Level Up: How to Start Building an Insurance Agency

Level Up: How to Start Building an Insurance Agency
July 28, 2020

If you're a rockstar producer interested in starting an agency, you have a choice: do I want to continue serving clients, or do I want to get into management?

There's so much that goes into starting and growing an insurance agency, and we won't cover it all here today, but I do want to tackle two key components:

  1. Are you absolutely sure you want to do this, and
  2. How to recruit that first agent, which gets the ball rolling.

We have some additional resources for agency owners, and we plan to keep adding resources. If you have anything you'd really like us to cover, leave a comment at the end!

Additional Resources:


To Manage or Not to Manage?

The only way to get to the next level is to start managing people, and that's a decision you have to make. Not everyone is cut out for it, nor do they want to do it.

This is really the most critical part of it all.

Back in the 80s, Jeff and I took that leap of faith and decided to recruit some friends who were struggling in their jobs or who had just gotten laid off.

Before we knew it, we had started an insurance agency and had to figure out what comes next: how do we train our people, how do we handle the legal side of it, should we borrow money... all of that suddenly came into play.

It's a lot of responsibility to start an agency, and I'd really caution you to think on it a bit.

A lot of people are great salespeople and they make a good living, but when you start adding other people to the mix, there's a lot of dynamics that take place.

I'd caution really good sales people to be honest with yourself. Do you have the patience, the system, and the approach down to bring somebody in?

Just because you're a great salesperson doesn't mean you're a great manager. 

More Responsibilities = More Stress

If you're a good producer, you really enjoy what you're doing, you're successful, and you're making a really good living to support your family, that's a pretty dang good gig right there.

Your overhead is low and you're really just worried about yourself. It might not seem like it, but really, your worries are few and far between.

great sales agent doesnt necessarily make a great manager in senior market sales

When you have people relying on you to make a living and keep a roof over their head... that gives you another level of sleeplessness. I remember giving people all of my sales just to get them to make a living.

When you start an agency, you really have two dynamics to wrestle with:

  1. Can they pay their bills? We never paid a salary, so you had to get out there and paddle. We'd paddle alongside you, but if you didn't sell, you didn't make money. 
  2. Are they actually working? Some guys would just say hey, I'm not getting paid, so if I don't want to work, I don't have to. You can show those guys how to do it, but if they don't put the effort in, they won't get there.

It's not all doom and gloom at all, but what I'm trying to caution you on is the responsibility you take on when you recruit agents. It's a lot of weight on your shoulders, and you want to know the temperature of the water before you dive right in.

Get Ready Before You Recruit

Before you start scouting out the talent so to speak, determine what your business model will look like.

Are you going for a career shop where these agents will be captive with you? Or will you be an independent shop, like an FMO? That's what we do – we're there for back office support, but we give out almost all the commission, and agents are independent – not tied to us.

For most guys and gals, it makes sense to be a career shop.

Even if you're a really good salesperson, think twice about the independent side. We can speak from experience here that it takes a LONG time to get that thing off the ground.

When you do a career business, you're really looking to multiply yourself.

Duplicate Yourself

If you're a power producer and are already highly successful with a big book of business, you're really looking to duplicate yourself.

You can bring somebody on and teach that person what you know from A to Z.

  • You're mentoring them on how to get in front of customers, which is the main concern
  • You're coaching them up on the products you sell
  • You're teaching them your sales techniques

So that's the main focus as you think about recruiting people.

The business side – as far as submitting business and all of that – that's important, but it's not as important as the mentorship and coaching you'll be doing.

mentoring new agents in the senior insurance industry

Mentor and Coach Agents with the All-Star Program

For those agency owners that don't want to personally coach and mentor each agent themselves, I highly encourage you to take a look at the All-Star Program

Michael Sams, Director of Sales Training and Development at New Horizons, $1 Million+ Producer, $5 Million+ Total Annuity Production, Developer of the All-Star Program, 7-Time 'Agent of the Year' Award-Winner, 2-Time 'Top Dog' Award Winner for Highest Total Production at New Horizons.... (that's a mouthful!)... runs the All-Star Program and coaches your agents for you.

