Being an independent agency owner isn’t like being a captive agent, and it’s different than becoming an independent producer in an independent agency. Being an independent insurance agency owner means that you have to be ready to run a business. Running a business takes money, time, patience, organization, and dedication. Make sure you have all your ducks in a row before taking a leap of faith and starting an independent insurance agency.
Steps to becoming an independent agency owner
The first thing you need to consider when you are starting your own business is how you are going to raise capital. Starting a business takes money – either your own or from an investor. Whether you’re planning on spending your own money, borrow, or raise capital for your agency, you need to make a plan of action. Before you spend a lot of money, you need to have a plan in place for making a lot of money, especially if you aren’t fronting the startup costs yourself. A bank or an investor is going to want to know how you plan on making back the money you borrowed.
The business plan
The first step to becoming independent is to write down your business plan. You may be tired of your captive job, but being unsatisfied in your current position isn’t enough to start a new agency. You need a plan of action before you start thinking about naming your agency and designing your logo.
Identify a need in the market
Before you start an agency, ask yourself how your agency is going to fill a need in the insurance industry. How are you different from the rest of the independent agents in your area? Do you have access to a specific niche market that gives you unique insight and a unique relationship with an untapped client base? What is your marketing strategy for reaching your target market?
Acquiring carrier representation
Once you’ve identified your target audience and put a marketing strategy in the field, you have to make sure that you have the product in hand. If you reach out to clients but can’t pull the trigger on finding them the best insurance for their situation, you’re going to lose clients quickly – and they won’t come back. You need to have a variety of A-rated insurance carriers at your disposal so that you can personalize your client care. Personalized client care is the bread and butter of any independent agency.
As a new agent, insurance carriers are going to want you to prove your worth. They will have restrictions and requirements for every new agent, and these restrictions could hinder your ability to sell. Your biggest challenge as an independent agent is gaining access to carriers so that you can offer clients the best product on the market.
Starting your independent agency with an established insurance broker
At Affordable American Insurance, we understand the difficulties that new agents face, whether they are coming from the captive industry or an outside industry. By starting your agency with AAI, you are independent, but you get access to A-rated carrier representatives so you can hit the ground selling. We also give you the tools, training, and technology to run an agency.