covers four areas Growing an Insurance Agency

well thank you for tuning into this online presentation best practices for growing an insurance agency my name is Michael mentioned with agency brokerage consultants we do valuations and mergers and acquisitions for independent agencies around the country and in doing that we’ve noticed some attributes of successful agencies and so we put this together wanting to share that information to a broader audience and so you’ll go through this we’ll cover a lot of different topics hopefully you’ll glean from this some information that you can put to practice but if you have any questions feel free to call me or email me my contact information will be on the last slide so without further adieu we’ll get started quick overview we’re going to go through a brief introduction and we’re going to talk about managing your agency’s finances keeping and growing what you have finding new business acquiring someone else’s agency or book a business and then I’ll leave you with some final thoughts in a case we’ve never met there’s my photo so recently I read an industry report that went through some attributes that are needed to succeed an insurance agency most of these are pretty obvious having carrier access is one of the key ones having networking and marketing skills understanding the products that you’re selling having technological capabilities utilizing technology to improve how you run your agency and data management being versatile in the market and complying with state and federal regulation in simpler terms though agency success is typically contingent upon one effective management of an agency’s finances keeping the business that you have that’s keeping the accounts that you’ve already written acquiring new business and if you really want to grow acquiring someone else’s agency the fastest growing agencies in the country are those that are out there acquiring other books of businesses or agencies based on the nature of the business you know the retention rates are typically pretty high so you can usually retain most of the business you acquire and then continue to grow organically so these are the four topics I’m really going to focus on for the rest of this presentation managing finances most agencies fail to grow due to a lack of capital or financial mismanagement that’s common with most businesses but it’s also common in the insurance agency business if you want to grow you have to continually reinvest in growth meaning don’t strip out the profits a lot of agencies get to a certain level where the owner is comfortable with the income and then the owner just takes out all of the excess capital and uses it for their own personal life some considerations your business’s financial model proper accounting budgeting cash management monitoring productivity so we’re going to talk about is understanding your business financial model how to properly handle your bookkeeping and accounting thinking about budgeting and then just keeping your thumb on your business by monitoring your productivity so first off what is the financial model financial model really is the allocation of the money that you have coming in to cover specific expenditures so of the revenue how much is going towards payroll how much is going towards rent advertising all those things what is the financial benchmark it’s really a comparison of your operating performance against other industry other competitors in the industry how they’re spending their dollars two different financial allocations and why should you know these things one is you want to maximize the profitability and the value of your agency to maximize the productivity of your staff and your marketing dollars and 3 budgeting for the future to make sure that you have enough money set aside to continue operation of the business some years ago I created this breakdown basically looking at agencies from under a financial model from two perspectives one is one that has a sales driven model where you have primarily producers out generating business the second is from a marketing driven model where the agency is doing most of the marketing and driving the phone calls and all the leads and so based on your mark marketing model that kind of drives your financial model so agencies that have producers typically 20 to 25% of the revenue

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