He handles your agents so you can focus on other things.

Plus, if you already have some agents but want to get more production out of them, he can teach them how to cross-sell and maximize the opportunity. With the All-Star Program, your agents can learn how to easily double, if not triple, their sales within 8 weeks.

GinaGina Downs, Vice President at Senior Connection, says that before starting the All-Star Program with the three agents on her team, she was concerned about follow-through. "All the time and money we spent is for nothing if there's no follow-through," she says.

 

The good news? Downs says she knew after the first week there was nothing to worry about. "Everyone was so excited about the information and learning new ways to do things. We found it'd be easier than we thought to incorporate new steps in our sales presentations."

 

Downs says she'd recommend the program to other agency owners, hands-down: "We are very successful and have been around for a very long time time, but that doesn't mean we can't improve. We decided to do the program, and it's been fantastic."

Learn to Sell Insurance from a Multi-Million Dollar Producer

How to Find Potential Agents

The secret ingredient here is an agent that sticks and is productive. And you're not going to get that every time. If you are, let us know what you're doing, because we feel we're still figuring this one out, to be honest.

But here's what we did. If we met someone – maybe a family member, a relative, or a friend – and we felt they had the personality for this, we'd say, "Why don't you ride with us and shadow us for a few days where you can get a feel for what this would be like?"

If they get through that and say they can picture themselves doing it, we'd go to the next steps.

You may already have a friend or someone you've met that's been inquisitive. You're looking for people who ask questions like, "What do you do?" and "How does it work?"

People like that who voice an interest in the business could be good people to recruit.

That's my take on it, but let's get Jeff in here – he has some more ideas on how to find great people to recruit as agents.

Look for Personality Traits

jeff sams white bgI'm in total agreement with everything John has said so far, but I'd just add on to that by advising you to look for personality traits. 

Waiters and waitresses, shoe salesmen, Verizon dealers... whoever you run into that has good agent characteristics is someone to talk to.

You're looking for an outgoing personality, a self-starter, a person that communicates real well. Retired teachers are great communicators and make fantastic agents. And the self-starter aspect is huge, because if that ingredient isn't there, no matter how good they are at everything else, they'll fail in the beginning.

Those first few years are tough, which is why ex-athletes are so good in this business. They know how to deal with the rejection and criticism.

When you meet the right person for this, they instill in you that they have good integrity, good communication skills... they make you feel like they're taking great care of you. 

See if they want to transition into the insurance business. Some will say yes, some will say no. But you won't know unless you ask and put yourself out there.

start an insurance agency

Start With One Agent

The best advice I can give is to start with one. One agent at a time.

That person gets acclimated and up and running rather than starting with 10 people all at once. And people do that! But I'd caution you against that.

When you start with one, you can take that person out to shadow you and listen. They see what you do and get on-the-job training.

You're the trainer and the owner until your business gets off the ground enough that maybe one of your agents can turn into the trainer. The alternative here is the All-Star Program where Michael trains your agents for you.

A long time ago, I heard this saying, "Are you working in your business or on your business?"

That stuck with me for a long time. There's a lot of wisdom in that. When you first start, you have to do both. Then, when it's up and running and having some success, you can begin to spend more time working on your business.

Conclusion

When thinking about starting an insurance agency, you really want to almost meditate on this question: Should I hone my craft and be the best I can be or should I start an organization?

It's a big decision that'll change the trajectory of your life, so spend some time thinking and planning before you jump in.

Once you know this is the path you want to go down, decide if you want to be a career shop or an FMO. For most, it makes sense to do a career shop.

If that's the fit for you, start with one agent at a time, keeping an eye out for inquisitive folks and people with great agent characteristics. So, are you ready to level up?


How did you start building your agency? Leave a comment below!

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