Starting An Agency

Establish a Realistic Timeline

Starting an agency will take time. How long it takes depends on your situation and how much time you have to work on it. It almost always takes more time than you think it will. Expect at least six months to arrange financing and two weeks to obtain E&O insurance. 

Obtain Qualified Legal/Financial Advice 

It is recommended that you seek advice from legal and accounting professionals. They should help you understand the risks, costs, and administration of opening a new business. You should also discuss with these professionals the costs and implications involved if your venture is unsuccessful. 

Get an Overview of the Independent Agency System & Basic Insurance Knowledge

If you have operated a captive agency, you are ahead of the curve (especially if you were able to establish a book of business outside the captive market). You understand how an agency works and are versed in the technical aspects of insurance contracts; however, for as many similarities between owning a captive agency and owning an independent agency, there may be just as many differences.  

Create a Business Plan 

Most agency leaders know the value of an excellent business plan. Besides knowing what you want to accomplish with the agency and how to achieve it, business plans are essential for attracting and maintaining a relationship with most insurance companies. A business plan is necessary for a new agency without a documented track record. The purpose is to simplify the process and lay out the elements of your business plan. 

We will not bore you with the “not planning is planning to fail” but, just about every industry relationship you need will require a Formal Business Plan. This includes carrier prospects for appointments and E&O insurance providers. The business plan comprises a narrative, resumes, and several financial worksheets.