Business of Insurance Podcast

Episode 72 - If you’ve been listening to the last few episodes, we’ve been breaking down the steps you need to consider before starting a business. The concepts shared in these episodes are the foundation of building a successful business, no matter what kind.

Bottom line in business is You Don’t Know What You Don’t Know

You see, too many people jump into starting a business without doing any planning. Then they wonder why they aren’t finding success, as if business should just fall from the sky!

For some people even if they don’t plan, they might get lucky but the majority of people put in a lot of hard work, time, money and sweat equity to get their dream of owning their own business off the ground.

For many people it’s trial and error

It’s figuring out what to do as they run into trouble or finding answers when they least expect to. 

Even if you do extensive planning and research before you start your business, you will hit obstacles, but the more you are prepared with your foundation, the better chance of success you will have.

In this episode I want to recap the top 5 things I think you should focus on when planning to open your business. I’ve talked about these before, but I’m hoping that if they have their own episode, you’ll pay attention.

Quick recap

• Marketing Plan

• Focus

• Business Team

• Capital

• Contracts

• What’s your end game

Ideas To Consider

• Have a plan. You can take courses on how to create a business plan, and your plan can be 30 pages or 3 pages. I’ve even heard of a one page business plan, but it’s hard to get a lot of details on one page!   There’s two things I think are essential in your plan. 

  1. The first is marketing. And I think this needs to be very well defined. Maybe you need to do a little market research to test your idea before you can create a solid marketing plan, but without this, you are doomed. I also think that when you define your marketing plan up front and look at the costs for each tactic you want to implement, then you can budget accordingly which is the se cond part of the plan that I think is essential. I’ll get back to that part but let's talk about marketing first.

  2. The second is financial - For someone like me, this is the toughest part because while I understand math and some accounting, financial projections aren’t something I can easily wrap my head around. I see this part as start up costs - what you need to really open your doors, how much capital do you need to pay yourself or a staff for the first year while you are growing your business and how much reserve do you need in the event things don’t go as planned? Map this part out, give it to your banker friends and ask their opinions. This is essential and often overlooked by many startup entrepreneurs. It’s why first year entrepreneurs have such a high failure rate.

• Focus on what you want to do - It’s ok to pivot down the road as many companies do, but if you are starting as an agency, an insurance company or a related insurance partner, be focused. Don’t try to be all things to all people. It is the greatest component of success for startups.

• Put together  you business team. I’m not talking about staff but the other professionals that can guide you. Don’t hire your family member if they don’t specialize in what you need. For example, you need a business attorney, not the family law attorney. Get a good business accountant, and make friends with your banker, payroll, bookkeeper, human resources and even other insurance professionals that aren't doing what you hope to do.

• This ties into the financial piece, but having enough capital to get you through is essential. This is really the hardest part. So many people want to start but don’t have the capital. They bootstrap it which can work but it would be so much easier if there was capital. If you are working as you are thinking about starting a business, get your loan while you are working for someone else because once you become self employed, the lending rules change and it’s not easy. In 2023 when everything is out of whack from COVID, getting a bank loan is really difficult so get it before you leave your salaried income.

• Contracts - Be sure to read all of your contracts thoroughly. I would strongly recommend having them reviewed by your business attorney. It might cost a few extra dollars, but trust me, they’ll see things in a different light than you will and offer good tips for negotiation. If you have a partner, have a contract - the more detailed the better. It needs to discuss what is involved if there is a breakup. Better to get it right before you start then pay thousands when no one is talking to each other. A business breakup is no different than a marital breakup. Your business pre-nup is the most valuable document you can create. Have contracts with business vendors, employees and review your insurance company contracts thoroughly. Don’t sign on the dotted link just because you get offered a contract.

• This last one is a bonus idea but I think it is essential to set yourself up with the end in mind. It doesn’t matter if the end is 30 years away, be thinking like that. Build a business you can sell if you need to. We don’t know what life will bring us tomorrow so if you set it up right from the beginning, you don’t need to worry about a surprise obstacle getting in your way. 

If you can’t tell from the past few episodes, this is my passion. I love helping people get started in business. I’m not as good with someone that already has 100 employees, but for the start up, my heart sings! 

If you have questions, feel free to reach out. You can find me on LI and FB. I have a group called The business of insurance, but it’s not that active. If you want to be a part of it, let me know and I’ll let you in!

Thank you for listening to this series on how to start a business. If you know someone thinking about getting started or someone that has been in the business for a short period of time, please share this information with them. 

It’s free and valuable!

