Starting your own business is always an exciting, stressful adventure. The allure of working for oneself and knowing you have unique skills, services, or products to offer is enticing. Opening an insurance agency is no different. Here are the steps you need to know about how to start your own insurance agency.
Choose Your Structure
In America, companies can choose from different legal business structures. Someone who is just starting out and doesn't anticipate ever needing employees often chooses the simplest format, which is a sole proprietorship. This legal structure could work for an insurance agency, but it probably isn't the best as it will limit expansion. A limited liability company is often a good legal structure choice for the small business owner as it simple to set up and limits the business owner's personal liability. Compare your various options and choose which one you feel is best for you.
Write Your Business Plan
Every good business idea begins with a detailed business plan. The act of writing a business plan forces you to answer the hard questions, without emotion. A business plan will streamline your goals, direct your path, and provide insight for the future. A business plan is also a necessity if you want to seek financing or want to partner with someone. Writing your business plan will be time consuming, but thankfully you can find plenty of free assistance to write it. For example, the Small Business Administration will walk you through it, step-by-step.
Register Your Business With The State
Use an attorney to help you with this if you are not comfortable doing it on your own. First, you will need to apply for a tax ID number if you didn't choose a sole proprietorship. You will need to decide on your business name before applying, which will also need to be registered. When these are complete, you can register your new business with the state insurance commissioner.
Find A Cluster
In order to sell insurance, you need your schooling and licensing, but you also need carriers to provide the products you are selling. When you are a new agency, this is easier said than done. Most insurance companies have strict requirements that a brand-new startup is unlikely to meet, such as sales quotas. For this reason, most insurance agents join a cluster. This is a group of independent insurance agents who maintain their own businesses but are in association with one another in order to have carriers. A cluster will have its own minimum requirements for membership and will likely have associated fees as well. Once you have joined a cluster, you are ready to set up shop and open your doors.Share