Over the last 10 years Momentum has worked with over 1000 individuals who have explored the potential of starting their own insurance brokerage.
Those who made the decision to start their own business have shared the lessons they have learnt and we have collated these to help you, as you explore the world of self-employment.
The number 1 reason why more people haven’t started their own business, is their lack of confidence in their ability to make it happen.
There are many successful client facing brokers with a loyal client base who put their trust in them. They deliver a substantial amount of income for their employers.
There is no reason why they cannot do this by themselves, but are nervous about their ability to make it happen.
If you are in doubt as to whether you can make it work for you, then:
- Speak to potential clients of your new business and get their thoughts
- Look at the source of new business and how much is self generated
- Speak to those who have done it before (Our AR’s love to share their story)
- Join one of our confidential Q&A sessions
- Book a discovery call with Momentum
Remember your clients buy into you and your service proposition.
While not all employers have post termination restrictions and covenants in their employment contracts, the majority do. It is important to seek advice on what is in your contract and in particular pay special attention to:
- Non solicitation and/or non-dealing covenants
- Confidentiality, GDPR and intellectual property restrictions
Covenants can appear daunting, but with the right advice and support you can avoid any legal wrangles with your ex-employer. These are unnecessary distractions to be avoided while you focus on building your business.
Doyle Clayton Solicitors provide some excellent guidance in this article.
An introducer network is a fantastic way for you to create new business opportunities and broaden your reach as a business. While it should be part of your marketing strategy you should be cautious in making them your main, or only source of new business.
Introducers, like clients, need to be managed and left to their own devices they are likely to go elsewhere. They have their own agendas and affairs to manage on a day-to-day basis and it’s important you keep your business front of their mind and manage them like a key account.
As the saying goes “Cash is king”!
Ensuring there is adequate cash in the business is critical in the first 12 months as your business gets itself off the ground.
Creating a cashflow statement and aligning expected new business acquisition, is a good way of ensuring that the pressures on cash are managed throughout the first year of trading.
With a little bit of planning and control you will be able to manage your income and expense.
Visit this website for a helpful guide and cashflow forecast template.
A quality business plan is critical in ensuring that the business idea is viable and in identifying the critical needs of the business. A common mistake for new brokerages is to choose their FCA Principal before finalising the business plan and properly understanding what their business needs are.
Share your business plan with trusted friends and family and ask for feedback. Do the same with your potential FCA principal and ask for feedback. Challenge them on their service proposition and make sure it is aligned with your plans.
Momentum have prepared a guide to help you create your business plan.
The support of family and friends cannot be underestimated. Talk to them about your ideas and your ambition and ensure that they are right behind you.
Starting your own business can be a lonely place and having their support to share the highs and lows will help keep you sane and keep your focus.
Making the decision to start your new venture can be a daunting one, but with the right planning and due diligence on your FCA Principal, you give yourself the best chance of success.
Momentum have compiled a helpful guide on what to consider when making your decision on who your business partner will be.
It can be easy to lean towards reducing earnings or asking for unsustainable fees which put pressure on cashflow and their ability to support their clients, but with the right discipline and advice from your Principal you can ensure you get the balance right.
Being small or a new venture doesn’t mean you need to compromise on value or the cost that value dictates.
Almost all brokers who start their own brokerage say that they should have done it earlier!
We trust you found this article helpful and gave you some insight into the world of starting your own insurance broking business.
Momentum has a vested interest in ensuring the success of its partners. No matter what stage you are at, we would welcome the opportunity to discuss your ideas and help make them a reality.