Building a Business Plan
Laying a Solid Foundation | Lesson 7

Financial Management

We can’t write a business plan without considering finances.

As you’re strategizing this part of your plan, keep in mind that the way a company’s finances are managed can be the difference between success and failure.

No pressure, right?

In your business plan, you’ll want to provide details.

Specifically, how you plan to grow your business and become profitable. You’ll also want to provide an estimate of how long you believe it will take you to become self-sufficient and profitable.

Starting to sell insurance may not seem like it will be a high-cost endeavor at first.

The pricing points on licenses, testing and appointment fees, those costs are manageable.

Insurance carriers provide supplies or means to submit online enrollments at no cost.

Getting started with a few thousand dollars is possible, but keep in mind, just because you have your insurance licenses and are appointed with the top carriers in your market, that doesn’t mean that prospective clients will be lining up to meet with you.

You will definitely need to invest time, energy, and most importantly, money into marketing and prospecting.

That’s why we went into such detail in the previous lessons. And we’ve covered prospecting in another Knight School module that we’ll have the link to in the last lesson of this module.

We mentioned earlier that your business plan can have an appendix. That’s where you’ll include the full details of your expected overhead costs including your startup and operating costs.

When you provide a summary of your expected costs in your business plan, you can reference the info in the appendix.

Kind of how we just mentioned our references section that’s at the end of every Knight School module.

But back to start up costs.

These expenses include any one-time or long-term purchases, like significant equipment or office supplies.

Getting into insurance doesn’t have a lot of major startup costs, other than possibly investing in a computer, laptop, tablet, or printer. Or you may already have those things.

It could also include office costs, whether that office will be leased or in your home.

There’s rent, signage, permits, insurance, renovations, grand opening advertisements, and promotional marketing expenses.

Don’t forget to include initial consultation fees with attorneys, accountants, or other professionals that assist you in building your business.

Operating costs should demonstrate the regular monthly costs that your business will incur.

Initially, this should include your living expenses for the first 6 to 12 months.

Insurance doesn’t always have immediate payouts.

Most agents that focus on Medicare Advantage Part D sales during AEP do not receive commissions until, at the earliest, January of the next calendar year.

Plan ahead and plan accordingly!

Make sure you include the amount to meet your basic needs for the period from when you start until the first commission payout for a full AEP MAPD selling season.

Operating expenses will also include your new business expenses, like rent, utilities, and insurance, if applicable.

Loan payments, office supplies, travel, car lease or loan payments, legal, accounting, advertising, repairs, maintenance, fuel, cell phone hardware and plan expenses, even internet expenses.

Thinking about these costs ahead of time, and including them in your business plan, will help better prepare you for the future of your business.

So, what comes next? Head on over to the next lesson to find out!

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