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If you haven’t done so already, please follow, like or subscribe to this podcast on your favorite podcast player. The terminology for this has been changing, but we want you to get our podcast when new episodes are published, so check the platform where you listen to podcasts and make sure we are in your playlist!  We are on all of the platforms including spotify, IheartRadio and Apple podcasts.and Google Podcasts.

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ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. She also works in the health insurance space, focusing on helping people navigate the Medicare Maze.

She is the co-author of Renewable Referrals.

Connect with Debbie on LinkedIn, Twitter or Instagram.  

EP -71  If you haven't listened to episodes 65-71, they set the stage for this final episode on things to think about when starting your own insurance business. Regardless if you are starting an agency, an insurance company or a related business to the insurance industry like technology, claims or risk management, the concepts of starting a business are the same. These are discussed in these episodes and can help with your thought processes and planning.

Pre-planning, part 2 provides ideas to implement 6-12 months before you are ready to open your doors. If you don't have a year to plan your business, you can fast track these ideas. It's the concepts that you want to consider to assist in starting your business with a greater chance of success.

Months 6-9

• Define business objectives 
• Pick a name for your business 
• Look for office locations 
• Write a business plan 

Month 10

• Decide legal form for your business
• Set up recordkeeping system
• Establish a relationship with a banker
• Open a business checking a account

Month 11-12

• Prepare cash flow projections
• Define amount of investment you’ll need
• Prepare financial statements
• Obtain license insurance, permits
• Secure financing
• Set up office and operational space
• Purchase business cards, office supplies
• Hire staff

SHOW THE LOVE

If you haven’t done so already, please follow, like or subscribe to this podcast on your favorite podcast player. The terminology for this has been changing, but we want you to get our podcast when new episodes are published, so check the platform where you listen to podcasts and make sure we are in your playlist!  We are on all of the platforms including spotify, IheartRadio and Apple podcasts.and Google Podcasts.

SPONSOR

Insurancemailboxpower.com

CONNECT WITH THE PODCAST ON SOCIAL

FACEBOOK GROUP

FACEBOOK PAGE

TWITTER

ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. With over 30 years in the industry, mostly on the property and casualty side, she currently works in the health insurance space, with a focus on helping people navigate the Medicare Maze.

She is the co-author of Renewable Referrals.Connect with Debbie on LinkedIn, Twitter or Instagram. 

EP - 70 This episode provides additional insight into starting your own business in the insurance industry.

We'll cover ideas to help you map out the process over the course of several months so you don’t have to do everything at one time. We'll talk about tasks that can be broken down over 12 months or done in 30 days if you don't have much time.

Month 1 -2 

Define your ideas - what area are you going into? Agency, carrier, claims, Life, health, will you just do something like work comp, airlines or medicare? Maybe you are thinking technology in the form of a CRM for insurance, maybe you’ll white label a product that is working in another industry. There are a lot of things in between, these are just examples. But give some thought to your direction. Will you set up your business like everyone else or do you have ideas for being innovative? I don’t believe any of this is incorrect, you just need to define what you want to do and make sure you have done the research and have a great plan for moving forward.

Month 2-3

Assess the impact on your life and family - I believe this is often overlooked and is an essential component of going into business. A business is like having another child. It is expensive, it takes a lot of your time, it can eat up your resources until you start making sales. Your spouse needs to buy in emotionally and financially. When I started my first agency back in the early 90’s I thought I had my husband's support. We agreed that I could tap into our home equity loan which was $25,000. Our marriage was set up where we each paid 50% of everything so I needed that money to pay my portion for awhile.( 2 kids with childcare, mortgage, groceries, and a car payment, along with the business expenses) 6 months into starting my agency, my husband was freaking out. I was making sales, but not enough to pay 50% of my bills around the house. Since I was home based, he thought I was doing nothing all day and that we could stop sending the kids to daycare and same some money. He just didn’t get it. Ultimately, we got divorced and while it was over a completely different issue, my being self employed weighed into it heavily. When I went looking for another partner, I wanted them to be in sales and understand being in business. I wasn’t going to be with someone else that did not understand you have to make some sacrifices short term for long term success.  I can’t stress how important it is to get complete buy-in from your spouse or partner about how the finances and time will be for the next 2-3 years. If you aren’t making money after that then you might need to reassess!

Month 3-6

Locate sources of business advice and support - in the last episode, episode xxx, we talked about different members of your team. This wasn’t people that would be on your payroll but people that you would get advice and wisdom to make sure you are successful. If you missed that episode, please go back and listen to it again.

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Since we are talking about getting started in business in this episode, once you decide on your company name and logo, you can create a few custom items to see how it feels. Put the name and logon on a coffee mug, order yourself  some custom pens. Just test it out to see how it feels before you commit to the final copy. 

