Starting an Independent Insurance Agency
When the job market is uncertain for both new college graduates and longtime members of the workforce, the appeal of starting and owning your own business is strong. The insurance industry is a top choice for many people because it combines a dynamic marketplace while providing consumers with a necessary, valuable service.
So, how do you get started?
Become an agent. First and foremost, you need to become an insurance agent, and there’s more to it than just making the proclamation. Whether your college major was in an insurance field or not, a strong sales background will help give you the tools to succeed as an independent insurance agent. It never hurts to do your own additional research or take courses that are industry-specific courses.
Valuable insurance training and continuing education resources can be found everywhere online. Here's a few places to help get started:
- 360 Training
- The Institutes (Formerly American Institute For Chartered Property Casualty Underwriters
- The American College of Financial Services
- The Insurance Educational Association
That research and information will be helpful when you apply for licensing as an insurance agent. Each state has different requirements, but you can be sure that you’ll need to take an examination and be certified by the state.
Draw up a business plan. The insurance industry can be complex, so creating a business plan will give you a road map that you can follow as you begin the journey. In your plan, identify the type of customer to whom you’ll be marketing – what is their age and income level? You should also determine how you’ll contact those customers, who your competitors are, where your business will be located, and how – and when – you’ll recruit employees, among other things.
If this is your first business venture, seek out resources that can help guide you through the process, whether it’s a small business association or an agent who's willing to offer advice. And remember that a business plan isn’t set in stone once it’s written – you can change things and adapt as your business grows.
Find financing. Starting your own agency can be an expensive prospect, and in many cases, new independent agents need to secure financing to get started. Bank loans or U.S. Small Business Administration (SBA) loans can be hard to come by and competition for them is tough. That’s why it’s important that you run some numbers beforehand to present a case for why you’re a great candidate for a loan. Another option is private financing. If you don’t have the cash to spare from your own wallet, think about talking to your contacts about investing in your company. When you’re seeking private financing, having a financial plan is equally important – every investor wants to know how his or her money is going to be used and to know that you've got a strategy to make a return on that investment.
Starting your own insurance agency can be the beginning of a lifelong career. If you have the drive and the know-how, you can create a successful business that serves your customers and fulfills your goals.
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