How to start your insuance business

“How to Start Your Insurance Business”
A Path To Financial Freedom
Donald Swanson,
President of Agency Operation Farmers Insurance

Becoming an Entrepreneur Is Less Scary Than You Think
Thank you for your inquiry into “How to Start Your Own Insurance Business” Power point
presentation.
I would like to introduce myself; I am the President of Agency Operations Farmers Insurance
Southern California focusing on Business Development.
Over the past 31 years, I have consistently had great success in bringing on Entrepreneurs like
yourself with different budget levels, workstyles and passions, while transitioning and
solidifying their financial future.
You too can own an insurance agency with little or no money down and earn a steady income
of 150K. You are so close to your financial freedom.
Donald Swanson, President

Donald Swanson,LUTCF
Greater Southern California Farmers Insurance Group President of
Agency Operations & District Managers of Farmers Insurance Group.
Mr. Swanson started his career as a Professional Numismatist when he opened his first
Corporation, Gulf Coast Coins. Then he moved into Wholesale and Retail Jewelry
Manufacturing. He operated in this industry for another 5 years until he settled on
Insurance and Financial Services, where he has remained for 31 years. Currently,
Donald oversees more than 40,000 customers generating $58 Million in revenue.

Why Seek to
Own Your Own
Business?
❏ Be Your Own Boss
❏ Security
❏ Freedom
❏ Retirement
❏ Legacy
❏ Equity
❏ What’s Next?

The Obstacles
For Opening
The Business
1. What is my path to Financial Freedom?
2. How do I get Training & Licensing ?
3. How do I find my Location?
4. How will I Market and generate Sales?
5. How do I Project the Income and Project
Expenses ?
6. Where do I get Funds?
7. Where do I find Staff ?
8. How do I Close or Sell my business?
9. How do I Transition?

Challenges for
Starting an
independent
Insurance
Agency
Starting an independent Property and Casualty Insurance agency
can be daunting.
Where do I start? How will I get licensed, find insurance
companies that I can represent, and open an office?
If these questions are on your mind, you’re getting ready to
embark on the journey of starting an insurance agency.
While you’ll face challenges along the way, there are many
rewards that await you, such as healthy profits, the satisfaction
of working to protect people, residual income, and the ability to
call your own shots.
So…are you ready to begin?

Start and
Grow Your
Business.
Let’s Break
Down the
Process into 4
Key areas.
Grow Grow Your Business
Manage Manage Your Business
Launch Launch Your Business
Plan Plan Your Business

First Things First
Getting Licensed
• Property & Casualty
• Life and health
• Securities 6 and 63
You must be licensed to sell insurance in each state that you plan on soliciting business. All states require
that you take and pass 40 hours of general insurance education courses and up to 12 hours of ethics courses
before you can take their licensing exam. Many of the courses are available as online self study, self-paced
programs. The cost of courses runs from $300-$500 each. Most states require separate licenses for life &
health insurance, and property & casualty insurance If you would like to sell variable annuities or variable
life insurance, you must also complete and pass the required coursework for a Series 6 license.

1. Plan your
Business
Write Your Business Plan
Calculate Your Start Up Costs
Fund Your Business
Brand Your Business

Write Your
Business Plan
Executive summary
Company description
Market analysis
Organization and management
Service or product line
Marketing and sales
Funding request
Financial projections
Appendix

Writing a Business Plan
Not planning is planning to fail. The first thing you need is a
business plan, which is necessary to communicate your values to
potential stakeholders and direct your agency onto the right track.
In the plan, explain what services you’ll be providing and how
your customers will be acquired.
Map out your budget, address the potential risks your business
might face, and describe the business environment you’d like to
create.
Most importantly, introduce the people that will be responsible for
the insurance agency, and what they will do to help execute your
plan.

A sound business plan puts your agency on the right track and
communicates your value to current and potential stakeholders,
such as the carriers who you want to appoint you.
Introduce the people responsible for the agency and executing the
plan. Explain how you'll acquire customers and what products and
services you'll provide.
Identify your target market, suppliers, and competitors.
Describe the advantage your agency has over your competitors.
Analyze your risks. Include an initial budget, cash flow projections,
and a production forecast.
This step is the most important part of building your business.
You’ll use this plan to secure financing and loans, your market,
and choose your business location.