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Continuing in month 3-6

Obtain necessary skills - depending on what type of business you are starting, will depend on the types of skills you need. If you aren’t good at sales, take some sales classes. If you aren’t good at leadership, take some classes, if you don’t know what is involved in running a business, take some classes. Do this before you get started, so you have a better chance of finding success earlier, not after you open your doors. You’ll always need to be learning and there are different ways to get the information that you need, but the more you do this before you open the doors, the less mistakes you’ll make when the doors open.

Research carriers, IMO’s, Aggregators,industries etc.If you are going on the agency side, who will you write your business with? I think it is really important that you really do your due diligence here. Get the contracts. Read them. Have your lawyer review them. Sit on them and make sure you ask questions. Don’t take anything for granted. It’s easy to sign one, it is not always easy to get out of one. It might mean going to a few industry events to ask people who they are using, getting some feedback from others before moving forward. By doing this part before you open your doors, you will save yourself a lot of time and aggravation down the road. 

• Topics to consider:

  • What are the sales expectations, what technology do they provide? 

  • Can you test ride it? 

  • What type of support is available? 

  • How are commissions paid? 

  • What about overrides and contingencies? 

  • What happens if you want to leave or move to another organization?

  • What happens if you sell your business?

There’s a lot of information you need before you sign up that will help you to be more successful. 

Since there’s a lot of information to planning to open your business, we are going to stop here for today. We’ll pick up what to do in the next episode. 

So until then, KEEP CREATING OPPORTUNITIES

SHOW THE LOVE

If you haven’t done so already, please follow, like or subscribe to this podcast on your favorite podcast player. The terminology for this has been changing, but we want you to get our podcast when new episodes are published, so check the platform where you listen to podcasts and make sure we are in your playlist!  We are on all of the platforms including spotify, IheartRadio and Apple podcasts.and Google Podcasts.

SPONSOR

Insurancemailboxpower.com

CONNECT WITH THE PODCAST ON SOCIAL

FACEBOOK GROUP

FACEBOOK PAGE

TWITTER

ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. She also works in the health insurance space, focusing on helping people navigate the Medicare Maze.

She is the co-author of Renewable Referrals.

Connect with Debbie on LinkedIn, Twitter or Instagram. 

EP 69 - We get training for being an insurance agent but we don’t get training for being a business owner. They are two completely different hats. If you want to succeed in Business you need to have a team. I was recently listening to another podcast with an angel investor and she said the first thing she looks for is who is on the team and what is their experience.

You need a team. It’s nice to think you can do everything yourself, but something will be lacking if you don’t bring on help. So here’s what your team should look like.

Accountant 

• Consult with an accountant for guidance on your entity choice.
• Have your accountant show you how to initially set up your books - 
• Use your accountant as an advisor to different financial decisions you can make with your business.
• Meet with them quarterly for business planning ideas

Bookkeeper - someone that can help with commissions, payroll, balancing your accounts 

Lawyer 

• Get guidance on your entity structure
• Let them review and create different documents for you

Marketing 

• Let them help with your webite, branding and a marketing plan

Insurance - if you aren’t doing commercial P&C on a daily basis, partner with someone that is and let them be your agent. They can talk to you about the newer coverages like cyber and  AI but also make sure you know about the other coverages usually offered in a BOP., 

Banker 

• Get to know several bankers. They can be your best friend.
• They work with a lot of other businesses, they have their pulse on what is going on in the economy and they know who is lending, who isn’t and where you can find money.

Human Resources  

• Find an outsourced HR firm that you can use. Maybe you need them once a month, or once a year,  having the professionals at your fingertips is a great way to keep yourself out of hot water with employees. 

Mentor / Coach 

• They can save you years of mistakes because they’ve been there, done that. Rather than trying to figure it out for yourself, they have the answers.

SPONSOR

Insurancemailboxpower.com

CONNECT WITH THE PODCAST ON SOCIAL

FACEBOOK GROUP

FACEBOOK PAGE

TWITTER

ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. She also works in the health insurance space, focusing on helping people navigate the Medicare Maze.

She is the co-author of Renewable Referrals.

Connect with Debbie on LinkedIn, Twitter or Instagram.  

Today’s episode is one of several episodes about how to get started in the insurance business. I’m not talking about becoming an agent, I’m talking to those of you that are thinking about starting an agency, an insurance company, or an an insuretech business. There’s a lot more to hanging a shingle that says you are open. As part of the planning process for starting a business there are some concepts to consider, these are about yourself.

As exciting as it is to start a business, there’s a lot to consider. It’s not all glamor and glory!

