Insurance Soup Blog
If we say nothing else of 2020, we can surely all say that it tested our personal and professional limits across the board. Whether you were forced to conduct business at home, on the fly, or you were forced to restructure how your business ran altogether, we all found new and improved ways to adapt around these trying times.
Some would say, "This year has brought so many challenges. Why would I tempt fate and risk going out on my own now, of all times?" Others might say that in a year where so much is already changing, maybe it's the best time to really make a change. The answer to that question is going to be different for every agent based on a host of contributing factors. Whether you think striking while you're already in a state of transition from 2020 is a good idea or if you think it's smart to hold on until things stabilize for everyone, here are the things you need to consider.
DOLLAR BILLS, Y'ALL
Going independent and opening your own agency is the same as opening any other small business. Not only do you need capital going in to start your agency, you have to be prepared for your agency to take up to 2 years to begin making a profit. You'll also need to be prepared to invest the bulk of your time and energy into your new endeavor. This is often the main stumbling block for agents looking to branch out on their own. Things like financial stability and personal commitment to success are major factors that play into this decision.
TIMING IS EVERYTHING
When deciding whether or not the time is right to forge a new future for you and yours, you've got to consider timing on more than one level. Certainly you'll have to look at your personal life. Do you have a family relying on you and how will this impact them? Are you solo but heavily in debt? Would it behoove you personally to wait a year or two? Or is the time absolutely right for you right now, and you may not have this shot again? You've also got to consider what's going on in your industry at the time of your new venture. Insurance is one industry that seems to have survived the clutches of 2020 but that doesn't automatically guarantee success for your new agency.
ACCESSIBILITY TO THE MARKET
This will be each agent's most serious hurdle when starting off on their own. You will need to research and decide what markets you need access to and how you'll go about getting access to them. Young agencies do tend to have a harder time gaining access to national carriers It has become extremely difficult for fledgling agencies to get direct access to the large national carriers due to the requirements they place on volume, so be prepared to get creative and find a way to make this happen.
HOW'S IT GOING TO WORK
This takes us back to dealing with the ins, outs and intricacies of the daily minutiae of running a business. What kind of overhead will you require? Will you need to hire staff, and if you do, do you have the capital to support them? If you aren't in a position to hire support, do you have the wealth of experience to juggle all aspects of the business, including sales, marketing, processing, service, and accounting? Deciding how to and who will run your agency requires lots of planning and consideration.
Branching out on your own is something that takes a great deal of thought, research, planning and preparation. Be sure to do your homework on your own financial stability and that of the market that you plan to support you. And most importantly, always be prepared to adapt to meet the needs of your own agency in whatever market you choose.