Market
Research
&
Competitive
Advantages
● Use Market Research To Find Customers
● Use Competitive Analysis to Find a Market
Advantage
● Free Small Business Data and Trends

Use Market
Research
to Find
Customers
Demand: Is there a desire for your product or
service?
Market size: How many people would be
interested in your offering?
Economic indicators: What is the income range
and employment rate?
Location: Where do your customers live and How
far will your business reach?
Market saturation: How many similar options are
already available to consumers?
Pricing: What do potential customers pay for these
alternatives?

Use
Competitive
Analysis to
Find a Market
Advantage
Assess the following characteristics of the Competitive
Landscape:
● Market share
● Strengths and weaknesses
● Your window of opportunity to enter the market
● The importance of your target market to your
competitors
● Any barriers that may hinder you as you enter the
market
● Indirect or secondary competitors who may impact
your success
● Market Research And Competitive Analysis

Writing a good Business
Plan is not easy.
We help you write your
business plan
A part of our business plan

Start-Up Costs
• Starting your own independent insurance agency requires start-up capital. The
amount you will need can range from as little as $5,000 to $50,000 or more, depending factors
such as where you're located and how you plan to operate your business.
• The lower end of the capital you need can be between $5,000 and $50,000, with more
expensive insurance firms ranging from $100,000 to $1,000,000.
• You can apply for a business loan, of course, but you will need a good credit history, work
experience, and a good business plan.

Calculate Your Business Startup Costs
Calculate
Calculate your
business
startup costs
before you
launch
Identify
Identify your
startup
expenses
Estimate
Estimate how
much your
expenses will
cost
Add up
Add up your
expenses for a
full financial
picture
Use
Use your
startup cost
calculations to
get startup
funding

Calculate your Business Startup Cost Before
you Launch
• The key to a successful business is preparation. Before your business opens its doors, you’ll have
bills to pay. Understanding your expenses will help you launch successfully.
• Calculating startup costs helps you:
• Estimate profits
• Do a breakeven analysis
• Secure Loan
• Attract investors
• Save money with tax deductions

The Most Important Expenses
Office space
Equipment and
supplies
Communications Utilities
Licenses and
permits
Insurance
Lawyer and
accountant
Inventory
Employee
salaries
Advertising and
marketing
Market research
Printed
marketing
materials
Making a
website

Estimate how
much your
expenses will
cost
Once you have your list of expenses, you can
estimate how much they’ll cost. This process will
be different for each expense you have.
Some expenses will have well-defined costs —
permits and licenses tend to have clear,
published costs. You might have to estimate
other costs that are less certain, like employee
salaries. Look online and talk directly to
mentors, vendors, and service providers to see
what similar companies pay for expenses.

Add up Your Expenses For a Full Financial
Picture
Once you’ve identified your business expenses and how much they’ll
cost, you should organize your expenses into one-time expenses and
monthly expenses.

Estimating Your
Costs and Revenue is not easy.
We Help You Do That!

Buying an Agency?
Build your Agency?
Buying an Office Building?
New to Farmers?
Borrow
Contract Value Loans
Flex Option
Commercial Real Estate
Credit Cards
Protégé Loans
Smart Office Loans
Farmers Insurance
Federal Credit
Union Bank Offers
Loans

2. Launch Your
Business
● Pick Your Business Location
● Choose a business structure
( Sole proprietorship,Partnership,Limited liability
company (LLC),Corporation,Cooperative).
● Brand or Independent
● Apply for license and permit
● Open a Business bank account
● Get Business insurance

Find a Small Professional Office
Retail locations are expensive, and you don’t always need one to become successful.
When starting out, a small professional office may be a good fit.
Keep in mind that most insurance carriers will make office visits to make sure you have a
professional working environment that properly represents their brand.

