If you’ve decided to start an insurance business rather than join an established firm, or already have an established business and are one of the lucky ones without a business plan, the first thing you should do is develop one. According to the U.S. Small Business Administration, a business plan is an essential roadmap for business success. This ever-changing document generally looks three to five years ahead, charting a path for revenue growth.
Coming up with a plan before taking on your first customer will force you to think strategically about the goals and objectives of your business, and spell out how you plan to achieve them. While there are no set rules about what needs to go into a business plan, here are some things you should consider including.
- An executive summary. The executive summary is perhaps the most important section of a business plan. It provides your company’s mission statement, and lays out where you want to take the business and why your business idea will succeed. The executive summary should highlight the strengths of your overall plan and therefore be the last section you write in your draft. However, it usually appears first in your final business plan document.
- Market analysis. This section should include a description and outlook for your industry, as well as information about your target customers and an analysis of the competitive landscape.
If you’re selling life insurance, for example, your target audience may be families with children. If you’re selling auto insurance, it could be anyone of driving age in certain ZIP codes.
In this section, you also should examine and identify your closest competitors to determine whether they have weaknesses or gaps that you can use to set yourself apart. For example, if the competition has cornered the market on seniors, you might want to focus on younger adults – those from their 20s through 50s. Maybe they have limited hours of availability, or are only open at times which are difficult for other agents to make appointments.
- Company description. This is where you should describe your business and the marketplace needs you’re trying to satisfy. Explain how your products and services will meet those needs and specify the types of people, organizations and businesses your company will serve.
- Organization and management. This is where you list the owners, members of the board of directors (if you have a board) and key employees you’ll have when your business launches.
- Sales and marketing. Don’t enter the marketplace with the expectation that potential customers will find you. While that could happen, the likelihood is low. There’s just way too much competition in the insurance industry. That is why you should develop a sales and marketing plan. Some things you’ll want to consider addressing include setting up a website, online advertising, an email newsletter, and using social media tools like Twitter, LinkedIn, Facebook and Pinterest.
- Identify the products and services you’ll offer. Are you planning to sell several different types of insurance, or just focus on one or two? That needs to be clear in your business plan. Also, establish how you plan to work with customers – in person, on the phone, over the Internet or all three.
- Identify your key vendors. Will you be partnering with a big insurance company or helping clients secure policies from several carriers? Spell that out on paper. This also is the part of the plan where you should identify where business supplies will come from and if you plan to use contractors.
- Financial projections. If you’re planning to secure credit for your business, you’ll be required to supply prospective financial data. Most of the time, creditors will want to see what you expect your company to be able to do within the next five years. For the first year, you should supply monthly or quarterly projections. After that, you can stretch it to quarterly or yearly projections for the second through fifth years.
What do you think of business plans - Still relevant (or) old tactic?
Related articles from this Insurance Agent Blog:
+ Increase Retention with an Agency Newsletter
+ 8 Tips for Using Customer Surveys at Your Agency
+ The Perfect Mission Statement for your Insurance Agency