Chris Blackham takes a look at the main issues confronting those starting a new insurance brokerage
When, in 1984, I started my first brokerage there wasn't quite as much regulatory red tape as there is today. You could say that, unlike Winston Smith in George Orwell’s novel “1984”, I didn’t have to deal with Big Brother - very different from today’s regulatory regime. That said some of the challenges are the same and no matter how hard working and enthusiastic you are, the issues summarised below remain true.
It takes longer than you think - 3 months is never enough
“I’ll be up and running in three months.” A refrain I have heard often and one that is never true. The proverbial happens and knocks you off course no matter how meticulous your business plan. You can’t do everything yourself and you will be dealing with other parties such as regulators, financial backers, IT providers and more. Any one of these has the potential to throw a spanner in the works often unintentionally.
By all means aim for three months but be prepared for a longer haul before you are fully operational.
Start-up capital is always tight - you never have enough to do everything you plan
You will need capital to start your enterprise. In your first few months it is very unlikely that you will generate much income. Certainly, not enough to cover the expenses you’ll incur. So be forensic and prioritise the essentials needed to become operational and maintain your focus.
Choose your backers with care
There are many ways to raise finance. You may look to a bank or business angels or, if the ambition is big enough, a venture capitalist or even one or other entrepreneurial investors in a partnership.
Each has its merits but remember that they too have their own business agendas with the result that there is potential for conflict which may compromise your ambition.
It is best, therefore, that you choose with care which means having mutual goals and realistic timelines for achieving those goals. It also helps if they understand your business rather than focusing purely on the financials.
It’s all about the team around you
Any brokerage requires many skills. You can’t do it alone. It requires a team. A winning team is all about melding different skills and personalities so that it functions seamlessly with everyone trusting and relying on their colleagues in pursuit of common goals. Be mindful not only of what skills you need but also who will deliver those skills in a way that enhances the team. And don’t be afraid to look outside the business by seeking the guidance of a mentor.
Customer customer customer
“Putting the customer first” has almost become a cliche in our industry, but without a genuine regard for customers and their insurance needs what value can you offer?
Dealing with the myriad of competing demands on your time as you create your business is not easy. In such circumstances, it may prove difficult to maintain customer focus but, arguably, this is the most important time as it fundamentally influences the character and culture of your business going forward.
If you are serious about starting a brokerage you won’t be put off by these challenges. To succeed you have to embrace them and it is important to make, what can be a defining decision, with as much useful information as you can garner and with as much positive support as possible.
The whole purpose of Vizion is to encourage entrepreneurial spirit and to help ease the transition from being employed to running your own business. So, if you are considering setting out on your own and are looking for guidance please feel free to contact Vizion – Click Here and provide some details and youTalk-insurance will put you in touch.