Apr 25, 2022
Today’s episode is one of
several episodes about how to get started in the insurance
business. I’m not talking about becoming an agent, I’m talking to
those of you that are thinking about starting an agency, an
insurance company, or an an insuretech business. There’s a lot more
to hanging a shingle that says you are open. As part of the
planning process for starting a business there are some concepts to
consider, these are about yourself.
As exciting as it is to start a
business, there’s a lot to consider. It’s not all glamor and
glory!
Most business owners would agree
it’s a lot of hard work, a lot more than they expected. It’s long
days, weekends and holidays. Many business owners lose their
marriages over their business. As I mentioned in the last business,
90% of business fail in the first year.
The circumstances around why
they fail vary, but often it’s with the concepts I’m discussing
today.
In the last episode we talked
about why business fail:
- Lack of a marketing plan
- Missed market shifts
- Ignoring the customer
- Lack of financial understanding
- Poor management
- Location
- Motivation
- Life’s distractions
- Lack of planning
INTRO FOR PART 2 - RECAP THE
ABOVE AND THINKING BIGGER AND W HY YOU WANT TO START A
BUSINESS
The first thing I want to talk
about is
Thinking Bigger
- As you are thinking about starting a business,
don’t think about something small to just pay your bills or
starting something as a hobby while you raise your family. Think in
terms of building something that you can be proud of, that you can
expand, most importantly, that you can sell!
- Think in terms of how you will build a team,
how you’ll grow so that it isn’t just you doing all the work all
the time. There are a lot of companies that encourage you to grow
your business by recruiting - that’s not what I’m talking about.
Build a business where you own the business and the people on your
team are your employees. While the network marketing concept works,
I personally don’t think that is a good business model at all. You
don’t have much control and it’s not a model that you can scale and
sell! One day I’ll really talk about how I feel about network
marketing and recruiting, but for this purpose, I want you to think
about a team that supports you, that helps you to be more
successful, that you can delegate to and have them expand your
brand.
- Women who start businesses often have a smaller
vision. Don’t get mad at me for saying that but after teaching this
presentation for over 5 years, it’s something that I’ve witnessed
firsthand. Women who start businesses often think about a business
that is close to home and around their family and not something
that is scalable. I can’t tell you how many women want to
start a baking or food business or a party business for kids. I’m
not saying that’s a bad idea but after many of them have done their
market research they realized that it wasn’t a business that they
could really make a profit or build to sell.
- Insurance is a little different. Since COVID, a
lot of people have realized that they can run this type of a
business virtually, but I’m not sure if that is sustainable long
term. Good market research will help to prove that. There are so
many different type of insurance businesses that you can start:
i.e. an agency, a brokerage, an FMO, an insurance company, a
captive, a direct writer. You can focus on life, health, personal
lines, commercial, yachts, tech or international. Under the
umbrella of insurance, you have a lot of choices!
- This is why you need a plan. I talk about
having a plan all the time but remember fail to plan, plan to
fail.
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Understand yourself better:
- Why do you want to start a
business?
-
- This is the most important conversation you
need to have. I mentioned it a little in the last episode, don’t go
into business because you think you can do it better than someone
else….unless you really can.
- Here’s some reasons why people go into
business:
-
- Create a
career for yourself -
while there is plenty of employment opportunities today in 2022,
that wasn’t always the case. Back in the 80’s a lot of people went
to college and couldn’t get jobs. When we went into lockdown with
COVID and a lot of people lost their jobs, and the entrepreneurial
type started delivering groceries and filling grocery orders.
People will find work when they need to. Starting an insurance
business can be a great career - the question is, are you better as
a business owner or as an employee or subcontractor to
someone?
- Some people go
into business because There’s a demand for what you are
selling. Insurance is a
product that people need, but not all people know they need
insurance. Not all people want to spend the money for something
they may never use. If you are connected to a few auto dealerships,
it’s easy to get auto insurance from new car buyers.There’s a
demand because people can’t drive their car off the lot without car
insurance. If you are connected to some mortgage lenders, it is
easy to sell homeowners insurance because people can’t go to
closing without homeowners. I was speaking to someone recently who
couldn’t understand why she had to pay money for automobile
insurance all of her life and she’s never had an auto claim. Money
spent for nothing is the way she looked at it. So while people need
insurance, it’s not always an easy sell like a new iphone or a new
tesla!
- Another reason people go into business is
because you want to make a difference - wanting to make a
difference can be a good reason to go into business, especially
insurance, because you can really make a difference in this
industry. But are you setting up your business to make a profit
while making a difference? Just something to think
about.
- An obvious
reason why people want to go into business it to make
money - when you work for
someone else, they often determine your salary. If you are on a
commission basis, then you will determine your salary but not all
commission positions pay fairly. And not every position can be
sales…..it’s a good reason to want to go into business, but it is
also important to understand what it costs to get started and the
ongoing business expenses of running a business. Money for
marketing, taxes, general overhead can be more than you think. The
expenses are ok so long as you are generating revenue, but there's
a lot that goes into sales and business development!
-
Travel -
Many people go into business
ownership to be able to work from anywhere. Since COVID, I’ve
somewhat set my business up that way. In the insurance
business that is possible, especially with virtual meetings today
but you need to make sure you are in compliance with state laws as
you do this. You must also have a strong marketing plan in place
where people can find you and send you business regardless of where
you work.
ABOUT THE
HOST
This episode of the Business of
Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an
entrepreneur, business advisor, insurance professional and
content creator. Her goal is to inspire you to think differently
and explore ideas that disrupt the status quo.
Debbie has an extensive business
and marketing background with a focus of helping insurance
professionals be more successful.
She is the co-author of
Renewable
Referrals and produces
two other podcasts, Divorce
Exposed and
Seniors We
Love.
Connect with Debbie
on LinkedIn, Twitter
or Instagram.