Choose a Legal Structure
How you structure your business will determine the amount of personal liability you take
on. There are several structures available:
● Sole Proprietorship.
● Partnership.
● Limited Liability Corporation (LLC).
● Corporation.
● S Corporation.

Choose a legal business structure

Branded Agency vs Independent Agency
When considering opening an insurance agency, you’ll have two options: independent or
Branded. Branded Agencies sign a contract to represent and write insurance for top
rated companies (e.g. Farmers Insurance ). Most Career insurance carriers offer multiple
lines of business (e.g. business, personal, life, health, and annuities), making it easier to
write a household’s entire book of business. This offers a wonderful opportunity to build
lasting connections with your clients. They often become like family, as you’re there to
help them through some of their most difficult times.

Independent or Partner with a BRAND
Independent Brand
Industry Analysis
Competitive Analysis
Successful Marketing Systems
Quality Results Reporting
Distribution Support
Customer Relationship Management

Independent or Partner with a BRAND
Independent Brand
Lead Generation Systems
Training and Compliance
Proven Model
Top of Mind Awareness
Corporate Positioning
Quality Products
Equity /Exit Strategy
Internal Funding

3. Manage Your Business
● Manage your finances
Ensure that someone can manage the following:
● Accounts Receivable
● Accounts Payable
● Available Cash
● Bank Reconciliation
● Hire & Manage Staff
● Manage Payroll
● Manage Payroll Taxes
● Buy assets and equipments
● Apply for any and all city permits

Grow Your Business with Farmers
Insurance
Be in business for yourself, but not by yourself

Farmers
offers
Different
Start-up
Points
Retail Acquisition
Protege Associate Agent

Insurance Agency Entry Points
• 1. Retail : Designed for entrepreneurs seeking maximum ROI
• 2. Acquisition : Purchase an established agency based on your investable
assets or income needs
• 3. Grant/ Assigned Agencies : Well qualified candidates could receive
revenue without having to purchase existing location. You must
complete our Protégé or Associate Agent Program.
• 4. Protégé or Associate Agent : The Protégé Agency Producer Program is
designed to provide under-captilaized individuals an opportunity to grow
their skills and business knowledge to become a Farmers agency owner
while working for an existing Farmers agency owner.

DISCOVER A SMARTER
STARTUP
There are business opportunities
and then there are Farmers business
opportunities. If you are an
entrepreneurial minded individual
looking to build your first business
and invest in yourself, becoming a
Farmers® Agency Owner is one of
the most exciting startup investment
you can make.
With over 90 years of experience
and best-in-class training, Farmers
has the knowledge to help you start
up an independent business you can
proudly call your own
THE PROCESS
● Capital Requirement $50,000 (waived on Protégé)
● Background Check
● Satisfactory results of background check
● Licensing and Training
● Property, Casualty, Life and Health licenses prior to agent
appointment
● Training program through the University of Farmers®
● Branded Office Location
● Office location at time of full-time appointment
● Fully equipped and compliant with Farmers® brand standards
within four months of full-time appointment
● Agency Staff
● Minimum of one licensed and appointed agency staff member
at full-time appointment

THE BENEFITS
Economic Interest in Your Agency, Contract Value according to the
terms of the appointment agreement
Sale of Service and Commission Rights Opportunity to sell service
and commission rights
Agency Start-Up Bonus $10,000 bonus for establishment of branded
office location within a specified time period after appointment
Monthly Marketing Bonus $500 per month if bonus qualification
goals are met Monthly Bonus Based on Net NB Commissions
Annual Bonus Based on Net New Business Commissions
Bonuses based on Life and Commercial commissions subject to
specified maximum amounts

Retail / Start-Up Opportunity Requirement
➢ Provide documentation of $50,000 Liquidity
➢ Minimum of one staff
➢ Secure Office Location / Branded
➢ Completion of Training and Onboarding

Retail Financial
Support
Opportunities
● Exterior Branding Bonus :Up to $6,000
● Signing Bonus : $7,500 bonus
● Monthly Marketing Bonus : $500 per
months
● Annual Bonus based on Net New
Business Commission
● Monthly Bonus Based on Net New
Business Commission
● Bonus Based on Reserve or Associate
program Net NB Commissions

