Insurance Agency business plan for starting your own business
If you worry about how to start Insurance services, you must create a detailed Insurance agent business plan. It will not only guide you in the initial phases of your startup but will also help you later. Business plans for Insurance Agency are good instruments to assess the success of the business and track its progress. Insurance agencies require financial expertise and a highly accurate finance business plan.
Since the insurance industry is classified as a due diligence service, you may be confused about how to start independent Insurance Agency. You can refer to this template set out for a firm called Lifelong Insurance for detailed guidance.
Lifelong Insurance will be located in Texas. The business will provide life, health, travel, and vehicle insurance to its customers. If you want to start this business but are confused about where to start, this Insurance Agency business plan template can act as your reference point.
2.1 The Business
As per this Insurance Agency business plan sample, Lifelong Insurance will be the newest and brightest independent Insurance Agency in Texas. It will be owned by Goerge and Martha Bell. They both have experience serving in the sector for 15 years. Lifelong Insurance was established in line with the following business continuity plan.
2.2 Management of Insurance Agency
The owners, Goerge, and Martha Bell are both Certified Financial Planners. They will hire certified and experienced employees to run the business. It is because matters related to insurance are of huge legal and financial importance and a lack of experience and knowledge can incur huge costs. In this business plan for Insurance company, we will provide a list of employees who will be hired to manage the operations of the agency.
2.3 Customers of Insurance Agency
Irrespective of whether you are following an Insurance Agency business plan or thinking of starting a credit repair business, you need to know who your target audience is. Lifelong Insurance has the following customer groups as its target market:
- Aspiring Young Families
- Young Adults
- Local Businesses
2.4 Business Target
As per this sample business plan for Insurance Agency, the business target for Lifelong Insurance is to raise the bar in the insurance industry by providing excellence and utilizing the highest principles and standards in every aspect of the business. Lifelong Insurance wants to empower its clients, employees, and community while employing these practices.
You may download this Insurance Agency business plan sample pdf from our official website.
3.1 Company Owner
George Bell and Martha Bell came up with this new insurance agent business plan after working on it for months. It was despite their combined 15 years of experience in the industry.
3.2 Why the Insurance Agency is being started
The Bells were always interested in the insurance niche. Their education and experience turned them into excellent financial analysts. They also acquired legal expertise over 15 years. Therefore, as soon as they could manage the resources, they decided to start their own business.
George and Martha deserve credit for coming up with a unique Insurance Agency business model that prioritizes convenience.
3.3 How the Insurance Agency will be started
The insurance agency can be started by following these steps.
Step1: Become a licensed insurance agent
You can get an insurance agent license in a matter of weeks or months, depending on the requirements in your state. Since George and Martha introduced this business plan of an insurance company after almost two decades of experience in this sector, they already had a license.
Step2: Write your business plan
Your business plan outlines what you want your business to look like and how you plan to get there. The process of writing it should force you to answer complex questions, like what unique value you’ll offer your customers and how much money you’ll need to get started. You can get this Insurance Agency business plan template free download to get an overview of how to write a plan for your firm.
Step3: Choose a business structure
Your business structure determines how your business profits are taxed and how your personal and business assets are kept separate, among other things. There’s also an insurance-specific question you’ll need to explore and that relates to if you want your Insurance Agency to work with one specific insurer or with many different providers.
Step4: Form relationships with insurance companies
If you’re an independent agent, you’ll need to apply to work with insurance companies who you would represent. In the later sections of this insurance company business plan pdf, we will explain how establishing long-term relations with insurance companies can help you get more sales.
Step5: Grow your client base
If you choose to start an independent agency, you may have to hustle for your first few clients. Start by attending networking events and advertising in your local market.
