A thoughtful business plan provides a roadmap for building a successful insurance agency. Here’s what to include in yours, from objectives and product offerings to your target market and financial projections.
A great business plan can guide you through every critical early step of building your company. As you start your insurance company, your plan can help you refine your vision, set objectives, and define the details of your business.
Done right, it can help you secure investors, financing, and more. Done poorly or not at all, your new agency may not get off the ground.
Let’s look at the benefits of creating a business plan and what yours should include.
Before diving into the details of building a plan, let’s start with why you should write one in the first place.
After all, a good business plan requires careful research, writing, and review. But it’s worth the effort.
Companies that plan grow 30% faster than those who don’t.
A solid plan can help you make sound decisions when you’re first starting out and as you grow. Even down the road, it can help you secure funding from banks and investors. And insurance carriers often want to see your plan before they’ll partner with your agency.
Beyond these benefits and your own peace of mind, creating a business plan can help you:
Once your business gets off the ground, periodically reviewing your plan is a great way to clarify your goals and refine how you’ll reach them.
A Journal of Business Venturing study has shown that companies that plan grow 30% faster than those who don’t.
Business plans can be as different as the businesses they describe, but they generally provide highlights of your business in 5,000 words or less.
Your insurance agency plan must define your business strategy if you plan to seek financing. Essentially, your plan needs to be useful to you and intriguing to investors.
Standard business plan templates typically include these sections.
The executive summary is a snapshot of your insurance business.
For an established agency, this section might include its mission statement and detail its past successes. For a startup, the executive summary might highlight the experience of the business owners and their motivation for starting an insurance agency.
For both new and established businesses, you can also include your agency’s general financial information. This might be an overview of your book of business or a list of current investors.
The executive summary is usually the first impression investors have of your business. Make sure it packs a punch and provides a compelling story.
A company description gets more specific about what your business does on a day-to-day basis.
The company description explains your keys to success. These can be the value you provide to customers and what sets you apart from the competition. Sometimes they’re one and the same. Pinpoint what you bring to the local insurance market, like:
You may want to include a SWOT analysis that details your business’s strengths, weaknesses, opportunities, and threats.
This section lists every insurance product that your business offers or plans to offer in the future.
Be sure to include product benefits, sales forecasts, and how you plan to acquire and manage the products.
You may also want to explain how independent agents can secure direct appointments with insurance carriers. Many investors may be unfamiliar with this process.
Find business insurance quotes for insurance professionals Get Quotes
The market analysis shows your understanding of the insurance market in general. And more importantly, where your agency fits in the mix.
If you plan to fill a niche, explain why and how. Either way, describe your target market and the competition.
Potential investors may also want to see specific market goals, such as your target market share along with an explanation of how and when you’ll achieve it.
Every insurance agency needs to reach new customers to grow its business and be successful. In this section, outline how you’ll market your business to attract new customers and increase sales to current ones.
Briefly summarize your strategy, including some details like whether you plan to use traditional and/or digital marketing channels. This might also be a good place to share your sales strategy for converting leads into customers.
The organization and management section introduces your executive and management teams, including a summary of their unique qualifications.
Detailing your team’s experience and talent helps establish your agency’s credibility. It also builds trust in your business and leadership team.
You may also want to include an organizational chart that breaks down your business infrastructure and operations.
If your business is looking for funding, you’ll usually need to identify start-up costs and provide five years of prospective financial data. This typically includes:
You may want to include a break-even analysis that delves into the specific profitability of your products. Consider adding a short financial analysis of the most profitable industry trends.
If you're seeking investors for your insurance company, add a funding request at the end of your business plan. Typically, a funding request mentions:
If you’re ready to draft your business plan, the Small Business Administration (SBA) provides this business plan template to help you get started.
Once you’ve completed your business plan, give it a chance to shine in the spotlight.
Presentation matters, so make it professional. Use an easy-to-read font and clear charts and diagrams to illustrate your points. Be prepared to provide both a digital and print version to potential business partners, banks, or investors.
How you present matters, too. Whenever possible, meet in person to build more trust and rapport.
And even though your business plan is full of details, your audience will likely ask you to expand or explain. Come prepared to respond to any potential objections.
Your thorough, compelling business plan can help build the foundation for your success. If you devote the time and energy needed to create a great one, it could pay large dividends for your business.
Complete Insureon’s easy online application today to compare quotes for business insurance from top-rated U.S. carriers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.
You may also like
Building an insurance company is no small task, but with some sweat equity and the right focus you can turn your dream into a reality. Here are the basic steps to get started.
Hannah is a contributing writer with a diverse writing and content building background. She's worked on topics from technology to insurance. She's competent with both language and SEO, and continues to work with a variety of business verticals to create engaging, optimized content.