Most business owners would agree it’s a lot of hard work, a lot more than they expected. It’s long days, weekends and holidays. Many business owners lose their marriages over their business. As I mentioned in the last business, 90% of business fail in the first year. 

The circumstances around why they fail vary, but often it’s with the concepts I’m discussing today.

In the last episode we talked about why business fail:

• Lack of a marketing plan 
• Missed market shifts 
• Ignoring the customer
• Lack of financial understanding
• Poor management
• Location 
• Motivation 
• Life’s distractions 
• Lack of planning 

INTRO FOR PART 2 - RECAP THE ABOVE AND THINKING BIGGER AND W HY YOU WANT TO START A BUSINESS

The first thing I want to talk about is 

Thinking Bigger

• As you are thinking about starting a business, don’t think about something small to just pay your bills or starting something as a hobby while you raise your family. Think in terms of building something that you can be proud of, that you can expand, most importantly, that you can sell!
• Think in terms of how you will build a team, how you’ll grow so that it isn’t just you doing all the work all the time. There are a lot of companies that encourage you to grow your business by recruiting - that’s not what I’m talking about. Build a business where you own the business and the people on your team are your employees. While the network marketing concept works, I personally don’t think that is a good business model at all. You don’t have much control and it’s not a model that you can scale and sell! One day I’ll really talk about how I feel about network marketing and recruiting, but for this purpose, I want you to think about a team that supports you, that helps you to be more successful, that you can delegate to and have them expand your brand.
• Women who start businesses often have a smaller vision. Don’t get mad at me for saying that but after teaching this presentation for over 5 years, it’s something that I’ve witnessed firsthand. Women who start businesses often think about a business that is close to home and around their family and not something that is  scalable. I can’t tell you how many women want to start a baking or food business or a party business for kids. I’m not saying that’s a bad idea but after many of them have done their market research they realized that it wasn’t a business that they could really make a profit or build to sell. 
• Insurance is a little different. Since COVID, a lot of people have realized that they can run this type of a business virtually, but I’m not sure if that is sustainable long term. Good market research will help to prove that. There are so many different type of insurance businesses that you can start: i.e. an agency, a brokerage, an FMO, an insurance company, a captive, a direct writer. You can focus on life, health, personal lines, commercial, yachts, tech or international. Under the umbrella of insurance, you have a lot of choices!
• This is why you need a plan. I talk about having a plan all the time but remember fail to plan, plan to fail. 

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Understand yourself better: 

• Why do you want to start a business? 
• This is the most important conversation you need to have. I mentioned it a little in the last episode, don’t go into business because you think you can do it better than someone else….unless you really can. 
• Here’s some reasons why people go into business:
• Create a career for yourself - while there is plenty of employment opportunities today in 2022, that wasn’t always the case. Back in the 80’s a lot of people went to college and couldn’t get jobs. When we went into lockdown with COVID and a lot of people lost their jobs, and the entrepreneurial type started delivering groceries and filling grocery orders.  People will find work when they need to. Starting an insurance business can be a great career - the question is, are you better as a business owner or as an employee or subcontractor to someone?
• Some people go into business because There’s a demand for what you are selling. Insurance is a product that people need, but not all people know they need insurance. Not all people want to spend the money for something they may never use. If you are connected to a few auto dealerships, it’s easy to get auto insurance from new car buyers.There’s a demand because people can’t drive their car off the lot without car insurance. If you are connected to some mortgage lenders, it is easy to sell homeowners insurance because people can’t go to closing without homeowners. I was speaking to someone recently who couldn’t understand why she had to pay money for automobile insurance all of her life and she’s never had an auto claim. Money spent for nothing is the way she looked at it. So while people need insurance, it’s not always an easy sell like a new iphone or a new tesla!
• Another reason people go into business is because you want to make a difference - wanting to make a difference can be a good reason to go into business, especially insurance, because you can really make a difference in this industry. But are you setting up your business to make a profit while making a difference? Just something to think about.
• An obvious reason why people want to go into business it to make money - when you work for someone else, they often determine your salary. If you are on a commission basis, then you will determine your salary but not all commission positions pay fairly. And not every position can be sales…..it’s a good reason to want to go into business, but it is also important to understand what it costs to get started and the ongoing business expenses of running a business. Money for marketing, taxes, general overhead can be more than you think. The expenses are ok so long as you are generating reven

WHY DO BUSINESSES FAIL?

EP 66 - In this episode, we are talking about the top 10 reaosns businesses fail and what you can do to keep your business from failing.

