Would you be excited to start your independent agency? Starting an agency from scratch is possible although it can be very challenging. With an agency, you have an opportunity to be your boss. Having the satisfaction of helping people protect their investment and valuables helps you have a good income for many years.
In many ways, insurance usually is no different from other types of business opportunities. However, it comes with some unique considerations. Take a look at the steps you can follow to opening your insurance agency.
Write a Business plan
Having a sound business plan puts your agency on the real progress and ack and communicates your value to any potential stakeholders. In the business plan, you should introduce people who are responsible for executing the executive plan of the agency. Explain the steps you will take to acquire customers and the kind of products and services you will provide. Identify your target market, be it, suppliers and competitors. Describe any advantages your agency has over its competitors as well as analyzing the risks. Include the initial budgets as well as cash flow projections and production forecast.
Choose a Legal Structure
The way you structure your business will determine the amount of personal liability you can take. There are different types of structures which include; sole proprietorship, partnership, corporation, and Limited Liability Corporation. Each of these structures has their benefits and risk. The simplest form of structure is sole proprietorship which carries the most significant personal liability in case the business burst. However, as a business owner, you get the chance to enjoy the most significant benefits.
Register Your Agency
Choose and register the name of your agency. Choose a name that conveys your agency benefits, avoids clichés and is easily searchable. Search for the name you want to ensure that it is available and does not infringe on any copyrights. Once you get the name you want, register it with your state government.
You need to get all the required agency licensing. If you choose to operate your business as a sole proprietor, do not hire other agents. You only need an individual license to work legally. If you plan to bring other agents into your business, you may choose to incorporate them, and this requires an agency license.
Starting your independent insurance agency will require some minimal amount of startup capital, its an investment. The startup cost you would need may range from $5,000 to $50,000 depending with factors such as business location and how you plan to organize and run your business. Additionally, you can start your agency as a home-based business and eliminate some upfront costs such as setting an office and paying rent charges.
Just like all other businesses, the success or failure of your business will depend on the nature and type of management you will put forward to run your business. There are a couple of specialized tasks and activities that must be run on a daily basis. You may not necessarily need an agency management software, but having one is a good choice.