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.

7 Tips for Starting an Insurance Agency

If you’ve decided to start your own insurance agency, congratulations! This is an exciting time, when you’re at the beginning stages of what will hopefully be a very rewarding and successful journey. But you need to know that, while starting an agency from scratch is possible, it’s not going to be easy, and you’ll need some guidance So, before you jump right in, there are some things that you will need to consider in order to protect your assets and investments, as well as to make sure your business doesn’t flop.

1. Figure Out What Products You Want To Sell

This is the first and most important step when starting any business. There are a lot of different types of insurance you can sell, so before deciding to start an agency, think about what you want you’re interested in. Do you want to focus on health insurance? Medicare? Commercial insurance? All of it? Knowing this ahead of time is important so you can get a license for the products you want to sell, and so you can also devise an effective marketing strategy.

paper with a red certification ribbon on the bottom
Before you can start selling insurance, you have to make sure you have the proper licenses.

2. Get the Proper Licensing

In order to sell any insurance products, you will be required to train for a certain number of hours and take a licensure exam. You will need a license for each type of insurance you sell, as well as a general business license; this step is extremely important, because you need to make sure you are in compliance with all regulations when selling insurance.

3. Plan Your Business

Create a detailed and well thought out business plan that includes a specific set of goals you want to achieve. Your plan should include details on how you are going to finance your business, such as with a loan from a local bank or credit union – and any creditor will want to see your business plan before approving you for a loan. You should also sit down and work out all the expenses related to starting a business, determine who your target market is, and decide what you will name your business.

4. Decide On A Marketing Strategy

Once you’ve planned out all the basics, it’s time to start working on your marketing strategy – after all, you need to attract customers to be successful at selling anything! And, since customers won’t come knocking on your door, you’ll have to find them with a targeted marketing strategy that takes into account who your ideal customers are based on the types of insurance you sell, and includes in-person networking, social media, direct mail, email campaigns, etc.

5. Protect Your Businesshand with a bubble over it with a person in a business suit and a building behind him

Don’t forget that you’ll also need to protect your business with commercial insurance! You should at least have general liability and cyber insurance, and in some states you will be required to have Professional Liability Insurance or Error and Omissions (E&O) Insurance to register your business. Having these policies will protect you against system hacks, mistakes made by you or employees, or other unforeseen events.

6. Get Software and Management Systems

When you begin selling insurance to leads, you will need a system to help you manage your clients, so consider a software system that can help you with scheduling, appointments, and keeping up with leads and customers. A software and management system will help you become more efficient and effective by reducing time on tasks, thus helping you become more successful.

7. Get Access To Insurance Carriers

After you get your licenses, create a business plan and a marketing strategy, and get set up with insurance and a software system, the last step is to get access to insurance companies in order to have products to sell. You will need to get an appointment with carriers, and be ready with all of the above: they will want to look at your marketing plan, a solid business plan, as well as proof of licensing and E&O coverage.

After completing the above steps, you will be ready to start your insurance agency , and begin selling insurance! Just remember, selling insurance is a customer-service-based business, so after attracting leads through your marketing, you will need to put your knowledge and selling skills to the test. Prospecting isn’t easy when you’re just starting out, so if you find that you need some help finding leads, work with a reputable company like Benepath. When you work with Benepath, receiving reliable, exclusive leads is the easy part: we provide you with real-time leads through a secure process, and give you a customized thank you page so your leads will be ready for your call. To get more information, fill out the form above, or call 866-368-0377.


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