This episode is one of several episodes about how to get started in the insurance business. I’m not talking about becoming an agent, I’m talking to those of you that are thinking about starting an agency, an insurance company, or an an insuretech business.

These are real issues to consider. It’s geared for those of you who are thinking about getting started or those that have started and are looking for ideas to build a better business.

Every business has similar issues. It doesn’t matter if you are an insurance agency, a contractor or a tech company. If you are running a business you will have similar challenges. So before you open your doors, before you invest in the expansion, give some thought to these concepts and work through them before you take the next plunge! 

So to recap reasons why businesses fail:

• Lack of a marketing plan - Before you open your doors, have a marketing plan - if you take nothing else from this episode, it should be plan, particularly having a marketing plan.
• Missed market shifts - are you entering an area that is shifting? Is this the time to be a flood expert? Is this the time to sell long term care? Is this the time to be a virtual office or to have a brick and mortar location? 
• What is your plan to provide great customer service? If you are a solo preneurer, can you handle 20 calls a day, do your accounting, quoting and marketing? While your clients must come first, it’s essential to have a plan to manage this
• Are you overexpanding before you are ready? How much more successful can you be if you just have one location?
• What do you know about your accounting?  
• What is your management style? Poor management is the fastest way to have high turnover and lose business. Are you a control freak? Are you meak and mild? If so, take a look at your management style. If you don’t have the skillset, takes some classes on how to effectively manage or hire a good manager as soon as you can.
• Location - Can you prospects find you? Does your office feel inviting? Do you need a location?
• Motivation - why do you really want to open your own business? Makesure you are doing it for the right reasons.
• Life’s distractions - do you have support if life gets in your way? What does that look like?
• Lack of planning - I mentioned that you need a marketing plan but you also need a business plan. It doesn’t need to be a 50 page document but you do need a plan. Something to track and measure your success. Would you take a trip without a map? It’s not different with your business.  Remember, FAIL TO PLAN, PLAN TO FAIL. 

Remember, these are all just different reasons why businesses fail. Some of them you can’t predict and some of them with some adjustments you can easily course correct. Having a realistic plan will really help you to see great results. 

I don’t want you to fail, I want you to succeed. But if you don’t have experience running a business, these are concepts you need to think about to increase your chances for success!

 UNTIL NEXT TIME

KEEP CREATING OPPORTUNITIES

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ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. 

She is the co-author of Renewable Referrals and produces two other podcasts, Divorce Exposed and Seniors We Love. 

 Connect with Debbie on LinkedIn, Twitter or Instagram.  

EP 65 - Today’s episode is one of several episodes about how to get started in business.

Some of you might be working for someone now and thinking about going off on your own and some of you might just be entering the industry and doing so as an independent. If you are in either of these two categories or if you are someone that works with agents that are working independently, this episode is for you. 

I started in this industry on the property and casualty side and quickly moved into commercial insurance when I started. Working with my dad, his personal lines clients were all starting their own businesses and they came to him for advice. We basically learned as we went along what we needed to do to help them. Fast forward 30 plus years, I’ve had many years of educating business owners about getting started.

When I first started in sales, I got involved in teaching insurance to a local SCORE chapter. If you aren’t familiar with SCORE, it’s called Service Corp of Retired Executives. It’s a division of SBA, the small business administration which is a wealth of information for business owners, new and experienced. If you aren’t familiar with them, go to sba.gov to learn more.

In this particular SCORE chapter, they did a 3 hour program for new business owners. The first hour was on accounting with a local CPA, the second hour was was legal, taught by a business attorney and the third hour was insurance, taught by yours truly!  The legal was mostly entity structures and contracts.  Since I went last, I always heard the lawyer’s presentation which is how I learned so much!

Fast forward 20 years, I started volunteering with the Maryland Women’s Business Center and taught a class called The ABC’s of Starting a Business. This class was 4 hours and went over why businesses fail, entity structures and then the next steps to get started in business. 

I taught this program for over 5 years. It was my ‘give back’ to the business community. I believe I educated over 500 new business owners in this program. The Women’s Business Center is also a division of SBA, like SCORE, so we have to work within their guidelines.  

Today I’m sharing a segment of that class, on entity structures. I see so many agents asking about them in the different groups I’m in and I want to clarify things about these entity structures that is essential to understand, especially if you are thinking about going the DIY route. I don’t recommend DIYing this important segment of starting your business, but some people just want to save a few dollars and don’t care about the rest. 

Before getting started, my advice to people is to always talk to both your CPA and your attorney. 

