As the manager and/or owner of your agency, you know that every task you undertake on a daily basis should be one step closer to the completion of an overall agency plan. Why plan, you ask?
It is no secret that there is a very strong consolidation movement going on within our industry. Five years ago there were 45,000 independent agencies. Today there are estimated to be somewhere between 33,000 and 34,000. By the year 2013, the experts are predicting that there will be 25,000. This fact alone suggests that there needs to be a tremendous amount of planning going on within the ranks of the independent agency system.
The fact is, however, that only 10% of us have a fully developed written plan that each member of the agency staff is aware of and following. That leaves 90% of us in a critical time in the insurance industry without the necessary planning tool to help us get to where we want and need to be.
The most frequent excuse we hear for not planning is that an agent has tried planning in the past only to have the circumstances change so drastically that the plan becomes meaningless. All the more reason to plan!
It is better to have a plan and have to change it than to have no plan at all. If you were taking a trip along a planned route and came to a detour for a bridge out, you would make changes in your route, but your goals, presumably, would still be the same. The same analogy holds true for your agency as well.
As a matter of fact, the reasons those agents give for not planning (constantly changing conditions in the insurance industry) are the main reasons why planning is so important. We must plan for the effects of competition; for increasing soft market conditions; for economic changes in our area (for example: the gasoline crisis in facing everyone today, etc.); and, more importantly, for the continuation of our agencies, whether that be internal perpetuation, sale of the agency to a third party or a merger/cluster for strength.
Finally, we must have a plan for profit because of the ever-increasing expense of automation and everyday overhead expenses as group health, training and education. Actually, the reasons to plan are as endless as each agency's individual needs.
No, you do not have to do all the planning yourself. Your entire agency staff should be encouraged to have all of the input they want. As long as the plan is "your plan" they will help you with it as much or as little as they see it affects each of them personally.
If, on the other hand, they see the plan as "my plan," you can expect a much higher level of cooperation and concern. We like to involve everyone on down to the part-time file clerk. It is surprising how many good ideas come from the people who actually do the jobs.
We have to warn you, however, to be prepared to have the air let out of your tires! If your people give you honest feedback, they will develop ideas that will surprise you. That's okay. The important thing is to get them started on the road of planning. The sign of a truly professional owner/manager is the ability to listen, refine and implement.
The final planning step is to pull your key people together and put in writing all the input they have developed. Organize it into a plan that can be implemented by using an Action Plan form.
The best Action Plan we can think of defines each task, assigns it to an implementer, gives it priority and sets a date for the start and finish of the task.
When you have completed your plan, you have a right to feel pleased that you have accomplished a tough task. You are now part of the 10% of agencies with a plan to succeed.
But your real work actually begins now. The key to making the plan work is your own personal follows through. The first time you say, "Never mind, I'll do that" you've undermined your plan. What you wanted will get done, but only if you make it an A+ priority. The reward to your effort is planned growth, profit, and being a survivor agency into the future.
One of the major planning benefits can best be summed up by a summer 2007 agents’ seminar I attended that featured a panel of insurance company representatives. Their conclusion was that agents who have a written business plan would almost always receive an agency appointment ahead of agencies, which have failed to plan. In fact, the company representatives concluded that agency planning and perpetuation planning were the two most important considerations they look for in an agency appointment once they are satisfied that they can get the premium volume commitment.
A good agency plan indicates to an insurance company that the agency can produce the premium volume it has committed to and the perpetuation plan that protects the agency. This means that the insurance company's book of business is protected as well.