable for some time; assess how long you can live comfortably before reaching that milestone.
- Are you prepared for all the hats you need to wear beyond producer? An honest assessment should be made of the skills and capabilities required to succeed as an effective people leader, marketer, business strategist, and research analyst.
The biggest question: Where to start?
The saying goes, “If it were easy, everyone would be doing it.” And starting your own insurance agency is certainly not going to be easy, or without challenges. But it can be done, and done successfully, with the right plan, support, and expertise.
Introducing LaunchPad
LaunchPad is the insurance industry’s comprehensive business-building program designed to help successful producers and former captive agency owners transition to independent agency ownership.
Is LaunchPad right for you?
Visit MarshBerry.com/LaunchPad to learn more about the program.
To explore how LaunchPad aligns with your goals, contact Christine Marciano, Vice President, Agency Development, FirstChoice, at Christine.Marciano@MarshBerry.com or 440.586.7069.
Coming Up in This Series
This is the first in a six-part series exploring what it takes to transition from successful producer to successful agency owner. Watch for five additional articles, released sequentially, covering critical decisions around carrier strategy, technology, financial management, team building, and creating long-term agency value.