• Why? - Your situation is different than mine as is your risk tolerance. I can’t tell you what is right for you because I don’t know your situation. So when you take advice from someone in a FB group or a stranger, you are creating potential problems for yourself!
• Your CPA can guide you better from a tax perspective. Understanding if it makes sense financially to set up one of these entities and getting guidance on how to do it properly from a tax perspective. Make sure your CPA has experience dealing with business owners as well. Some CPAs just do taxes or audits and aren’t up on all the issues relating to business owners.
• You attorney will guide you from a legal perspective. Understanding the risks involved and how to create the proper documents, how to sign your contracts, how to handle multi states. All of these are essential if you are going to be in business for yourself. Make sure your attorney is a business attorney, not a criminal, divorce or personal injury attorney. Just like with the CPA, you want an attorney that focuses on working with business owners because they are usually more on top of the current laws around business owners and doing things properly.

When I started in the business back in the 70’s we basically had 3 different entity structures to choose from. You were a sole proprietor, partnership or corporation. In the mid 80’s the LLC entity structure was beginning to emerge and it really began to pick up speed in the 90’s. Now an LLC common place. There are some variations of different entity structures like a PLLC or an L3C or a B corporation. So, knowing which entity structure is right for you depends. For today, I’m only going to focus on the sole proprietor, LLC and corporation. 

Let’s start with sole proprietor - this is basically you the individual operating as a business owner. It’s your name trading as (T/A) or doing business as (DBA) your insurance agency. My first insurance agency was Debbie DeChambeau t/a The DLD Group. I was a sole proprietor when I set up my first agency in 1990. 

Being a sole proprietor allows you to deduct your business expenses at tax time, but it does not provide any person legal protection.  You’ll get some protection from your general liability or your professional liability policies, but if you lose your case, you could also lose your house and all of your assets, depending on the court ruling.

You’ll want to check with your state, but most states require you to complete a form with the state that you have created your business and you’ll want to get a tax ID number in the name of that business. Once you’ve done those two, then you go to the bank and open a business account and have all of your business income deposited into that account. You can have it deposited into your personal bank account, but that means you are mixing funds which can become an accounting problem, so it’s best to keep them separate and pay yourself when you need to. Again, your accountant can guide you through this better but these are the basics.

If you decide to create a corporation, also known as the letters INC, then you are basically setting up a separate entity. I like to think of it as another person, and that’s the business. When set up and managed correctly, a corporation protects the personal assets of the stockholders, president, VP, etc, which is usually you, the business owner.

When setting up a corporation, you create articles of incorporation, establish bylaws, appoint directors, have a shareholders agreement. These documents must be set up according to the laws of your state and include the right information about your business.

When it comes to taxes, the corporation files it’s own taxes then the stockholders use that information on their individual taxes. This has long been a complaint of corporations, having to do the business return, then do the individual return. It’s where the term, ‘double taxation’ is often used.

You might have heard the term, don’t pierce the corporate veil. This is a test if there is a lawsuit that would protect the stockholders and officers personally. It’s essential that everything is done correctly for that protection to prevail.  If you are in the commercial / business side of insurance industry, this is something you probably know well., Those of you in other areas of insurance, might have heard this in passing but never really understood it. If you are going ot be in business this is the one of the most important pieces you should understand

By everything I’m referring to contracts, agreements, processes, etc. This is where your attorney can fill you in better, but bottom line, if you are going through the expense of setting up a corporation then it’s important to do everything correctly.

Before I talk about a limited liability company, let’s hear from our sponsor:

This episode of the business of  insurance podcast is brought to you by insurancemailbox power.com

Part of being a business owner is implementing systems and processes that can be automated as much as possible. Let’s talk about onboarding new employees or team members, especially since we are talking about entity structures today. 

In an era when a lot of business owners are struggling to find staff, how do you make a new employee feel welcome, make them glad they decided to work with you? Everyone wants to be recognized, so lets talk about how you could go above and beyond to make your employees really glad they are part of your organization.  

Let’s start with day one - what if you have a coffee mug with their name on it, a box with brownies and popcorn to get them through the first week. 

Maybe week 3 you send the employee a water bottle with their name on it and a card letting them know that you are glad to have them on board. 

SMALL THINGS MAKE A BIG DIFFERENCE

EP 64 - Todays episode was inspired by a recent CE class on Ethics. There were many great ideas shared, in a boring ethics class, but the tips I'm sharing today were from the discussion. 

There was actually a list of 50 risk management tips and I've taken 10 of them and offered my thoughts on them from my own experience in the industry.

States didn't always require ethics, it's only been a requirement for about 20 years. When I first entered the busines we didn’t have to take ethics. It’s a good refresher but it can also be boring! 

