How to Start a Budget Insurance Agency to Maximize Margins

Making money costs money, especially when you’re starting a new business. When jumping into the creation of a new insurance agency, you’re investing a huge amount of startup capital into a risk that might not pay off. That’s why it’s essential to look at every penny spent during your launch — you want to make sure that investment is working at maximum capacity. 

1. Look at Other Insurance Agencies in Your Network

It’ll be tough to outshine competitors at the very start of your business, but you can use them as models for what and what not to do. Take a look at what local agencies around you are doing and what their structure is. What resources do they invest in? How are they marketing? How are their agencies faring? 

Most importantly, what do clients think of them? Look around on review websites for client feedback. Not only does this feedback tell you what your competitors are doing right, but it also tells you what they’re doing wrong. If multiple clients are online complaining about a lack of personalized service, then that’s the way to make your new agency stand out.

2. Start Out Simple and Focus on Quality, Not Quantity

When you’re building a client base, you might feel tempted to spend your money on trying to gather as many leads as possible, but that’s not always the best strategy. Small businesses thrive on referrals, but you only get referrals when you provide exceptional service. You can’t do that if you’re stretched thin between thousands of leads. Your staff is going to make the same amount of money for 40 hours of lead gathering or 40 hours of client interfacing, so make sure your money is going towards work with the highest early return on investment.

Additionally, set tangible goals, not future goals. It’s great to have a five-year plan, but the very beginning of a business may not be the time for overreaching. Look at increasing productivity by even 1% or growing your customer base within a single zip code. In the beginning, it’s the small victories that make the difference.

3. Embrace Low-Budget Marketing and Social Selling

All new agencies need traction to get off the ground, but with a low budget, you want to market smarter, not harder. Major marketing costs money, but there are three easy ways you can build a client base without digging deeper into your finances: 

• Social Media: Simply having social media accounts already puts you at the top of the game. While insurance may not seem Instagram-worthy, when prospective clients see you on social media, they relate more easily and are more likely to look deeper into your company. The average person sees between 6,000 and 10,000 ads and accounts every single day on social media — you should be one of them.
   
• SEO: SEO (or Search Engine Optimization) is difficult but beneficial. Good use of SEO ensures that when someone searches something along the lines of “independent insurance agency”, you end up on page one of the results, not page twenty. You probably won’t be able to outrank national companies, but getting into the SEO game from the beginning makes you more likely to climb up those search engine results over time.
  
  
• Networking: You’re a small, local agency — so get to know the locals! Go where your clients are. If you’re focusing on a specific type of insurance (i.e. auto insurance), go to your local car dealer. Customers at that car dealership may ask for insurance recommendations when buying; you want them pointed your way.  

4. Focus on Time-Saving Strategies

Time is your most valuable asset at the start of your journey. You’re going to have more on your to-do list than you can get done in 24 hours, which means prioritizing and consolidating is key. 

Make lists of what you actually need to get done each day to avoid falling behind. Work on delegating to ensure you’re fully utilizing your staff. If you’re just building your client base, you don’t need all your agents on client communication. Spread out the labor so that you’re up and running at full capacity by the time clients start coming in.

5. Invest in an Affordable Agency Management System (AMS)

There are a few things you must have when starting your agency: licensing, capital, and an AMS. An AMS (or Agency Management System) might sound optional, but as more and more agencies go digital, you can no longer stay competitive without one. AMS software organizes your company, automates multiple processes, communicates with clients, and manages financial data. 

The question is no longer whether or not you need an AMS — but rather which one to invest in.

Eclipse AMS Starts Your Agency Off on the Right Foot

AMS software is a non-negotiable part of your agency, but you need one that’s affordable and won’t charge you extra for bells and whistles you’ll never use. That’s why NASA designed Eclipse. The Eclipse insurance software offers a simple, intuitive program for small, independent agencies. It automates what you need and doesn’t complicate what you don’t. 

In the spirit of keeping things streamlined and straightforward, NASA also offers low-cost data conversion services. So, if you tried out an AMS from another company that you don’t like, we can transfer your client information into Eclipse to save you time and frustration. We also provide training for your agents with an Eclipse expert so that your team doesn’t waste any time troubleshooting a new system. When you’re starting a small business, you need software designed with a small business in mind. Request a demo of Eclipse today and get your agency organized from day one.