Fellow Agents:
I've been an insurance agent for several years now, and have experience in highly successful captive and independent agencies. Personally, I love the independent side of insurance! Long story short, I'm thinking about opening my own shop and value the wisdom that many of you have from many years and experiences in the industry. I currently do contract sales for a small independent in South Texas and work from my extra bedroom at home. I go into the agency about twice a month to drop off paperwork and pick up a check. The agency provides me with an agency management system, E&O and comparative rater. I do my own marketing, and provide everything else. When the agency gets a file from me it is complete, and already scanned into the agency management system. It costs me from $1200 to $1500 a month on average in lost commissions to be a part of this agency, and that cost will only go up when my renewals start. I'm having a hard time seeing the value in being a part of this agency as opposed to starting my own shop. Do I open my own shop? I have relationships with about 5 companies that said they could get me directly appointed. I'm thinking that I'll need an agregator as well in the begining? Any thoughts??? I appreciate your input!
Regards,
Scuba
Ready to open my own agency?
Moderators: Josh, independent guy
Re: Ready to open my own agency?
First, is there a noncompete in place with the current agency or prior agencies? If yes, then you may have legal challenges. Whatever you do, do not walk away with the agency's client list as a primer for your new agency or any other proprietary information.
Starting a "Scratch" agency can have some exciting moments (cough, cough, and sputter) - just keep your head above water (in terms of budgeting and carrier obligations) and you should do well. Very important!!! BUDGET, BUDGET, BUDGET - you must know where you are financially at all times. If you haven't developed a formal, WRITTEN business plan, now is the time to start. Do not make the jump until you have fleshed out the plan and know it inside and out (http://www.businessplanpro.com/index_c.cfm). How can you establish thoughtful goals if you haven't studied the issue? Your carrier relationships will be enhanced if you can show that you have worked through the plan and that you are purposefully positioned for success. Speaking of carrier relationships, unless you know that you can meet the production quotas of 5 carriers, I would start with one or two and build from there.
You have satisfied the first requirement - desire, passion and expertise. You have interned in the business long enough to see how the sales side goes. Hopefully, you were privy to the management and accounting side of the agency. Be sure to hire an attorney, a CPA and a bookkeeper from the start to assist you with the legal business structure and accounting.
Where will you meet with clients? You might check in a local office park to see if there are single offices for lease. You might even find a spot within an building where the office tenants share a common receptionist, copier, phone system, conference room, etc. It may serve to provide you with an address in a well known office park, which lends to credibility.
For the agency management system, you can start with a program like ACT! or Goldmine for your customer database and marketing and combine it with a solid accounting program like Quickbooks or Peachtree. ACT! and Goldmine have a number of adjunct programs to assist you in your marketing efforts (Activator is an example of an automated marketing program which works with ACT!).
With more and more of the carriers sporting online rating capabilities, you may be able to forgo the cost of a comparative rater (aggregator). Comparative raters are only as good as their updates. Besides, it won't take you long to know who to turn to for a given account.
Consider joining the Big "I" or PIA in your state.
If you need it, "Good Luck!", but I suppose the better sentiment would be to wish you "Good Planning and Execution".
Starting a "Scratch" agency can have some exciting moments (cough, cough, and sputter) - just keep your head above water (in terms of budgeting and carrier obligations) and you should do well. Very important!!! BUDGET, BUDGET, BUDGET - you must know where you are financially at all times. If you haven't developed a formal, WRITTEN business plan, now is the time to start. Do not make the jump until you have fleshed out the plan and know it inside and out (http://www.businessplanpro.com/index_c.cfm). How can you establish thoughtful goals if you haven't studied the issue? Your carrier relationships will be enhanced if you can show that you have worked through the plan and that you are purposefully positioned for success. Speaking of carrier relationships, unless you know that you can meet the production quotas of 5 carriers, I would start with one or two and build from there.
You have satisfied the first requirement - desire, passion and expertise. You have interned in the business long enough to see how the sales side goes. Hopefully, you were privy to the management and accounting side of the agency. Be sure to hire an attorney, a CPA and a bookkeeper from the start to assist you with the legal business structure and accounting.
Where will you meet with clients? You might check in a local office park to see if there are single offices for lease. You might even find a spot within an building where the office tenants share a common receptionist, copier, phone system, conference room, etc. It may serve to provide you with an address in a well known office park, which lends to credibility.
For the agency management system, you can start with a program like ACT! or Goldmine for your customer database and marketing and combine it with a solid accounting program like Quickbooks or Peachtree. ACT! and Goldmine have a number of adjunct programs to assist you in your marketing efforts (Activator is an example of an automated marketing program which works with ACT!).
With more and more of the carriers sporting online rating capabilities, you may be able to forgo the cost of a comparative rater (aggregator). Comparative raters are only as good as their updates. Besides, it won't take you long to know who to turn to for a given account.
Consider joining the Big "I" or PIA in your state.
If you need it, "Good Luck!", but I suppose the better sentiment would be to wish you "Good Planning and Execution".
Re: Ready to open my own agency?
The advice from InsMgmt is spot on. Obviously someone successful and experienced. I would only add that you may want to consider working with a GA, as well. Ours is in the Great Lakes area, but I'm sure there are some in Texas. The companies we offer are admitted, "A" rated, and offer on-line processing. There are no fees involved and you own the business you write. It can help "fill the holes in your net" and keep customers from looking elsewhere. Some specialize in personal lines or commercial. Don't be afraid to ask questions. There's a lot of knowlege and experience out there and so many people, like InsMgmt, are willing to help.
Best of luck to you!
~ Susan
http://www.thehelpfulpeople.com
Best of luck to you!
~ Susan
http://www.thehelpfulpeople.com