You Wouldn’t Take a Trip Without a Map or GPS

You Wouldn’t Take a Trip Without a Map or GPS

As we enter the last quarter of 2013 it’s time to make that final push for production and to start the planning process for 2014. The day to day operation of an insurance agency is pretty hectic and it’s not easy to find the time to stop everything and make a plan of action for the upcoming year. That said you have to make the time or your agency will run like a boat lost at sea; drifting along, out of control, with no direction and no ultimate destination.

Creating a plan is not easy and requires an honest assessment of where you are today – both your strengths and weaknesses. It’s not easy to look at and discuss your weaknesses and you may find yourself making excuses for your shortcomings. It’s also easy to get overwhelmed with all the things you want or need to do so it’s imperative that you prioritize your plans focusing on the most important items first. If your plan involves significant changes to how you currently operate it may be stressful to some of your staff because many people don’t like and resist change. The most successful plans involve input from everyone and each person need to buy in to the plan once it’s put in place. Not buying in or resisting the necessary changes will sabotage the success of the plan and must be dealt with quickly.

The obvious place to start your planning is with production because revenue is the fuel that powers the agency’s success. Most agency’s plans involve increasing revenue through growth and retention. This is a pretty easy step. You project where you believe you will come in at the end of the year, how much you want to grow and viola you know exactly where you want to end up next year. Seems simple enough, some projections and simple math and you know your goals.  It may seem simple, but here are some of the factors that go into turning the numbers into reality:

• How will this growth be divided amongst the producers?

•Are there producers who are not currently reaching their goals and may not reach these?

• What support and training is necessary to reach these goals?

• What changes in the workflow are necessary to assist the producers in reaching their goals?

• What is the agency’s plan for marketing support?

• Do we have the right carriers necessary to meet these goals?

• Are you expecting the CSRs and Account Reps to sell?

• Have they been trained and is there adequate time allotted for sales?

• If time is an issue how can we use technology and workflow changes to create it?

• Are we looking to maintain retention or improve it?

• What changes are necessary to meet the retention goal?

This is a fairly simplified version of an agency planning process. It is revenue focused and for some agencies this is all that they focus on. To be successful it’s important that an agency meet regularly (at least monthly) to review their progress and to make adjustments when and where necessary. This would be a great start for any agency that is currently not doing any planning or who has not been successful in creating organic growth.

For many agencies this level of planning is too simplistic and ignores long range plans and needs. Those agencies look at a much wider number of areas in developing their plan:

• Staffing – hiring, training, attrition, retirement, permanent vs. temporary, offsite;

• Technology – upgrade/change, mobility, software/hardware needs, training;

• Carriers – volume commitments, profit sharing, growth, commissions, ease of doing business;

• Marketing – website, social media, digital vs. traditional, competitors;

• Advertising/Community Involvement – budget, best use of resources;

• Growth – organic vs. acquisition, agency purchases, funding;

• Fixed costs – building, supplies, vehicles, communication, expenses, payroll, benefits, etc.

• Agency ownership and perpetuation.

I’m sure there may be other areas that could be added but the purpose of this article is not to create a definitive list. The real purpose is to get you, the reader, to review the planning you are doing and decide if it is meeting your needs or should be expanded. Obviously if you are not doing any formal planning in your agency I would recommend you get started. I am pretty comfortable in saying that operating an agency without any formal planning will keep an agency from growing as they should and will very likely cause its failure or sale down the road.   As I mentioned in the beginning of the article, setting aside the time to develop and implement a plan is not easy but the benefits you will reap if you take the time are well worth it. If your plans seem overwhelming concentrate on the most important ones first by prioritizing. Success is created through hard work not luck. A well thought out plan creates the framework for success and allows you to measure and monitor your progress.