How Much of Your Own Cash Did You Use when Starting Your First Book of Business?

[new2sales]

Greetings Insurance pros!

Generally speaking how much of your own cash did you use when starting your new book of business. I'm seeing that generating a new business is going to take some initial capital (shocker). Paying for networking group dues, lead list purchasing, sponsorship cost for contests to generate leads (fish bowls, raffles, etc) looks like it can be costly. So, can anyone shed a little light on some initial business building costs you have faced in the first year of your business building?


Thanks in advance for the help!

 

[DHK]

What kind of insurance are you selling? If we know this, your responses will be more accurate and more specific to your situation.

 

[axeman462]

I work the Medicare market, so my initial investment might be different than others.

I live in Florida, so getting my license cost me something like $100. (This includes buying and online education coarse, finger printing etc.. (I honestly cant remember everything I had to do to get my license anymore))

I don't have an office, and I don't have any overhead expenses. I literally work out of the front bedroom in my house. I turn my head to the right, and I can see my front yard, and the street I live on.

My first year in the business was with Bankers Life and Casualty. That first year I estimate I probably invested around $2,000-$2,500 of my own money (not including gas) to get my business on its feet.

That business never did get on its feet.

After one year at Bankers, I left and went indy.

That first year, I was completely broke. I was spending more money than what coming in when I was at Bankers. I seem to remember buying one or two FE mailers via Monumental Life that year and a couple of T65 cold calling lists. If I spent $1,000 that first year on marketing, that's a high estimate. Aside from the one or two FE mailers I did, all my marketing was done via cold calling and door knocking that first year. But it worked.

Today I don't do a whole lot of cold calling. Currently I spend somewhere in the range of $600-$800/mo on marketing. And I plan to increase that quite a bit next year. I have big goals for next year, and its going to take more money.

Financially speaking, insurance agents don't take a big initial investment (unless you include the money you need to live off of an investment too). The big initial investment comes from time. My first year, I must have worked 80 hours a week, the entire year, in order to build the foundation that allowed me to start using marketing dollars, instead of marketing time.

For most agents, time is the big initial investment, not money.

But if you have money, throw a few hundred a month at mailers and get going.

 

[new2sales]

Thanks for the responses.

Guru:
I am currently in NJ selling personal lines of insurance (auto, home, and life)

Axeman:
Thanks for the background info. I actually haven't considered mailers but I'll def begin some research in that area of marketing.

 

[sman]

Thanks for the responses.

Guru:
I am currently in NJ selling personal lines of insurance (auto, home, and life)

Axeman:
Thanks for the background info. I actually haven't considered mailers but I'll def begin some research in that area of marketing.

P&C is a different animal as it pertains to startup costs. Most P&C agents need office space so you have all the costs associated with an office (rent, telephone, copier, etc.). I've heard that E&O is more expensive for P&C agents compared to just a life agent (not sure how it compares with a securities licensed rep).

You might be better served taking this question to the P&C section of the forum.

 

[new2sales]

Thanks for the insight, i'll check out the P&C forum.

 

[shawnmwalker]

New 2 Sales:

it depends on where you are and how you do it.

Group, no group, Captive , Indy,

 

[Dweezil]

I live in Florida, so getting my license cost me something like $100. (This includes buying and online education coarse, finger printing etc.. (I honestly cant remember everything I had to do to get my license anymore))

It must have been a while back to have it all done for $100. I'm taking the pre-licensing now and by the time I have my license it will run about $300 in Florida.