How much investment does it take?

[SunnyDayForest]

I'm wondering…in order to get into the insurance business, how much of an investment does it take? I have seen one thread below describing some pretty extensive sacrifices (one year without salary and a debt of 40k). Is this typical? Disregarding normal living expenses, how much investment or debt/loss would it take for the insurance business portion and for how long? Is it normal to least break even (after paying for insurance, tests, canceled policies, and leads) early on in the process? I realize there is a big learning curve and it requires time, but just wondering about what amount of cushion (for insurance business alone) should be prepared ahead of time? I’m not really keen on diving in without working some simple math first.

 

[Tahoe Ray]

I'm wondering…in order to get into the insurance business, how much of an investment does it take? I have seen one thread below describing some pretty extensive sacrifices (one year without salary and a debt of 40k). Is this typical? Disregarding normal living expenses, how much investment or debt/loss would it take for the insurance business portion and for how long? Is it normal to least break even (after paying for insurance, tests, canceled policies, and leads) early on in the process? I realize there is a big learning curve and it requires time, but just wondering about what amount of cushion (for insurance business alone) should be prepared ahead of time? I’m not really keen on diving in without working some simple math first.

The whole "disregarding living expenses" part is where it goes sideways for most. If you have money to pay for all of that stuff for 6 months to a year you'll probably be just fine.

FINE assumes that:

1) you get paid a fair commission
2) you know how to source leads, with either your time or money, effectively.
3) you put in some serious work
4) you get someone to help you/train you/direct you who has actually written business in the business line you've chosen
5) you don't get paralyzed by a lot of the minutiae in our business. You need to know your product and who it helps best, but much of the other stuff is noise that you can learn on the job.

What insurance lines are you focusing on? Because ramp-up time (when you're paying your own bills) and business setup costs vary widely based on that.

 

[SunnyDayForest]

Tahoe Ray Comment 1: you get paid a fair commission
>>yes, I have come to understand a fair commission is important & the need for good training

Tahoe Ray Comment 2: you know how to source leads, with either your time or money, effectively.
>>I would work with an agency that I purchase leads from

Tahoe Ray Q: What insurance lines are you focusing on?
>>> I haven’t yet focused on anything in particular. Which insurance(s) is best to sell in the beginning?


So, from your response, the biggest cost for 6 months to a year seems to be living costs? I will work a couple days a week in order to help pay (not 100%) for living costs.

 

[marindependent]

Which insurance(s) is best to sell in the beginning?

In Florida, not P&C.

@Tahoe Ray - did a great great job with his answer. I would also add that the ramp up time really in part depends on where you are starting from. Have insurance experience? Have sales experience? Have business ownership experience?

Additionally ramp up time can be different by lines of business.

Best of Luck!

 

[SunnyDayForest]

Thank you for your time and answers!

 

[adjusterjack]

just wondering about what amount of cushion (for insurance business alone) should be prepared ahead of time?

That's easy.

Whatever amount of money you lived on last year, have at least that amount set aside to live on for a year.

Hope for the best.
Plan for the worst.

 

[Markthebroker]

For what it's worth, I'm commercial p&c, which probably has the longest ramp up time. It took about 7 years until I was able to pay my bills, which from talking with other commercial p&c agents, sounds typical. It is a journey that very few people are capable of emotionally or financially. And, keep in mind, I was one of the few successful ones.

I made about $8,500 my first year, about $16,000 my second year.

Now for the good news.

Now that I have a book built up and a loyal clientele, I rarely work more than 20 hours a week, and have a full time income, and spend most of my time screwing off.

YMMV.

 

[SunnyDayForest]

It took about 7 years

7 is a surprising number (understatement). Could it be that P&C is a very narrow insurance niche to get into? Is your income now heavily comprised of residual income from previous sales (I'm not sure how P&C works)? Did you work from home or have to pay a lot of overhead for the office during that time?

 

[Markthebroker]

7 is a surprising number (understatement). Could it be that P&C is a very narrow insurance niche to get into? Is your income now heavily comprised of residual income from previous sales (I'm not sure how P&C works)? Did you work from home or have to pay a lot of overhead for the office during that time?

It's just that commercial P&C is a lot of work to build, and it's very slow. But once it's built up, there's lots of residuals.

 

[Tahoe Ray]

It's just that commercial P&C is a lot of work to build, and it's very slow. But once it's built up, there's lots of residuals.

A lot of the residual based businesses are like that...

You really need a stockpile of cash to live on or have another line supporting you while you get going.