Download this free insurance business plan template to help get a head start on writing a personalized business plan.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$237,600|
|Other Current Assets||$251,000|
|Start-up Expenses to Fund||$237,600|
|Start-up Assets to Fund||$863,600|
|TOTAL FUNDING REQUIRED||$1,101,200|
|Non-cash Assets from Start-up||$1,150,200|
|Cash Requirements from Start-up||$155,000|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$35,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$65,500|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,101,200|
|Loss at Start-up (Start-up Expenses)||$205,300|
|TOTAL CAPITAL AND LIABILITIES||$1,390,200|
Services of Insurance Agency
Different insurance agents offer different types of insurance schemes. Insurance business proposal offered by Lifelong Insurance provides a wide range of services to cater to a wide range of clients. Some of those are mentioned below:
- Life Insurance
We will offer life insurance to our clients by which we will pay a death benefit to the beneficiaries after the insurer’s death. The paid amount will be derived from the regular, premium payments.
In the market segmentation section of this life insurance business plan, we will explain who is expected to avail of this of our services.
We will offer reinsurance services whereby we will transfer portions of risk portfolios to other parties by some form of agreement. This will help in reducing the likelihood of paying a large obligation resulting from an insurance claim. Such transfers are a little risky to handle and require attention from the business plan insurance broker.
- Travel Insurance
The business plan for Lifelong Insurance also provides the service of travel insurance to its customers. Our travel insurance plans will cover medical emergencies, trip cancellation, trip interruption, delays, medical evacuation, and lost, damaged, or stolen luggage.
- Vehicle Insurance
Additionally, this Insurance Agency sample business plan also offers vehicle insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use will be to provide financial protection against physical damage or bodily injury resulting from traffic collisions.
It is recommended that you read multiple insurance business plan templates like these to decide what services you want to offer.
Marketing Analysis of Insurance Agency
Had the pleasure of working with Alex on a business plan for a new venture. The end result looks very professional. His communication is always prompt and he was very patient with my detailed requests. I would definitely work with this company in the future.
You must understand the market thoroughly before you step into it. It will help you understand the level of competition, potential untapped markets, pricing trends, and changing consumer preferences. You may go over different Insurance Agency business plan examples to get an overview of the current market trends.
5.1 Market Trends
The market size of insurance brokers and agencies in the United States reached almost $182 billion in 2020 and was expected to further increase in 2021. Hence, this is the right time to work on your insurance company business model and introduce it in the market. You can reach out to a marketing plan Insurance Agency to help you understand the changing marketing trends.
5.2 Marketing Segmentation
Common characteristics of a market segment include interests, lifestyle, age, gender, etc. It is essential to identify them to determine your target market. Every <sample>sample business plan for insurance company identifies different customer groups. In this marketing plan for insurance company pdf, Lifelong Insurance Agency specifies the following as its potential customers:
Business Plan for Investors
5.2.1 Aspiring Young Families
Young families have varying insurance needs. They need to avail themselves of life insurance policies, health insurance, and auto insurance. We will serve them in all these aspects. They will sign up for vehicle insurance as per this insurance sales business plan.
5.2.2 Young Adults
Lifelong Insurance will target this group with its competitive auto insurance rates and insurance of technology gadgets such as smartphones and computers.
This target market will need help with life insurance and long-term care. This group is also expected to get their vehicles insured by us.
5.2.4 Local Businesses
Small businesses have a myriad of insurance needs. At Lifelong Insurance, our representatives will meet each business owner and individually determine their insurance needs.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- Capture 30% of the market share within 1.5 years of operations.
- Maintain a CSAT score of more than 96 throughout the operational years.
- Negotiate with local businesses to expand our client base.
- Increase returns on interest by 15%.
5.4 Product Pricing
As per this business plan insurance company, Lifelong Insurance will keep its prices a bit higher than its competitors. It is because we have hired the most expert and competent employees. Moreover, we are providing several benefits as compared to our competitors.
Marketing Strategy of Insurance Agency
No matter how better you are performing as compared to your competitors, you cannot manage to get more sales unless you advertise with compelling arguments. In your business plan, you must define a sales strategy by which you intend to reach out to more and more customers.
To get ideas, you can read the business plans for insurance agencies that are available to you. You can go through similar business plans such as a bookkeeping business plan to understand how an influencing yet unobtrusive sales strategy is developed.
6.1 Competitive Analysis
- As per this business plan for an independent Insurance Agency, Lifelong Insurance will strive to be the best and quickest insurance services provider.
- Lifelong Insurance will go through clients’ requirements thoroughly before developing a customized insurance package for them.
