Overhead for a New Agency?

[dcorrp]

Hi everyone, I am currently a stay at home dad. I am lucky that my family doesnt need me to work at all and we get by comfortably. I used to work for a captive company and I am starting to get the urge to start working again.
I have been looking into starting a small indie business from home and it seems like I can do it for a lot cheaper than I originally thought. I have 5 years insurance experience so I was quoted $175 a month for E&O (P&C). I could write my business through Superior Access (mostly because they allow home offices) for $110 a month. Add about another $50 for a second phone line, bond, and other small expenses and I could run my business for under $350 a month. I have a huge list of family and friends at the captive agency that are willing to switch so I wouldnt need to pay for any marketing for a few months until I get some commissions rolling in.
Am I missing something? Even if I only net $100 a month thats more money than I'm making now, not to mention the tax benefits my family will get from having a home office and small business. My #1 job would still be watching my daughter, this would be a part time job but she sleeps for 2-3 hrs a day and will be going to a day care for 2 days a week. Also, I wont have the stress of needing to make a certain amount to cover the mortgage, cars, ext...
I'm just kinda throwing this around in my head and I think I have already made up my mind but I would like to know what you guys think who have already gone through the process.

 

[xrac]

Sounds like you can do it to me.

 

[Insurance-Guy]

I am not trying to discourage you but one thing I have found is on the P and C side of this business when people want to talk to you or have a change made to their policy they want to do it right then on their time table. I have a hard time believing anyone could seriously run a serious insurance agency "part time" with out an office or staff I guess you could pick up a few policies but my question is are you going to be able to offer the service your friends and family want and deserve? I have had a couple part timers come and work for my agency and it never seems to work. Best of luck to you.

 

[dcorrp]

Thanks for the input insuranceman1. That's an issue I have been putting a lot of thought into. I'm going to need to dertermine how many policies I can have based on the amount of time i'll be spending on this. I know P&C tends to be heavy on the service side of things. Sometimes issues come up that I will need to deal with right away but for the most part people are ok as long as you get back to them the same day. The good thing about being a business owner is I can choose my own clients as much as they can choose me. If I have a really needy client I can choose or not choose to insure him. I'm hoping that between my office line and cell phone I can take all calls coming in. I don't think this business plan would work for an agency larger than 500 policies but even at that size if I keep my over head low I would be profitable.
Once my daughter goes into preschool (2 years from now) I can open an office and do this full time. Starting now is to basically keep my mind sharp and in the insurance game. I can also get a 2 year start on renewal commissions.
I would be interested to hear from any agents who started recently or work from home.

Thanks,

Dan

 

[FL P&C Broker]

I think it could be doable but not easy. I rented a small office and have kept overhead relatively low for the first year and brought on 2 other agents so far. The only major expense is marketing.

Go with VOIP for phone if you have fastest enough internet that way when you move into an office it will be easy as just moving the phone. It is also much cheaper.

 

[LGilmore]

You really only need one business phone line these days as they can handle a great deal. Use that expense in purchasing a website to help with service and possible quotes.

While not in your situation (I'm an empty nester) I moved my office home a couple years ago. It actually works pretty good. I had an office for 19 years in another nearby city. I only saw maybe one or two clients in office each year. I went to them more often than not. These days I'm about 50/50 telephone/email with clients and prospects. Most have learned that I write much more directly than I talk..

If you have a notebook and your house is wireless, you can move about while working.

good luck.

 

[dcorrp]

Thanks Fl P&C Broker and Gilmore. I just recently bought a nice and really small notebook for that very reason. I had to google VOIP because I didn't know what that was but that seems like the way to go. So if I'm not mistaking, you can get phone messages e-mailed to you so you can check them on a blackberry or Iphone?

Thanks,

Dan

 

[CKS Insurance]

dcorrp

Can you give me more info on Superior Access? I am also trying to start my own independent agency and finding an insurance company that will appoint a scratch agent is not easy.

Does anyone else have any suggestions? I am on the P&C side and want to find carriers that are competitive in PA for commercial and personal.

 

[dcorrp]

dcorrp

Can you give me more info on Superior Access? I am also trying to start my own independent agency and finding an insurance company that will appoint a scratch agent is not easy.

Does anyone else have any suggestions? I am on the P&C side and want to find carriers that are competitive in PA for commercial and personal.

The biggest reason I am going with them is because you can have a home office. Most of the others require an office. I have heard good an bad about all these wholesellers.... Some people hate superior access while others love them. They offer good commissions if you pay the $110 a month fee and they say you can take your book of business once you get appointed with a company. That is huge. The biggest con is that you do not have binding authority. If you are going to do a lot of commercial i heard Insurance Noodle is the way to go. Look them up.
My plan is to use Superior access for a couple years and get appointed directly through the competitve companies in my area once I get a book of business. I'm hoping to get started at the begining of next year so I can let you know more than.

One more thing.. If you want to learn more about them and their contract, go to their website and call their customer service line. They are very helpful. I spoke with reps from Smart Choice, Insurance Noodle, Superior Access, and few others. Just decide what is important for you, ie binding authority, owning your book, commission %, and find out who has the best contract for you. It seems to be the only way to go for a new agent starting from scratch. Just remember that most people use these wholesellers as a starting point to build a book so make sure you have an exit strategy and the contract you use allows you to do what you want. Good luck.


Thanks,

Dan

 

[redsquash]

Stay away from Superior Access. I have been using for about a year, and they are way too horrible. I lost a few big clients just because of SAIS, because they couldn't bind the policy in time.

I'm leaving them too.

dcorrp

Can you give me more info on Superior Access?