I’ve titled this episode Risk Management Basics because you might find these ideas fairly basic. The reality is, someone new might not even know these things and a few of them it might take a few years before someone figures them out.

Personally, I think they are essential, so if you are new, figure out how to incorporate them into your business and if you aren’t doing these things as an experienced agent, now might be a good time to start!

1. Maintain All Licenses
2. Understand the value of professional development
3. Don’t promise more than you can deliver
4. Verify Fax Transmissions
5. Use Coverage Checklists
6. Use Standardized proposals
7. Checkall policies and endorsement for accuracy
8. Document coverage rejections
9. Avoid giving recorded statements
10. Fire Bad Clients

CHECK OUT OUR SPONSOR: insurancemailboxpower.com

This is a mailing service I’ve been using for over a year now and I love them. 

I send all of my birthday cards, thank you cards and marketing post cards from this platform. 

My birthday cards are automated. I set it and forget it. The only thing I have to do when I add someone new is to put them into the automation series and the rest is done for me!

I have marketing mailings scheduled for several months. I blocked out two days to set everything up and now I just watch the phone ring!

Check out Insurancemailboxpower.com and see how you can stay top of mind with your clients and referral partners. Tell them Debbie DeChambeau sent you!

ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. 

She is the co-author of Renewable Referrals and produces two other podcasts, Divorce Exposed and Seniors We Love. 

 Connect with Debbie on LinkedIn, Twitter or Instagram.  

THERE IS MORE TO THIS INDUSTRY THAN MAKING MONEY

EP 63 - Like teachers, social workers and doctors and nurses, you have the power to make a difference.

This episode provides three examples of how people have benefited from having a solid insurance policy and an agent that will works for them. It also talks about a few situations where agents need to do a little more to protect the people they serve.

CHECK OUT OUR SPONSOR: insurancemailboxpower.com

This is a mailing service I’ve been using for over a year now and I love them. 

I send all of my birthday cards, thank you cards and marketing post cards from this platform. 

My birthday cards are automated. I set it and forget it. The only thing I have to do when I add someone new is to put them into the automation series and the rest is done for me!

I have marketing mailings scheduled for several months. I blocked out two days to set everything up and now I just watch the phone ring!

Check out Insurancemailboxpower.com and see how you can stay top of mind with your clients and referral partners. Tell them Debbie DeChambeau sent you!

ABOUT THE HOST

This episode of the Business of Insurance podcast is produced and hosted by Debbie DeChambeau, CIC, AAI, CPIA - an entrepreneur, business advisor, insurance professional  and content creator. Her goal is to inspire you to think differently and explore ideas that disrupt the status quo. 

Debbie has an extensive business and marketing background with a focus of helping insurance professionals be more successful. 

She is the co-author of Renewable Referrals and produces two other podcasts, Divorce Exposed and Seniors We Love. 

 Connect with Debbie on LinkedIn, Twitter or Instagram.  

STAYING FOCUSED ON A MONITOR FOR 8 HOURS

EP 62 - This episode is about getting CE credits

As a CIC, we are required to do annual updates and the classes are usually a deep dive into a topic that you won’t find elsewhere. I’ve done updates every year since 1992. In 2012 I did an update and received a certificate that I had been a CIC for 20 years. To my surprise that meant that I only had to do my CIC update every other year now, instead of every year. 

This created CE issues for me because I need 24 hours of CE’s a year in my state and since the CIC updates are only 16 hours, I’ve been scrambling for a few years  to get my 24 in the allotted time. In the past, I just did my update every year and there were my CE’s. I never thought twice about it. Over the past 10 years, I’ve found myself scrambling at the last minute!

Before COVID they were all in person. 

It was great, you could go to Florida for an update, make a vacation out of it, learn something new, meet some new people and it was an experience, not something that was dreaded.

Not everyone likes to travel, or to be out of the office for a few days at a time, so many people do their updates close to home. After doing them for so many years, you get to know a lot of the attendees and it becomes a little like old home week! 

I’ve seen people I worked with in the 80’s, 90’s and even people I coached in my business development groups in these updates. One of my earlier podcast guests, Laura Bianchini, was scheduled shortly after seeing her at a CIC update! Listen to episode 8 Finding Your Niche   for that conversation!

In my area, we had one instructor, Jerry Milton, who was a mainstay. He told a lot of jokes and stories around insurance, keeping  us entertained as we talked about business auto exclusions (I know, boring right) or is it an inland marine or business auto exposure! Sadly we lost Jerry a few years ago just after his retirement, but for anyone who’s older listening to this and has taken a few CIC classes, will remember Jerry. RIP Jerry

Over the years, the CIC society has updated things a little bit, taking them from 2 ½  days to 2 days but always in person.

