Agency Startup
Moderators: Josh, independent guy
1. Try local resources through your Chamber of Commerce and SBA office. 2. Purchase software for business & marketing and write your 1/5/10 year plans. Suggest http://www.paloalto.com for inexpensive business planning software. They have over 200 business templates available and should help you pinpoint most general business expense categories. 3. Join LOCAL insurance organizations and attend local meetings. You may find a semi-retired or active retired insurance agent/broker who will agree to "mentor/apprentice" you. Use your internet connection's search engine "property casualty insurance association" then type in your local genographic area 4. Are you licensed? If so, consider going to work as a producer for an existing agency for a couple of years. Experience is the best teacher. 5. Education is paramount: Begin coursework for certifications such as ARM (Associate Risk Management) then CPCU (Certified Property Casualty Underwriter) and CIC (Certified Insurance Counselor). Best regards to your career.
Judith has summed up what you need to do and the order in which to do them. Where were you when I was getting started?
I'm just getting of the ground and I must tell you it's a tough fight. Obtaining your license is the easy part. Finding wholesalers/brokers that will work with you is the hard part. The most difficult task ahead of you is obtaining E&O Insurance, which all wholesalers require, if you plan to go Independent. Once you obtain coverage good luck trying to find companies willing to work with a new agency. There are some which will assist you to some degree along the way but those are hard to come by. If you get lucky you will find an underwriter/broker that is willing to help you when you run into road blocks. Anyway here are rough estimates of my startup cost.
License Related - 500.00
Computer - 800.00
Cell Phone - 40.00/month
Fax Line - 13.00/month
Phone line - 40.00/month
Software - 850.00 plus 115/month
Advertising/Marketing - 500.00 so far
Membership in Insurance Organizations - 600.00 so far
CE Course work - 100.00
E&O Insurance - 2800.00
Total cost 6150 and 208/monthly.
I think sums it up for my costs, I expect these to go up.
I'm just getting of the ground and I must tell you it's a tough fight. Obtaining your license is the easy part. Finding wholesalers/brokers that will work with you is the hard part. The most difficult task ahead of you is obtaining E&O Insurance, which all wholesalers require, if you plan to go Independent. Once you obtain coverage good luck trying to find companies willing to work with a new agency. There are some which will assist you to some degree along the way but those are hard to come by. If you get lucky you will find an underwriter/broker that is willing to help you when you run into road blocks. Anyway here are rough estimates of my startup cost.
License Related - 500.00
Computer - 800.00
Cell Phone - 40.00/month
Fax Line - 13.00/month
Phone line - 40.00/month
Software - 850.00 plus 115/month
Advertising/Marketing - 500.00 so far
Membership in Insurance Organizations - 600.00 so far
CE Course work - 100.00
E&O Insurance - 2800.00
Total cost 6150 and 208/monthly.
I think sums it up for my costs, I expect these to go up.
Thank you everyone for your responses. Do to the fact that I wrote my post at 12:30AM I failed to provide additional background info that would have helped with your answers; sorry, brain wasn't fully functioning at that time!! 
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I am a licensed producer and have been working with a firm as an independant contractor for the past seven years. I am currently using Business Plan Pro 2004 to create a business plan for submitting to carriers for potential appointments. I am planning to join IBA West.
Thank you loudmoth for the breakdown, it definitely is helpful when putting together a business plan and thank you judithlou for providing additional direction and education. To answer Norm, I am planning on starting by myself and using my home office for the meantime to help keep additional costs down.
Norm and judithlou, what were your initial startup costs?
What is the best way to set up a trust account...how much of a float should be in there to cover payments to carriers/wholesalers, etc.?
Thank you again for your help...this is a big step and I want to make sure I do it right!!
. I am a licensed producer and have been working with a firm as an independant contractor for the past seven years. I am currently using Business Plan Pro 2004 to create a business plan for submitting to carriers for potential appointments. I am planning to join IBA West.
Thank you loudmoth for the breakdown, it definitely is helpful when putting together a business plan and thank you judithlou for providing additional direction and education. To answer Norm, I am planning on starting by myself and using my home office for the meantime to help keep additional costs down.
Norm and judithlou, what were your initial startup costs?
What is the best way to set up a trust account...how much of a float should be in there to cover payments to carriers/wholesalers, etc.?
Thank you again for your help...this is a big step and I want to make sure I do it right!!
mls,
Using your home office will be great from a tax standpoint. You will be able to get a deduction on your tax return for things such as utilities, rent/mortgage, repairs and maintanence, insurance, etc. However, you will need to keep good records.
As for the trust account, I would suggest using a normal business checking account unless you will be maintaining balances over $50,000. In that case, I would suggest some type of sweep or repurchase account.
As far as startup costs, the amounts listed by loudmouth should be a good starting point. However, don't forget to add in the amount that it will take for you to provide for yourself or your family. That will be your largest expense.
If want additional information, please let me know.
Norm
Using your home office will be great from a tax standpoint. You will be able to get a deduction on your tax return for things such as utilities, rent/mortgage, repairs and maintanence, insurance, etc. However, you will need to keep good records.
As for the trust account, I would suggest using a normal business checking account unless you will be maintaining balances over $50,000. In that case, I would suggest some type of sweep or repurchase account.
As far as startup costs, the amounts listed by loudmouth should be a good starting point. However, don't forget to add in the amount that it will take for you to provide for yourself or your family. That will be your largest expense.
If want additional information, please let me know.
Norm