Start-up Business Advice

Depending on your state, it might be illegal to run insurance and real estate out of the same building. You are not able to do it in Florida.

You should check your state's department of insurance or financial services web page for information on how to get licensed.

As an agent for 15 years and recently just sold my company its an excellent business to make money in. The value of that recurring income is very high and people will pay well for it. The business itself, depending on state, can range from easy to difficult to get started. Same with keeping things going after you hit critical mass and have your client base. Florida, as an example, is a terrible state for personal lines insurance ownership while other states like MA are much easier.

Why? Well it depends a lot on the state, its risk factors, competitive nature and if you can get the appointments or not. Here in Florida its one of two things, companies either give their appointment to anyone with a pulse or its incredibly difficult to get appointed. Fortunately for us, we had experience in the business from a different state and were able to line up some of the better appointments. This allowed us to pick up companies that very few agents had and it carried us through the tougher times other agents experienced because when the fly by night carriers went under we had other markets to move clients to. Something other agents did not.

Florida was a double edged sword. Fewer carriers (home) and high risk means high premiums. If you can write the business its $$$$$$ and if you can retain the business when shit hits the fan its even more $$$$$$$$$$$ as the other agents shed their books and you pick up their clients with companies they do not have. Great business if you can get into that position. Not so much when the market falls out from under you when your largest carrier goes into receivership and you have no other markets available.

Unless you're in a state like MA which regulates exactly how much a company can charge for auto insurance, its a bitch. The best thing is to find yourself a niche with a stable company and fill that roll. There is so much competition with auto these days it difficult to hold on to people except super super preferred top tier customers and they are fairly rare these days.

Life and Health blows. You make higher commissions on the front end (life) but end up having to resell your client base over and over as those commissions fall off. The investment products they offer on the life side are also terrible for the client. I'd stay away from this. Individual health blows. Don't bother with it. Group health can be profitable if you have an in at large companies and can offer your plans or cafeteria style programs. I'm not a fan of that type of business though.

I'm a fan of personal lines in any other state besides FL. Markets are pretty stable, you won't have the asinine rules and underwriting guidelines and you should have a decent number of companies willing to give a start up a chance. Make sure you have a solid business plan, something that shows you are in this for the long run and makes sense with some capital to show you'll be around long enough to make this dream work.

Start by calling around for prices under fake names with a relative sample of homes. Get prices and see who is competitive price wise, check how long they've been in the market, run down and talk with an agency owner or two well outside of your area and see what they have to say, see which agencies locally have which companies and try and find a niche for yourself.

Agency management system isn't important right away. You can go hard file only until you make it or you can pick up a cheaper version of software like Eclipse from Nasa Soft instead of paying $$$ for Applied or one of the other big boys.

Good luck. Its not an easy business to get started in but if you make it you can make bank.