Starting your own insurance agency is not as hard as you may think. However, it is a step by step process that could soon see you working in your own little business with hours that suit you. If you wish to build a constant stream of revenue for years to come, then an insurance agency is one of the best ways to go about it.
This is because to ensure that coverage continues, customers will be repurchasing products. The products that you could sell are quite a few: property, causality, and disability, home insurance, car insurance, life insurance and many more. However, before opening your business, there are some steps that you must follow through which are a necessary requirement.
The first thing to do is to make sure you get a license – in order to become a licensed insurance dealer. Without a license you cannot open your business, so make sure that is in order first and foremost. Generally, you will need, what is known as a ‘Property and Causality Insurance License’. You could also obtain – although one or the other would do – a life, health and variable annuity license’. You can get these either through classroom instruction or on the Internet.
The next step to consider is deciding what it is you are going to sell. What will you be offering the general public? By limiting yourself to only certain products you will be doing yourself a disservice. Also, this is not typical of Insurance dealers, as they sell many products at the same time.
The good way to go about it is that you may decide to become an expert in one product, whilst selling different insurance policies. So, for example, you could offer life insurance on the one hand, whilst selling home insurance, health insurance and self-employed insurance plans. You must always offer a variety of insurance plans at all times, and never limit yourself to offering just one or two.
At this stage it is good policy to apply for a business loan, as well as insurance too. Compile a list, within this list you will include the following: Start-up costs, which will include your office equipment. Then also add benefits, wages and insurance such as liability, and errors and omissions insurance. The benefits and wages should be classed as ’employee expenses’.
Once this is done, hire a business plan writer, or an accountant. Get them to write up a plan for your business. This will be in order so that you can apply for a small business loan. A good place to look for business loans would again, be on the Internet. Always use the Small Business Administration’s approved Lender database.
So where are you going to place your business? At this point look for suitable office space. Use common sense. The building should be airy, not stuffy and have plenty of space to move around. It should be well-maintained – on the outside and inside. It should have a consultation room, reception area, good working amenities and air conditioning if at all possible.
It is at this point a decision has to be made between beginning your own insurance business or purchasing a franchise. The advantage of a franchise is that you will be operating under a name that will be already established. You will also have access to in-house financing which will only be specific to that business – and which is provided by the parent company of the business. However, by purchasing a franchise, you will be stifled in one important area – products.
By going it alone, you will be free to sell any products you see fit. However, with a franchise, you will be limited to selling only what the business is already selling. So, the decision is yours to make.