6 Factors to Consider Before Starting Your Own Insurance Agency
At some point in your career, you’ll probably wonder if it is right for you to start your own insurance agency.
On October 10, 1990, I started The Addis Group, an insurance brokerage and risk management consulting firm in King of Prussia, PA. No name, no revenue, no carriers, no customers, no reputation. Only a dream, a network of supportive friends and a unique process.
6 Factors to Consider Before Starting Your Own Insurance Agency:
1. Your Network: In assessing the opportunity for success, I went to my network (i.e., centers of influence and friends) to solicit their opinions. I asked each person three questions:
1. Would you stand behind me?
2. Would you refer me?
3. Would you become a client?
The answers were all positive.
2. Value Proposition: I needed a unique “value proposition” – a process that was different from any other firm in the Philadelphia region. This was necessary to attract and retain insurance carriers, staff and clients. I also knew that my Network would be able to generate referrals if I armed them with a powerful, compelling story about The Addis Group’s approach.
3. Marketing and Business Plan: Essential to the endeavor was the crafting of a Marketing and Business Plan – a road map for the future of the firm. This document also helped secure a credit line as well as attract insurance carriers.
4. Insurance Carriers: Insurance carrier partners were critical to the evolution of The Addis Group. The firm could not exist without a handful of top notch insurance companies who embraced The Addis Group’s unique process. I was aware that attracting these carriers was going to be a significant challenge that would require insurance premium volume commitments.
5. Family Support: This was a huge consideration. Before venturing out on my own, I met with my wife (Bobbie) to confirm that I had her support. In October, 1990, we had two boys (Andrew, age 9 and Jeffrey, age 7) and a third child on the way. Bobbie and I thought deeply about the potential impact on our family as a result of the time and energy it would take to get the business off the ground. We also measured the financial risk factor. Fortunately, Bobbie was a registered nurse who was willing to do what it took to help the cash flow.
6. Passion and Purpose: Last but not least, I had a passion and purpose to design a futuristic agency that would develop business through a unique business model. At 34 years old, I had energy, determination, focus and drive. I also had a heavy dose of fear. I have come to learn that fear is an incredible motivator. It was my daily gut check that got my engine running.
The first few weeks after I started the Addis Group were overwhelming. So much to do with so little time.
Company name, logos, business cards, office space, credit line, health insurance, licensing, computer system, office equipment and so much more. Researching a top notch team of professional advisers including legal, accounting, banking as well as preparing marketing and business plans for the insurance carriers.
In our next blog post I’ll reveal the full story of how the Addis Group went from just a question in my mind, to developing a set of guiding principles, to what it is today.