Your Guide to Starting an Independent Insurance Agency
Are you thinking about venturing out and starting your own agency? Be prepared! Follow our guide and consider joining the right insurance cluster.
While owning your own business is almost always challenging, getting started is often the hardest part. This is no less true in the insurance industry.
There are many steps to starting an independent insurance agency, including gathering capital, making a business plan, getting licensed, and so on. The trick is to stay organized and thoughtful as you take steps to start your new business.
Working as an independent insurance agent, you'll have the satisfaction of being a business owner and the freedom that comes from being your own boss. That's a lot to look forward to! Here's how you can get started.
Make a Plan
Successful businesses start with a plan. Every business plan has multiple components that come together to create a vision of a unified whole. Your business plan should include:
- An executive summary
- A company description
- Information on products your company will sell
- A financial plan
- Funding information
- A marketing plan
The marketing plan should identify your target market and include a comprehensive plan for reaching your market. Having a marketing plan is especially important for your independent insurance agency because dedicated agents receive marketing help from their parent insurance company, and you'll be competing with those agents.
Your marketing plan should include information such as:
- What sets your agency apart from your competition
- Your target clients
- How you will spread the word about your business to customers (website, word of mouth, social media, etc.)
Having a business and marketing plan is especially important as you begin the process of starting your business. These plans are your roadmap for the next steps and will guide the business decisions you make. Your business plan is also a tool to demonstrate to potential investors that your company is a good investment.
Gather Investment Capital
You're going to need money to lease space, buy furniture, hire employees, set up a website, and more. There are many ways to obtain investment capital. You may choose to get a loan from a bank, work directly with private investors, or some combination.
Have your business plan ready to show to anyone who asks for it. Shop around! The first investor that offers to fund your business may not be the best investor for you. Consider their terms before accepting an offer.
Know the Requirements of Your State
All states require their insurance agents to be licensed. Most likely, you will have to take training and sit for an exam. Most states require agents to be licensed to sell each specific type of insurance they plan to sell, so getting licensed may take a while. You should be able to find out your state's requirements by contacting your state licensing agency or by contacting your local Big "I" state association.
Gain Access to Insurance Companies
You won't be able to sell insurance unless you can gain access to insurance companies. One of the ways that you can gain access to insurance agencies is by joining an effective insurance cluster.
Insurance clusters give agents access to resources, including alliances with good insurance agencies. The more insurance agencies you are aligned with, the better! More agencies mean more options for your clients, better rates, and more satisfied customers. Consider this as you're evaluating insurance clusters for your needs.
Become an Expert in Your Products
Once you've aligned yourself with several reputable insurance agencies, it's vital to become an expert in the products that you're selling. A solid understanding of how each policy works can help you become better at your craft and a more valuable resource for the customers who pay you. Your clients will appreciate every question you can answer without pausing or delaying to research the response. They'll also value how you help them make intelligent choices that minimize their overall risk.
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