Updated 12:43 PM ET, Thu August 20, 2020
Sure, you can build tremendous wealth by going into business for yourself, having your own company.
This article is an excerpt from our new ( soon to be available) book: "An Entrepreneurial Approach to Starting Your Very Own Insurance Agency"
The overall points of any business are to produce income and appreciate in value. These are the main reasons (I hope) you are thinking about going into business for yourself.
That is to say that, while you wish to earn a paycheck doing what you do, you would also like the added benefit of growing something you can sell later at some type of multiple.
I know I touched on this a bit earlier. I bring this up again to illustrate how important it is that your overall goal of business is in-line with the true advantage of entrepreneurship.
From day 1, you will want to run your organization to accomplish and maximize on every aspect of the basic pillars of business as discussed.
You will want to establish repeatable systems that can be taught to just about anyone, bring as many folks in to plug into these systems, all in an effort to scale – grow your business exponentially.
The need to scale
If you have ever had the pleasure of being acquainted with someone whose job involves investing in companies – whether established firms or startups – you will notice that they are typically looking to back organizations that have, as Marcus Lemonis from CNBC’s The Profit, calls it: “The three P’s: People, Process, Product”.
The concept is pretty simple, and the logic behind it goes something like this: In order for a business to have staying power and be robust enough to scale and achieve the 10x factor, these three pillars must be finetuned.
To most professional investors, an investable business is one that has streamlined its systems, has some of the best people working for the firm - folks who are as committed to seeing the company thrive as they are talented - and has a unique, superior product to offer to the marketplace.
You must look at your business, and view the road ahead in terms of trying to achieve near perfection within the context of your three P's.
A simple calculation
Your insurance agency, like all other commercial ventures, must grow. It is in everyone's best interest that your firm starts out with a plan not just to operate but to grow as well. This mission must be well documented in all your plans, including any pitch documents and/or business plans you craft.
You should have a plan to grow your client base, and therefore, your bottom line. You must be able to, in terms of agents, go from just you to numerous agents.
We must all scale our business to facilitate the accumulation of wealth for all shareholders and for your company to continue to expand its reach to touch more lives.
Best of breed
If you look around you, you will notice that there are two types of companies out there. There are the mainstream brands, the ones that have national, even international reach. You know, regardless of which city or country you find yourself in, you are at all times no more than ten miles away from a Starbucks.
You can always find a Wal-Mart when making your way through the United States. Then there are the one-offs. The types of businesses that may have just one or two locations.
I am talking about that one coffee shop in your neighborhood you go to all the time. You know you love the coffee there and the people there are awesome too, but you just cannot seem to remember the name of the darn place.
Or that convenience store next to your house. The one you go to all the time, but gun-to-head, you cannot recall the name of the place.
Note that a majority of businesses start out as mom and pops. Most Iconic companies start out as just a small business somewhere in some little town, on some little road.
Starbucks was started as one of those small neighborhood coffee spots in Seattle Washington. Sam Walton famously launched Walmart as a single discount store in 1950.
The original store was called Walton's 5 & 10. He formally launched the Wal-Mart brand in 1962 with a single store. By 1980, he had expanded throughout the USA, operating a store in every single State.
In 1990, Wal-Mart opened its first store in Canada. The team at Wal-Mart, obviously have had and executed and continues to look for opportunities to scale their business.
Recently, the largest retailer in the world has been making significant investments in the digital and eCommerce space.
As you start to look at starting and building your insurance agency, I urge you not to become the one-off somewhere that sure, doses some business but really does not have a brand.
The type of business that dies with the owner. I advise that you clearly map out a plan to scale your business. There are a few ideas I can share that can help point you in the right direction to prepare your business to be scalable.
More money, more problems.
Let’s play a game of "Would you rather": Would you rather make a $1000 mistake or a $100,000 one? Would you rather have labor issues with just one employee or twenty employees?
Would you rather struggle with paying rent on a $2000/month office space or on a property that sets you back a cool $20,000 a month?
You get the idea, don’t you? Know that fumbling in business is not an “if” but a “when”. You will make mistakes, especially when you first get started. You will struggle to find the right kind of folks to work with.
You will have to kiss a few frogs to find that one or two insurance carriers that work for you. This is a fact. The key to making mistakes in business and in life is that your mistakes are not significant enough to permanently sideline you.
As you begin to scale your business, you will make mistakes, and yes, these missteps will cost you money. That is a given. I will urge that to mitigate some of these issues that you do your best to fine-tune all aspects of your business before you start to execute an overall (rapid) growth plan.