● More retail data money bonus marketing etc

Acquisition Opportunity Requirement
➢ Provide documentation of $50,000 Liquidity
➢ Minimum of one staff member at contract signing

PROTÉGÉ
The Protégé Agency Producer Program is designed to provide under-capitalized individuals
an opportunity to grow their skills and business knowledge to become a Farmers agency
owner while working for an existing Farmers agency owner.
As a Protégé you will learn from an experienced industry professional as well as have access
to the award-winning University of Farmers training program that is designed to help
enhance your knowledge and introduce you to tools that may help you grow as business
owners should you one day own your own Farmers agency.
Opportunity For Agency Ownership
Grant/Assigned Agencies
The Protégé Agency Producer will have 12 months to complete all eligibility requirements.
When a protégé meets all applicable legibility requirements, they will have the opportunity
to become an agency owner. The investable asset requirements at Farmers Insurance will be
waived. Well qualified candidates could receive revenue without having to purchase an
agency. This could be your opportunity to continue a Legacy!

Associate Agent
• The Associate Agent Program is designed to provide individuals an opportunity to grow their
skills and business knowledge to become a Farmers agency owner while being mentored by
Mr. Swanson and the district team.
• As an Associate Agent, you will learn from an experienced industry professional as well as
have access to the award-winning University of Farmers training program that is designed to
help enhance your knowledge and introduce you to tools that may help you grow as business
owners should you one day own your own Farmers agency.
• Opportunity For Agency Ownership
• Grant/Assigned Agencies
• The Associate agent will have 24 months to complete all eligibility requirements. When an
associate agent meets all applicable legibility requirements, they will have the opportunity to
become an agency owner. The investable asset requirements will be waived.
• Well qualified candidates could receive revenue without having to purchase an agency. This
could be your opportunity to continue a Legacy!

Seed Opportunity Requirement
➢ Completion of Protégé or Associate Agent Program
➢ Minimum of one staff member at contract signing

Different
Pathways
From
Protégé
1. SEED: Grant/ Assigned Agencies
Well qualified candidates could receive revenue
without having to purchase existing location
2. Protégé Retail Opportunity ( PRO)
Well qualified candidates can start from the scratch
and have their own agency in any location they
would like to have. The PRO Opportunity allows the
Protégé candidate receive an assignment of service
and commissions rights to otherwise customers at
the time of Retail appointment.
To be eligible for assignment through the Protégé
Opportunity, can receive up to 1,250 Revenue
Generating customer accounts.

Pre-Career Interview Pre-Approval Agency owner development Training Due Date Contracting
2/1/2020 2/15/2020 3/15/20 4/1/20
Background check Complete Training Agency Appointment
Pass Exams Class Training Acquisition
P&C Online Training Seed
L&H Field Training Retail
50k Liquid Assets* Farmers Support you to find Staff
Business Plan & Pro-Forma

Close or Sell My Business
Economic Contract Value
Your Agency Builds Equity — An added benefit is the ability to develop
substantial monetary equity, known as Contract Value. Contract Value is where
Farmers Insurance will purchase back your renewable income at a vested
multiple, determined by our Agent Appointment Agreement.

How Do I Get Started?
1. Register for Our Upcoming workshop/ Individual Consultation with Donald
Swanson AT https://calendly.com/district65sd/consultation-call
2. Determine Timeline and path that best suits you
3.Start Onboarding Process
4. Execute a plan and timeline to start your Farmers Insurance agency

Thank YOU
• Donald Swanson, Insurance Agency, Inc.
• President of Agency Operation
• 1011 Camino Del Rio South, Suit 100
• San Diego, CA 92108
•
• Tel. 619.296.3276
• 6192430222
• www.farmersinsurance.careers

How to start your insuance business

More Related Content

What's hot (20)

Similar to How to start your insuance business (20)

More from Farmers Insurance (19)

Recently uploaded (20)

How to start your insuance business