Starting An Insurance Agency? Here’s How To Financially Prepare

Have you decided to start your own agency? If so, congratulations! But getting into the entrepreneurial world is a big step, and you might not know where to start or how to ensure that your new business will be successful. And while being your own boss is great, with that comes a lot of extra responsibility, and it’s extremely important that you financially prepare yourself for your new venture. So, to help you get started, follow the tips below, so your business can flourish.

Find A Great Accountantcalculator next to binders with income tax written on it and a stack of papers

Trying to figure out taxes as a small business owner can be really confusing – after all, your specialty is insurance, not tax law! And the last thing you want to do when starting a business is get into trouble with the IRS because of an issue with your taxes – or even just miss out on write-offs because you don’t know the rules. So the best thing you can do to avoid all of this is to find yourself a great accountant to help manage your finances. Not only will they make sure your money is secure, but they will also ensure that your taxes are filed correctly, minimize legal liabilities, and help you with your investments, as well as with keeping your personal finances separate from your business finances. 

Minimize Your Debt

It’s hard to successfully grow a business if you’re saddled with a ton of debt. You can take out a loan to start your business, but if you have more debt than you can realistically pay off, you will only be digging yourself into a bigger hole. 

Try to find ways you can minimize any current personal and business debt that you have, by doing things like:

  1. Creating a strict monthly budget
  2. Decreasing your business’ spending
  3. Considering debt consolidation
  4. Negotiating with your lenders
  5. Increasing revenue, perhaps by adding products or services, adding new customers, or cross-selling to existing ones

Calculate Your Expenses

Sit down and review your monthly expenses, making sure to take everything into account. For example: how much will your electric bill for your workspace be every month? Car payments? Office supplies? Don’t just allow all of your payments to be made automatically without calculating them and adding each one into your budget. Instead, review all of your monthly expenses, so you can be careful about what you spend, including for your new business. Doing so will help you reach your long-term goals for your business. 

Have An Emergency Fund Readypink piggy bank next toa  gold dollar sign and stacks of cash

Aside from reducing any debt you might have, it’s also very important to financially prepare yourself with an emergency fund. As your business gets off the ground, there might be hiccups along the way, or you might be faced with a slow season without a lot of commissions. You might also have a hard time building your client list at the beginning, which can result in more overhead costs than you have commissions to cover. Try to have an emergency fund readily available that would cover about 6 months of your expenses.

Starting an insurance agency is exciting, but it can also be daunting, and you want your new business to be successful since you are putting so much time, money, and effort into it. If you are worried about the success of your business and are trying to build up your clientele, Benepath can help. We offer exclusive leads –  all you have to do is tell us when you are available to work with them! Benepath will provide you with better tools, more guidance, unsurpassed sales training, and techniques from the most successful agents and trainers in the industry, not to mention the best leads available! To get more information, fill out the form above, or call 866-368-0377.

About The Author: Cassandra Love

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