Have you been considering the idea of starting an insurance agency? This is the right time to do so! Insurance needs have never been so high and agencies are always in demand as the population ages, needs and protections change, and life goes forward. In the following paragraphs, we’ll offer 7 steps to help you build your own insurance agency. Let’s get started!
1. Construct your business plan.
While it’s tempting to avoid this step and move on to the next, there are critical reasons behind completing your business plan before making related decisions. This business plan for insurance agency is one that can be easily followed and crafted to suit your own style and flair for business. The results will be a document that you can refer to again and again in the coming years. If your goal is to learn how to start an insurance company, carrying insurance products for a single entity, you’ll also want to follow these steps and include the following components in your final document, as well:
2. Compose your mission statement and objectives for the insurance agency.
Placing your personal mission statement into a document will remind you of the “why” or purpose behind starting the insurance agency. The mission statement, when inserted into the final business plan, will be the first item read by potential investors or lenders and one that is always appreciated. Understanding the mission of someone in starting a business goes a long way toward funding that desire or dream.
In addition to crafting a mission statement, you’ll need to place the objectives for the insurance agency into the same document. Offer five to six objectives for the business, either personal or professional, in a way that suggests you’re seeking long term growth. These objectives aren’t to be small or inconsequential; they should be large and visionary in nature. If, for example, you want to start an insurance agency and construct a franchise to blanket the nation with agencies based on your model, this is the time to divulge that vision.
3. Assess your target audience.
The best way to correctly market your new insurance agency is to create a “typical” customer who will want your agency services. Consider the individuals you know who want certain kinds of insurance and why. Is there an average age of those individuals and do they have similar socioeconomic lifestyles? Do they live in the same region or county? What kinds of insurance would they want to package together? Create a demographic customer who will represent your typical customer and be prepared to craft a marketing plan for your target audience.
4. Analyze your insurance agency competition.
Although this step may have some roadblocks, establishing a sense of your competitors is vital for your agency growth and well-being. The offers of competitors are a potential threat to your agency; therefore, you’ll want to be prepared to offer unique or special services that competitors do not. Consider how many insurance agencies, selling similar products, are within your county or region. What are the pricing models for the insurance offers? Are the agencies large or small? Do they offer any package insurance policies or specialty policies? Every item you can discover about the competitors will add to the ability of your business to overcome them.
5. Secure a location for your agency and select an agency name.
At this point, you’ll want to find an agency location that will provide advantages over those of your competitors. Consider busy corporate areas, retail districts and other community areas where people are working. When a location is secured, add furnishings, computer equipment, and decor items as needed. In addition, this is the time to create your agency name. Create the legal entity for your business as either a sole proprietor, C corporation, S corporation or limited liability company.
Register your agency with the IRS to obtain a tax number and secure any permits or licenses required to do business at your location and in your state. When your tax number is confirmed and legal status in place, approach a bank to establish a business account using your agency name. You’ll want to keep the business expenses and income separate from personal expenses and income and seek the counsel of an accountant to verify that you’ve taken the right steps to set up everything properly.
6. Build your marketing strategies.
Marketing is the method by which insurance agency owners can gain recognition in the region and build trust among other business leaders. There are multiple ways to market your agency; however, more importantly, you’ll need to build relationships. To effectively do so, join community clubs and charitable groups or consider nonprofit organization leadership roles. Take leadership in sponsoring sports teams in local schools. Host a parade float for a neighborhood parade. All of these efforts will result in the growth of your agency business, as individuals will connect you with the offerings and services of the insurance agency. Yours is now a position of trust and responsibility; such efforts will drive traffic to your door.
In addition to building relationships, consider additional ways you can announce the opening of the insurance agency. You may want to place opening announcements in local newspapers, offering gifts to guests who stop by to meet you. You may want to host a wine-and-cheese gathering to announce your new agency. The efforts you choose to employ should suit your personality and interest in others around you.
Larger marketing efforts will need to include a well-designed website. If you want to create a seamless process to invite potential customers to ask for quotes, ask your website developer to create buttons for that purpose. Start a Q & A blog on your website about local items of interest, as well as national trends or insurance news. Ensure your website has fresh, trending and read-worthy information every day. If information isn’t current, potential customers will assume your capabilities aren’t, either.
Posting on social media can bring new clients to your agency, particularly if they respond positively to posts you’ve made. If you aren’t adroit at this, hire a virtual social media manager who can take care of regular, daily posts on behalf of your business. Social media requires constant updates, as it is moving quickly 24/7. If your posts fall even a day behind, viewers can lose interest. Use images or short video clips and humorous stories to create the experience social media viewers enjoy and, by the way, have fun doing so.
7. Place all components of your business plan into one document.
It is now ready for presentation, if needed, and can be used to secure startup or seed funding from investors or lenders. If offered a loan or startup funding, carefully consider the ties that come with it before agreeing to any offers.
The establishment of your insurance agency is a multi-level effort to engage in relationships that create trust, market strategies that are successful, build a mission statement and objectives, create a financial plan and forecast and create other components that fit into your business plan. The completion of your plan and the efforts you will make in establishing your agency will carry your business through to continued growth and success.