Getting started on your independent insurance company is a good idea if you want to utilize your optimum earning potential. Like any business that you start, your insurance company too will most definitely involve an element of risk in the beginning. But if you have good business skills, you can take your insurance company to greater heights.

Starting your own insurance company requires you to plan it properly. Plan your business in steps and execute them accordingly.

Step 1: Make a business plan

As cliché as it may sound but making a business plan has to be the first step when you are looking forward to starting a business. You need to ask yourself a lot of questions about what you are thinking for the future of your insurance company. Figure out what is going to be your mode of action. You may ask yourself the following questions:

  • What will be the location of your business?
  • Will you be buying and office, or leasing it or get it constructed?
  • How would you identify your customers and competitors?
  • What would be your selling strategy?
  • How would you look for qualified employees?

The more information you get about your competitors, the better for your business. Get as much information about the area you have in mind for your business, the growth plan of your community. Purchasing an existing insurance agency to save start-up costs and time is a good idea. Get ideas from experience people (if you now any in the industry). Learning is an ongoing process. Do not expect to know everything at once, but definitely keep your eyes and ears open.

You may take help from qualified lawyers, public relations professionals, business experts, accountants in setting up your business. You may discuss with them your business objectives and take their valuable suggestions for a sound business.

When you have sufficient information, re-examine the business plan that you have. Make necessary changes that you think will do well for your business and get you good business opportunities.

Step2: Product Line Determination

Identify the type of insurance that you would like to sell. Study the insurance trend in the market and then decide on the type of insurance you want to deal with. You should also take into account the expertise that you have. If it is life insurance that you have your expertise, you could start off with establishing your business around that. Once you have started off, you can think of expanding your business in other areas of insurance. If you are looking for expansion, keep in mind the time and money you will need to invest and make your plans accordingly.

Step 3: Finances

Any business will require a secure financial investment. Approaching a bank, the Small Business Administration (SBA) or a private individual for the financial aid needed for your business may be a good idea if you do not have the capital. Banks may not provide new business loans because of the risk involved in the business. If you can arrange for someone who is willing to invest in your business, then pursue this avenue. Your application for loan must contain thorough details including the capital that you have planned for starting the business, your salary and any other expenses that you have planned.

If you can place a detailed expense map in front of the lending institutions, then it becomes easier for them to examine your business objectives and assess the chances of risks in the business.

Step 4: Marketing Strategy
Developing a marketing strategy requires few planned out steps. They are:

  • Identification of target market
  • The Unique Selling Proposition of your product
  • Communicating this USP to the target/potential customers

Put these steps in writing and base your actions on this plan. If you have to make major changes to your plan make sure you refer back to the plan.

Step 5: Assess/determine package (pricing, distribution and staffing)

What will mainly determine pricing are material, labor and the overhead costs. You must conduct a complete cost analysis of the product that you are going to sell and then set prices for the same. This pricing must be based on the quickest and least expensive way to communicate with your customers and also offer them the type of policy that they can benefit from.

If you hire employees, make sure that you define their responsibilities and roles properly. Funds for training and educating workers must be allotted separately.

A little perseverance, a lot of hard work and the right amount of time invested will definitely give your insurance company  the high that you have been dreaming for it. Planning is an important aspect that will mark every step of your business. Plan your business properly to be able to calculate risks and make changes if any.

A good businessman will know who his customers are and how he can keep his customers attracted to him while at the same time drawing more people to his products.

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