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1.0 Executive Summary
The purpose of this business plan is to showcase the continued development and expansion of an insurance brokerage based in Doylestown, Pennsylvania. Insurance Broker, LLC (“the Company”) was founded by Rachel Hogan. The business will not be affiliated with any specific carrier, which will allow the business to provide a wide spectrum of insurance products that are competitively priced. At this time, the Company is seeking a $125,000 line of credit in order to establish operations.
1.1 The Services
The business, through multiple major carriers, will be able to provide its customers with personal and business lines including health insurance, automotive policies, business policies, homeowners policies, and supplemental insurance products. The business will earn substantial fees from the ongoing placement of policies.
The Company will also generate highly recurring streams of revenue from the ongoing renewal fees that will be produced on a yearly basis. Over the next five years, this will be a major revenue center for the Company.
The third section of this document will further discuss the operations of Insurance Broker.
1.2 Financing
A $125,000 line of credit is needed to launch operations. The Founder has opted to receive a line of credit rather than a business loan so that the funding can be drawn down on an as needed basis. This business plan assumes that the Company will receive a 10 year commitment on the credit facility with an 8% interest rate applied to the drawn down balance. The funding will be primarily used for the following:
• Location development in Doylestown
• Furniture, fixtures, and equipment
• Initial marketing
As the Company expands its book of business, Management may seek to increase the size of its credit line to further fuel the growth of Insurance Broker. Additional capital is not expected to be necessary within the next three years of operation.
1.3 Mission Statement
The Company’s mission is to provide its clients with cost effective insurance products for all of their risk management needs.
1.4 Management Team
Rachel Hogan is a licensed insurance producer that has more than 15 years of industry experience.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will continue to hire staff agents that will further increase the business’ operations. The business, after year three, may acquire existing independent insurance brokerages and agencies that can be integrated into the Company’s ecosystem.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Insurance Broker, LLC. The business is registered as a limited liability company in the State of Pennsylvania.
2.2 Required Funds
The business will allocate the funding via the line of credit as follows:
2.3 Management and Investor Equity
Rachel Hogan will retain a 100% ownership interest in the business.
2.4 Exit Strategy
In the event that Management wishes to retire or relocate, the Owner will initially try to coordinate the sale of the business to staff agents. This will make the transition process very easy since they have an understanding of the business. In this event, the proper legal counsel and CPA will be hired to properly structure the sale of the business.
3.0 Services
As discussed in the executive summary, Insurance Broker will operate in an independent capacity so that individuals and businesses can receive quotes among numerous carriers. This will be a major differentiating factor for the business given that competitive pricing can be offered on all policies offered. The types of policies that individuals and companies can source through the business include:
• Auomotive
• Business Liability
• General Liability (business)
• Health
• Life (term and whole)
• Long Term Care
• RV/Boat
It should be noted that the recurring revenue from renewals will contribute to the ongoing stability and profitability of the business. The business, on each policy, will typically receive a renewal fee of 5% to 8% of the yearly premium. Over time, these recurring income streams will cover a substantial portion of the operating costs of Insurance Broker.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
At this time, the economic outlook is positive. Interest rates and the rate of inflation have begun to abate. The Federal Reserve and global central banks have taken appropriate measures to ensure that the economic climate remains positive in the coming years. The business will benefit from interest rates declining as larger items will be purchased with less expensive capital.
Any issues with the economy will only have a modest impact on Insurance Broker, LLC’s ability to generate revenue. The business, once its book is established, will generate highly recurring income from renewals. The business will also have controllable general operating costs. This will ensure the continued profitability of the business over the first three years.
4.2 Industry Analysis
There are currently 380,000 insurance brokerages and agencies throughout the United State. These businesses aggregately produce $182 billion of revenue. This is a highly established industry, and its future growth rate will be similar to that of the economy as a whole.
One of the major trends within this industry is to use multiple forms of online marketing and advertising in order to acquire leads for insurance services. In the next chapter of this document, the Company’s marketing operations will be outlined.
4.3 Customer Profile
Among individuals that will use the Company’s services, the following profile will be used in marketing:
• Lives within 15 miles of the Company’s Doylestown location
• Annual household income of $75,000 to $250,000
• Is primarily seeking life, automotive, and homeowners insurance
For the Company’s business clients, the following profile is noted:
• Annual revenues of $500,000 to $5 million+
• Requires general liability, corporate health insurance, D&O insurance, or errors/omissions insurance
• Operates within 25 miles of Insurance Broker
4.4 Competition
The Company will face ongoing competition not only from independent brokerages but also among agencies that are affiliated with a specific carrier. One of the ways that the Company will maintain a major differentiating factor is that the business will be able to provide quotes among numerous major carriers throughout the United States. Additionally, the business will offer both personal and business insurance lines which will be a major draw among small business owners in the greater Doylestown market area.
5.0 Marketing Plan
Insurance Broker will implement a wide range of marketing strategies that will draw both individuals and businesses seeking insurance policies. The business will foster ongoing relationships with area professionals that will provide ongoing referrals to the business as well.
5.1 Marketing Objectives
• Maintain ongoing relationships with accountants, attorneys, and real estate professionals in the Doylestown market.
• Maintain an expansive online presence that uses both social media and search engine optimization to drive web traffic.
• Support regional organizations that will further increase the brand name recognition of the business.
5.2 Marketing Strategies
Foremost, the Company will showcase the insurance brokering services offered by the business to professionals including accountants, CPAs, enrolled agents, attorneys, and real estate agents/brokers within Doylestown. As these individuals frequently work with small business owners, Management sees a substantial opportunity to receive ongoing referrals among clients that have ongoing insurance needs. Over time, these relationships will be an invaluable source of revenue for the business.
Insurance Broker, LLC will maintain an expansive web presence that includes a proprietary website as well as a presence on all social media platforms. The business will have the website undergo search engine optimization specific for the Doylestown market area. It will take three to eight months for this type of marketing to become full effective. The business will maintain pages on Facebook, Instagram, and LinkedIn. On LinkedIn, the business will use targeted advertisements among people that list their professional as a business owner within Doylestown.
Management and the Company will become members of area Chambers of Commerce as well as a wide range of professional organizations. The business will provide ongoing capital support for charitable and community organization as well. This will further create a sense of community for Insurance Broker, LLC among residents and businesses in the market.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Insurance Broker, LLC will acquire a $125,000 line of credit that features a 10 year commitment.
• Management will contribute $25,000 towards the venture.
7.2 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. This is due to the fact that people and businesses will continue to require multiple forms of insurance in order to have proper risk management. The risks of this business will be reduced once the business begins to receive recurring income from renewals.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
