Starting Your Independent Agency – Part 2
This is the second of two blog posts about starting an independent insurance agency. Click here to read Part 1.
You’ve done the conception and big-picture planning for your independent insurance agency and found the financing you’ll need to get started with operations. Now it’s time to think about the nitty gritty.
Pick a Name
If you don’t already have one, you’ll need a name for your agency. It could be related to location or geography (High Plains Insurance), descriptive (Trustworthy Insurance Solutions), include your personal name (Smith Insurance Agency), etc. Think about how the moniker might be shortened in conversation or for a domain name. Do you really think your customers want to type “thebestdanginsuranceagencyever.com?”
You’ll want a name that is unique in the area you want to serve and that has an available domain or domains—sometimes it makes sense to buy more than just the .com version. Search the web thoroughly to see if any other business is already using “your” name and make sure any desired domains are available by checking with a company like Namecheap or GoDaddy. Then see if anyone else has the name registered with your state’s Office of the Secretary of State. (Note: this is also where you’ll register your name once you feel confident that you’ve settled on a good one.)
Pick a Structure
You’ll also need to decide on the preferred structure for your business. You may decide to operate as a sole proprietorship, partnership, limited liability company, limited liability partnership, corporation or S corporation. Take the time to learn about and understand the differences between each type of entity, including how and when you’d be taxed for each.
Once you’ve decided, you’ll need to file paperwork with federal, state and, sometimes, local government. It is possible to do all of that yourself—but only if you’re well informed and thorough. Be sure to ask for professional help if you have any questions. It could be wiser and easier to pay an expert to set your business up properly than to undo a mistake made out of ignorance.
Pick Your Vendors
What banking services will you need? For each service that you’ll use, make a list of what is important and look for the vendor that will best meet your requirements. For instance, if you plan to deposit checks through a banking app because you’re not located near a branch, make sure you won’t be charged extra for the privilege. Other vendors that you may want to engage:
- IT/networking assistance
- Marketing/communications consulting
- Courier or mailing services
- Copier or business-machine supplier
- Cleaning and/or beverage-supply service (if you have an office)
Chicken or the Egg
You’ve probably got a lot of lists by now. It’s also a good idea to build a realistic timeline. Start by breaking larger tasks into smaller ones and identifying how long each one will take to complete, both in the start-up phase, which could take more time, and on an ongoing basis. (I.e., the initial setup of accounting software may take several hours over a couple days; entering ongoing transactions could take a few minutes each day.) Sometimes working backwards can be instructive. Think like this: You know you want X, Y and Z to happen, but before you get there, you’ll first have to do A, B and C.
The next step is to block any dates or times on your calendar that are not available for working on your new business. Include the hours you need to spend doing other work, holidays, Aunt Marge’s birthday party, the World Series, your weekly game night, etc. Set realistic boundaries on your time.
You Can Do It
Now you can start assigning your list of startup tasks to the open slots on your calendar. You might find that your new agency may not be ready to open as soon as you had initially hoped. That’s okay. Coming to terms with the realities of running a business may be the most important step of all. While enthusiasm is wonderful, combining it with a dose of realism will increase the odds that you’ll achieve long-term success.
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