I've been going through an amazing experience the last couple of weeks: learning how to fly a really complicated airplane. I'm a commercial pilot with about 1,700 hours and instrument rating, and have a lot of experience flying a bunch of different kinds of airplanes. And yet, this experience took me all the way back to completely incompetent and overwhelmed mode.
I think this is a great example about the many things to learn about starting an insurance agency and breaking into the insurance business.
The first thing is, I couldn't have begun to try to fly this airplane without a whole lot of experience. The same thing is true in starting an independent insurance agency.
The Preparation you need to Start an Insurance Agency
We occasionally have people come to us and say, “Gosh, I'd love to start an insurance agency to go with our automobile dealership / our wealth management agency / our CPA firm” or something else like that. And we usually say “no”.
3-5 years of experience in the insurance industry
We say no because the business owner or the entrepreneur who wants to do that doesn't know anything about the insurance industry, about books of business and types of insurance. They also don't know how to be an insurance agent or deal with insurance companies. And frankly, there's just some preparation that's required to be successful.
That's why we look for folks who have three to five years or more experience in the insurance agency business. We know they can't get past the “overwhelmed” stage unless they've got at least that much experience working with insurance products.
Hard work: You Have to Put in the Work
My instructor said to me the other day, “Tony, flying an airplane is one of those things that you have to do the work for, you can't write a check in order to be good at it”. And the same thing applies to starting an insurance agency: you have to be willing to do the work.
Some of the work is thinking work and book work - business plans, office space, licenses and permits, error and omission coverage... And it takes a lot of preparation.
I've had to spend a lot of time over the last six weeks reading and trying to memorize information in about 2,000 pages of manuals!
Books you must absolutely read
The good news is that to do that prep work for an insurance agency isn't quite that onerous. I've written a book called The UnCaptive Agent, which in about 200 pages, attempts to walk you through what you need to do and think about and the checklist you need to answer in order to start your own agency. I encourage you to think about using it if you're considering starting a small business as an independent agent.
The other book that I would highly recommend is called Traction. It's written by the founder of the Entrepreneurial Operating System or EOS, Gino Whitman, and Gino gives you a concise and easy to follow way to operate any business successfully.
Those two books in combination with your own efforts and experience with insurance carriers will set you up well for starting a business like your own insurance agency. If you have the experience, all you need is the commitment to do the work.
More on that next time!
Always keen on helping others make their dreams come true, Tony and his team have helped independent agents grow into more than 250 independent agencies. This has made OAA the number one ranked Strategic Master Agency of SIAA for the last 5 years, and one of Oklahoma's 25 Best Companies to Work for.
Tony loves to share his knowledge, insight and wisdom through his bestselling books as well as in free mediums including podcasts and blogs.
Tony and his family are members of Crossings Community Church, and he is very active in community initiatives: he’s chairman of It’s My Community Initiative, Inc., a nonprofit working with disadvantaged people in Oklahoma City; and chairman of the Oklahoma Board of Juvenile Affairs., and he has served through many other organizations including the Salvation Army, Last Frontier Council of the Boy Scouts of America, and the Rotary Club.
In his spare time, Tony enjoys time with his family. He’s also an active outdoorsman and instrument-rated commercial pilot.