- As mentioned in this sample business plan for Insurance Agency, we will hire people who are the most qualified, expert, and experienced for the post.
- We will build long-lasting relationships with our clients through constant communication.
6.2 Sales Strategy
This insurance agent marketing plan template includes the following sales strategies:
- Utilize social media platforms and online web presence.
- Utilize customer ranking websites such as yelp.com.
- Request referrals from satisfied customers.
- Collaborate with local safety institutes.
- Arrange seminars to spread awareness about insurance packages.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||5,940||6,296||6,674|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|Subtotal Direct Cost of Sales||$1,323,500.00||$1,543,201.00||$1,717,582.71|
All the costs associated with human resources are accounted for in this business plan for an insurance agent.
7.1 Company Staff
Under this Insurance Agency business proposal, these positions will be hired for:
- 1 Manager
- 5 Bookkeepers
- 2 CFP Agents
- 1 Admin Manager
- 1 Customer Care Executive
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
Financial Plan of Insurance Agency
As per this business plan for Insurance Agency template, Lifelong Insurance’s idea is to increase the premium charges on its different services over time to have greater profit margins. This business target stems from the fact that a skilled workforce and a sustainable business cannot be established without monetary resources.
As per this business plan Insurance Agency, the Bells will take several initiatives to boost their sales. If you are entering this venture you must analyze the financial feasibility of your startup by drafting the expected cash flow diagrams, and calculating gross margins.
To see what you must include in your financial plan, you can refer to the Insurance Agency business plan samples available on our website. Moreover, you can also take help from the financial plan documented below.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$1,323,500||$1,543,201||$1,717,583|
|TOTAL COST OF SALES||$1,323,500||$1,543,201||$1,717,583|
|Gross Margin %||51.92%||54.40%||58.73%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$561,700||$604,200||$656,725|
|Profit Before Interest and Taxes||$867,300||$1,237,073||$1,787,242|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
Tips on how to Establish a Successful Insurance Agency
If you are taking a gander to initiate an insurance agency, it is necessary to do an intensive background research to get a good understanding of the insurance sector before getting your feet wet. For instance, before you start offering a particular policy, it is exigent to get to the ground and identify the desideratum of the target customers. It is also a requirement to have a strong business plan that you can employ to run and make decisions in the insurance agency. Check out the samples of insurance agency business plans posted online to know how to design yours.
Having a professional business tactics template will save you on time that you would have spent creating your plan of activities from scratch. If you fancy a customized plan, consider seeking professional insurance agency business plan writing services. As mentioned earlier, one of the bankroll remonstrances of scribbling a contrivance is the amount of time and research that is required. Luckily, there are many professional insurance writers, who operate offline as well as online who can help you write insurance agency business plan samples. The charge for this service might be high, but it is better to spend money on a quality service than scribble a mediocre contrivance that will spell doom for your firm.
Results of a SWOT Analysis
Notictious Insurance Agency is focusing on the identification of the multifarious strengths and weaknesses that could promote the organization or lead to its downfall. As a result, we sort the ministrations of a crackerjack business-consulting organization that did a comprehensive SWOT assay. The results of this analysis will succor tract the concourse for success.
Our team was actively convoluted in the analysis and worked with the counsels to warrant that their recommendations were accurate and in line with the goals.
We take the results of the assay very seriously, and we are committed to making sure that we bring into playing the proposed organization recommendations to the letter.
For any business to succeed in the surpassingly vying and digitalized current business world, it needs to identify its core strengths. Business strength is something that sells to the target customers. Our insurance concourse’s core strength is its workforce, which is our insurance faction. Since our inception, we have engaged a team of experts who are committed and determined to warrant that customers get quality services. We have positioned our insurance organization to inveigle millions of prospects who need insurance agency business plans from the first-day operations. We have also invested in a modern application or software that allows us to streamline our insurance concourses and get in touch with our insurance prospects at any time of the day and without spending a fortune.
As a new insurance concourse in the nation, we will desideratum to generate an effective plan to penetrate the market and succeed in getting customers. We understand the insurance sector is very competitive, but we are sure that we have what it takes to tussle in the business with the other insurance concourses that offer similar policies that we plan to offer.
