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Agent: What’s Your Plan This Year?

“What do you want to be when you grow up?” I used to get that question all the time. I would say I wanted to be a doctor, a lawyer, a successful businessman. I always had an answer, but I never had a plan. I would have benefited a lot from having the person follow up and ask me, “How are you going to get there?”

“How did you get into the insurance industry?” If you ask 10 insurance agents that question, nine times you get the same answer, “I just fell into it. I had no plan to be in the insurance business.”

I’ve spent most of my insurance career working and dealing with agents, and, while they have action items to grow their businesses, almost all of them don’t have a formal planning process. Instead, they react to issues the day they are confronted by them.

It’s natural to wait and react. But the best organizations in any industry always have a plan. They don’t react; they act with discipline and focus.

This article can provide you with a road map for designing your current-year business plan and your long-term plan.

A plan has to be something basic that you can live by during the year — not a 25-page document that gets put in a desk drawer and forgotten. Instead, it’s a short document that sets forth the path you want to take for your agency in a given year. Plans change. They always do, based on what actually happens. But having a plan allows you to be in control of your business.

Is it too late to have a plan this year? No. There is still plenty of time. Here’s a model I’ve used to develop several successful business plans.

1.         Start with an assessment of your business year-to-date. How’s your year going compared with last year? Is production up? How about profitability? Spend time analyzing your book of business and understand the difference between your results for the year-to-date period this year vs. last year. This shouldn’t take too much time.

2.         Identify your gaps. Profitability might be up but new business production down. Why is new production down? Is it taking more leads to generate a sale? Is a new competitor pulling business away from your agency? Understand your situation. Focus on the big issues.  Nothing is ever going to be perfect, including your business.

3.         Develop solutions. This is the toughest part of any planning exercise. It’s usually easy to identify a problem. It takes a lot more thought to come up with a solution, especially one that requires you to change the way you conduct your business. Try to identify little changes you can make. Pick a new lead source and experiment with it first. If it works, then incorporate it into your day-to-day operations. Implement several small changes at once. I call them “initiatives.” They are more like experiments. If they don’t work perfectly, that’s okay, because can always learn something new about your business that you can apply to your next initiative.

Let’s say new business production has fallen. It is taking your agency more leads to close a sale. One way to increase production is to increase the number of leads. That will probably increase costs because you have to purchase more leads or need additional staff to generate new leads. That will hurt your agency’s profitability.

Yet, that’s what most people do. I call it the “Do What You’re Doing, Just Do It Better” strategy. It typically fails.

Instead, focus on new tactics. Change the way you are conducting your business. Experiment, experiment, experiment! Try different initiatives. You will typically know if they are working fairly quickly. Don’t be afraid to stop doing something if it is not working. Move to the next idea and continue to iterate.

In our example, a new initiative might be to target a specific group of potential customers based on criteria you develop that makes them attractive customers. Another initiative might be to develop an affinity group that you can then target for new business. If the initiative works, you can incorporate it into your business. If it doesn’t — and you will typically know within 30 to 60 days — move on.

4.         Create check points. You can’t expect what you don’t inspect. Track your agency’s results on a daily, weekly and monthly basis. Meet with your staff consistently. You want to create a culture of accountability.

5.         Be transparent. You need to share your plan with everyone at your agency. Make sure your team is incorporating the overall plan into their day-to-day duties. Have you properly communicated and delegated specific initiatives to your staff? Is your customer service rep up-selling? Is your receptionist setting appointments when the office is quiet? If people don’t know what you are trying to do, they will just do what they think you want them to do.

6.         Stay focused. Plans fail when people lose focus. Your job as the leader of the organization is to keep the organization on the right path. A well-defined plan provides the framework to make sure you are staying the course. It enables you to make sure everyone is doing what needs to be done.

Nothing lasts forever. Yet it is surprising how few agency owners have a long-term plan for their business. Most agencies die a slow death, keeping the agency owner a prisoner of her own business as the staff leaves and she tries to hold on to renewal commissions as long as possible.

I attribute this common situation to the fact that most agency owners don’t have a long-term plan for their agency and for their personal life. In the early years of an agency, everything is focused on producing new business. As the agency matures, the service requirements of operating a P&C agency create daily challenges that keep the agency owner’s attention occupied. It’s easy to procrastinate until it’s too late.

Stop reading this article. Grab a pen and paper and answer the following question: How do you want to leave your business? As a thriving organization that survives you? A business you can pass on to your children? To your junior partners? A business that you can sell? What’s your vision for the future of your agency?

Spend some time today and put together your plan for the long-term future of your agency. Knowing where you want to be tomorrow, today, will make it more likely you will end up where you want to be.