Why do start up insurance brokerages fail, or never start in the first place?

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!