Independent agents and brokers comprise an essential part of the insurance distribution pipeline, yet, these business owners and their small firms are often mavericks, taking on risks to sell products geared toward safety.
You passed your insurance licensing exam, you paid your state fees, maybe you even had a lawyer set up your founding documents or sat through an hour-long seminar about leadership and business practice. But still, you probably don’t have anyone showing you how to build your own insurance business.
If you’re a sole producer already in this position, you’re probably familiar with the risks it brings:
- Your income is dependent on you – every minute you aren’t selling is one your business isn’t making money.
- Any help you bring on will depend on you for their livelihood.
- Selling is what makes money, but missing crucial steps on paperwork or other basics of regulatory compliance can doom your business.
It may be difficult to embrace, but one of the mission-critical pieces of your success is in how well your business can operate as a business. Put another way, it may seem like you can’t take time to train staff or answer phones, or check paperwork because that takes you away from selling. But the reality is until you put systems in place that let your staff operate efficiently without you, you won’t be doing anything but treading water. So, here are our top tips for turning your business from a survival enterprise into a real grown-up insurance firm.
1. Vision: Decide what role you want to occupy in your business
This seems like a no-brainer, but the reality is some people are micromanagers. Are you capable of training staff and handing off duties and trusting them to get things done without you? If you can’t do that, then you may be better off admitting that you want to be a solo producer who is always running in place.
A few questions to help you envision your ideal practice:
- Do you want to be the sole producer, the rock star of your business?
- Is it your ideal to run a practice with a tight group of partners, sharing risk and responsibility flatly across the board?
- Would you rather have a pyramid of salespeople in your firm, with you leading the charge?
Deciding on an ideal size and shape of your business and what role you want to play is the foundation of your business plan. If you like people managing, you may need to have more salespeople to help produce the income you’ll need to have time to manage. If you don’t like the management part of the business, and you’d rather be in front of people, selling, plan to hire an office manager who can handle the admin work.
2. People: Evaluate where your people are and where you want them to be
Who is on your team? What are their strengths? Weaknesses? When starting out, many insurance producers hire friends or family with little experience or direction to fill positions such as operations or marketing. Some of this comes from the understanding that friends and family might do a job for less.
Time for some tough love: If you hired someone who, after weeks or months, still needs constant hand-holding to get the job done, it’s time to rethink your staffing decisions.
If you already have a stellar staff in place, take time periodically to review if each person is filling a place that makes sense for them and allows them to play to their strengths. Don’t be afraid to switch things up.
One of the first roles you might consider is having an office manager who is effectively the boss of everyone – including you. Having a manager who takes care of all the non-insurance details of the business can give you the flexibility to focus on the things you’re licensed to do: sell insurance.
3. Process: Process is everything
Any success that’s not repeatable is luck. Making successes repeatable lies primarily in having a good process in place. That’s the case in your office, as well. Sometimes the early stages of a business may feel like throwing spaghetti at the wall and seeing what sticks, but to make real progress will require you (or your office manager, or your marketing team leader, etc.) to develop processes for just about everything.
Do you do marketing events? What is the recipe for success? Write it down, elaborate on each person’s duties, and help your team understand where they fit in. Binding coverage? Document who owns each step of communication or customer success – even script it out if possible. Documenting processes make it extremely easy to communicate expectations and duties for each team member, and make onboarding new team members a cinch. Plus, if you’re looking to transition out of being the sole member of your team, documenting processes is also about passing along duties to other team members.
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4. Empower your team: Tools and tech
The best leaders train people well, empower them to do their jobs, and then get out of their way. Part of that empowerment is in being sure your team members have the tools to do their job well. Increasingly, the answer to this empowerment is in technology. Paper processes are demoralizing to many staff members, and they’re a great way to put yourself at risk.
Yes, we’re biased; tools like AgentSync make it easier to train staff in a very technical and nuanced industry and protect yourself from compliance risk when it comes to your business’s operations and administration. If you have a good foundation of processes, preserving them through digitization is a no-brainer. Not only will it help retain collective industry knowledge and reduce this risk, but automating some processes can free up valuable hands-on time for your small staff. Consider: If you know your clients are more likely to keep their appointments with you if they receive an email the day before and a text the morning of, why not subscribe to a digital appointment book that can automate that service?
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5. Ultimate destiny: Succession planning
You may be surprised to see succession planning on the shortlist of things to do to run a great business (and not just be a great salesperson). Don’t be. Your company is only as valuable as its destiny. If your vision for your company begins and ends with being your paycheck-generator, be clear about that with yourself. If, however, you ultimately want to sell your company and the marketing funnels you build along the way for a profit, that starts today. Your business’s peak value is when you’re at peak production – selling your business in a slump won’t yield much of a financial cushion.
If you hope to pass your business on as a legacy to future generations, or even just to a younger partner, or you plan to slowly retire while maintaining ownership, you need to set mechanisms in place that make that possible as a future reality. Startup mode is great for startups. But a legacy business that begins the fiscal year like an Etch-a-Sketch that just got shaken isn’t, in fact, a legacy business. So plan accordingly.
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