The classes usually start at 8:00 am and end at 5:15, allowing 10 minute breaks in between and also an extended lunch break because the hotel restaurants often had difficulty feeding 400 people in 60 minutes!.

During the morning session and the afternoon session they send around a form to sign that you are there….if you miss signing the form, you don’t get credit, so everyone is always watching out for the form. You never know when it is going to be passed around.

If you had to get up and take a phone call or use the rest room, you could. If you needed to be out for more than 10 minutes, often you could get an ok from the educational coordinator. Basically if you weren’t there, they didn’t notice it!

Last week with COVID, I did my first virtual CIC update. It’s also about time for me to renew my state license, so I needed to get 24 hours of CE’s. (or so I thought, but I’ll elaborate on that later)

Since CIC updates are only 16 hours, I needed two different classes. I decided to do a basic update on life and health, thinking it would be a refresher but hoping they would talk about a few topics that I’m not as confident about (annuities and LTC). I cleared my calendar, no appointments, nothing to do for 2 days but watch my computer monitor and listen to someone talking.

First, I need to say that I don’t really watch TV, so watching my monitor for 8 hours a day felt a little challenging. When I’m working, I usually have 20 tabs open, looking up something I don’t know or doing some other type of research to get answers to my questions. The thought of sitting at my computer for 8 hours was concerning but I had to get the CE’s.

What caught me by surprise was the pop up quizzes. The three pop up an hour quizzes that apparently if you miss one, you don’t get CE’s. Seriously!

Contrast this with the in person events where you can come and go to the facilities and still get credit but if you miss one pop up quiz you don’t get CE’s. I wasn’t liking that but I really needed my CE’s so I was determined to get through it, plus it was a topic I really wanted to know about.

I made it through the first 4 hours before lunch and I heard the instructor say that several people hadn’t responded to the pop up questions so a lot of people were going to be disappointed when they found out that they weren’t going to get CE’s. 

OMG, how did people miss them……I was (or thought I was) glued to the monitor. I wasn’t doing any work, I wasn’t talking on my phone. I didn’t have any background distractions. Heck, I even held off going to the bathroom until an assigned break.

I did look at some of the handouts as they were referenced, which meant looking at a different monitor. But it was fairly close to the main monitor, so I thought I would see any pop up questions or a change in the screen.  ln my mind, I wasn’t (or so I thought)  I wasn’t one of those people. 

But the instructors comment about missing the quizzes stuck in the back of my mind.

Before I tell you what happened, I wanted to mention our sponsor, insurancemailboxpower.com

This is a mailing service I’ve been using for over a year now and I love them. 

I send all of my birthday cards, thank you cards and marketing post cards from this platform. 

Depending on how many I send, I only have to pay for postage. 

I’m using a plan that has unlimited postcards, both 4x6 and 5.5 x 8.5. All I pay for is the postage and I send a lot. 

I am also in the process of setting up a birthday club. It’s a great way for me to stay in touch with people and have their birthday…..think about it…how many birthday cards do you get as an adult? Probably not that many and you probably remember the people that send you a card!

Check out Insurancemailboxpower.com and see how you can stay top of mind with your clients and referral partners. Tell them Debbie DeChambeau sent you!

Ok, back to my CE rant…..

I made it through the first day but it was hard…..there might have been a moment or two where I started to day dream, after all, how much can you absorb about annuities and long term care in one sitting?

Day 2 was a little better…at least the instructor made reference to the pop up or would pause in his talking so it was a signal to look at the monitor. Day 2 was about Medicare and Medicaid, which is what I do everyday, so listening to him, seeing if I could pick up a few new nuggets was easier. However, it is also easy to daydream when you could be the one teaching the class! 

On Monday I received an email from the National Society that I did not answer all of the pop up questions and therefore I did not earn CE credits! 

What! I was shocked.

I’ve been doing my CIC update for over 20 years (actually 30 this year plus the 5 years it took to earn the CIC  designation) Not once did I not get CE credits when the classes were in person!

How is it that my first virtual update and I don’t get any CE credits?

Ugggggg

I was pissed.

I immediately sent an email back asking which pop up questions I missed.

I think this virtual pop up system is flawed. I get that a lot of people will sign on, go play golf then come back and think they should get credit so they have to do something to  keep you honest. 

But I think there should be a little grace in missing one or two or maybe 3 over the course of 2 eight hour days. 

I feel bad for anyone that had something happen to their stomach and a child needed a glass of water and they missed the pop up question. 

I’m sure I’m not the only one that hasn’t earned their CE’s because they missed a pop up…..but that stinks.