While working in insurance is solid choice that is likely to leave staff members with a lucrative and successful career, going it alone is a dream to which many insurance agents aspire. However, building an agency from the ground up is a great deal of work that requires a high level of planning and dedication. Before starting an insurance business, future agency owners must understand what they are getting into.
1. One of the most important decisions to make before launching a new insurance agency involves determining the type of business structure the entrepreneurship will become. Sole proprietorships are typically the logical choice for new companies but poorly performing or bankrupt businesses of this structure often leave the owner personally responsible for business debts. Forming an LLC or corporation can alleviate this problem.
2. Licensing is another consideration that new agency owners must make; while agents working in the business must be licensed to sell insurance to their clients, those who are planning to open an agency may be required to get a business license or even another insurance license that better defines their intent to not just sell insurance products, but to operate a company that does so.
3. Agency management systems are also important when deciding on how to operate an agency; while not strictly required, ensuring that an automated system is in place to handle the types of tasks that do not require human intervention will reduce labor costs and save sole proprietors or business partners money in the long run.
4. Finally, insurance agency owners need to determine what type of products that they are willing to sell, who they will partner with in terms of what company will cover their customers and a host of other important choices that will directly affect consumers. For example, is the new agency going to specialize? Will staff members or co-owners have the option to seek the assistance of advisors, like those employed by the Captive Insurance Group? In short, covering every base before launching the company is a highly valuable task that could save both money and time in the tough, early months of a new enterprise.
Regardless of agency type, taking time to build a strong foundation for a new business is vitally important. By proceeding methodically and carefully, future agency owners may set themselves up for long-term success.