There are unlimited business scopes for our insurance concourse in the market today. We are prime to make sure that we take ascendancy of all business opportunities that come our way and this will greatly help to warrant that we start and uphold to conceive lucre for decades if not centuries.
A weak and unpredictable mercantile is one of the primary threats that could hogtie the surge of our insurance concourse and the insurance business at large. Every business faces its divvy of presage in spite of the verity that it might have a robust system of tackling the demurs. This is the main reason why institutions and the insurance concourses that we plan to rival in the market carries out risk assessment studies regularly to warrant that the concourse is conscious of the business changes in the market.
Another business fulmination that we are keen on responding to as we progress is the establishment of similar insurance agencies in New York. It is our hope that when that happens, we will have invested in business teams that will generate unique and unrivaled policies, which will keep customers streaming into the company.
Needless to say, the many realistic, implementable and winning business strategies that we have been capable to create and establish as credible ways of interacting with customers will surely give us a higher cutting-edge in the market. By providing quality insurance services to our chumps, we will be capable to expand and surge the business fast and warrant that it continues to reign supreme.
It is also importunate to point out that just like any other business or venture entity; the unstable financial markets are a significant threat. Similarly, economic changes and downturns, climate calamities, as well as government policies that do not favor the institutions are ostensible to affect our insurance provision services, but we are prime to handle them all and warrant that the concourse remains profitable.
By payment options, we are referring to the various channels that our customers will use to pay for premiums that they select. Notictious Insurance Agency takes pride in that we have a solid plan created by our finance department. This plan makes sure the prompt receipt of payments without compromising the safety of our clients.
Below are some of the deposit choices that our customers will have to apply to make payments to us on a monthly or yearly basis.
- Deposit by via bank transfer
- Deposit through online bank transfer
- Deposit through check
- Deposit through bank draft
- Deposit with cash
- Deposit through mobile cash platforms
Culmination of the settlement choices listed above will be through credible and reliable banking platforms as well as organization systems to eliminate any errors from occurring.
Advertising and Promotion Strategy
Although our insurance intermediary is different from the others on the earth, we do plan to make sure that we use media stations to advertise it. We are conscious of the fact that most people make a decision to apply the services of a particular insurance agency business plan given their referrals and reputation. Therefore, we will sweat on creating a good credibility and reputation score in the market to contend with the auxiliary insurance companies.
During the promotion of our insurance products, we intend to leverage in both computerized and print media. Our research has shown us that using this medium will save us hundreds of dollars that we can invest in other activities that will further promote the augmentation of the insurance institution.
Here is a list of the primary platforms that we are going to be using to create a brand acquaintanceship of our insurance company and promote the insurance products to our customers.
- We will advertise our organization through countrywide television stations, gazettes, magazines, and AM-FM stations
- We will have our organization TV program that will be discussing the policies that we provide
- We also going to be actively involved in community-based programs
- We will employ social media networks such as Twitter and Facebook to advertise our insurance products and organization
- We will invest in quality billboards that will be installed around the city and in auxiliary areas of the nation that we intend to open the organization offices
- We will consummate road shows from time to time to showcase our insurance policies to our customers
- We will disseminate dodgers and pamphlets to our customers on a monthly basis
- We will expedite rudimentary letters to Diaspora institutions, consulates, and conglomerates to warrant that they too are cognizant of our insurance policies and hopefully they will take up a few
- We will invest in branded vehicles and also brand the commercial buses
- We will encourage our loyal customers to market our products to their peers, friends, and colleagues by offering incentives such as discounts.
- What is the easiest way to complete my insurance business plan?
The easiest way to come up with a business plan is to take one step at a time. Start with developing an executive summary, get an idea of what your company looks like, and take down the ways you can execute your idea. You can hire professional services to get a business plan for a financial advisor. If you know the field, you may also write your business plan after going through a sample business plan template for an Insurance Agency.
- Where can i download an insurance business plan pdf?
There are multiple websites where you can find free PDFs for business plans. Whether you are looking for a holding company business plan or an Insurance Agency sample business plan, you can find the samples by doing a little resear
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