To start an insurance agency you will need to decide on going independent or being a captive agency. Some of the best known captives include Farmers Houston business loans, Nationwide and Allstate. Captives sell exclusively, or mostly, one model of insurance. There are advantages and drawbacks of each so it is advisable to
investigate both. Many states require an insurance company to sponsor your licence application, so selecting a company is a good place to start. A property and casualty licence is generally the minimum to start and allows you to sell auto and homeowners type policies (Laws vary by state). It is advisable to get additional the necessary licenses such as accident and health, and possibly investment type the necessary licenses (For example Series 6 and 63).
For either choice many agents work in your free time first to get licensing, training, experience, and begin developing a client base. If you have your own business your income will probably be straight commission. Normally you are paid for the sale of each policy and again every time of rebirth. In my area 20 to 30 policies per month is considered good for new agents. This might pay you $2, 000 to $3, 000 depending on the type of sales. After you pay your expenses the income can be quite small when starting. As your book of business increases your rebirth income will greatly increase your income.
An option to building an agency from scratch is to buy a pre-existing agency. Typically you will pay 2 or more times annual earnings. For example, if an agency has 1, 000 policies that earn $100, 000 annually in renewals, you will probably pay $200, 000 or more. It is possible to finance an agencies purchase. This will generally require 10% or more for a downpayment. SBA is the most common lender for this kind of loan. My company, Tx Capital Mortgage 281-537-7800, can help with business financing for Tx residents. (I have found that the mortgage business is a good compliment to the insurance business. )
Obviously you will need a many more information to start an agency. I would recommend spending a lot of time researching the business before jumping in. Read some books about the business. The bigger companies have region offices where they can quickly go over employment with them. The agent you get your insurance from may be happy to share his experience with you. May lot of information available online.
Insurance is a great business but don’t underrate the actual! After beginning with Farmers full time, the first 1/2 year I lost 50K (much of this was start up expence), the next year I lost 20K, and this year I will make some profit. Some agents will do better or worse but this could give you some idea.