Succeeding in today’s business climate requires a fair amount of luck. However, making use of some of the many available business tools also increases the chance of success. Many such tools require just a pen, some paper and some thought, yet many small businesses never make use of them. From organizing a business’s message to developing a brand and creating a marketing strategy, for almost any small business, documents such as those listed below may hold the key to success.
The SWOT Analysis
Strategic business planning benefits greatly from analyzing Strengths, Weaknesses, Opportunities and Threats. While it may sound a bit sinister, SWOT is a highly useful tool that bPlans portrays as “…a lot more fun than it sounds…” and which “…forces you to think about your business in a whole new way.” Use a SWOT analysis when starting an agency or to adjust an existing insurance agent strategy.
An insurance agency SWOT analysis should include looking at the business from many angles. According to the Houston Chronicle, strengths should consider the variety of offered insurance products, the breadth of the client base and any community goodwill. It is all about what makes an agency strong. Under weaknesses, a SWOT analysis should review the not-so-good aspects of the agency, anything from not using technology to using ineffective accounting, marketing and operations processes to focusing exclusively on existing clients while not cultivating new ones.
Opportunities could cover selling supplemental products, branching out into other services and nurturing relationships with other businesses such as accounting and law firms. Acknowledging threats is also important. Common threats include local competition, increasing insurance rates and changing health care laws.
The Executive Summary
A good executive summary provides a “snapshot” of an agency, according to InsuranceNoodle.com. It should discuss the agency’s plans to address market opportunities as well as its financial data. Established agencies may include their mission statement and growth highlights, while startups should focus on motivations behind starting a new agency as well as how prior experience will make it a success. InsuranceNoodle points out that in many cases, “…the executive summary is the first impression investors have of your business,” and so it is very important to create one that captures readers’ attention.
The Business Plan
Entrepreneur.com describes the business plan as “…a tool for understanding how your business is put together...to monitor progress, hold yourself accountable and control the business's fate.” Nevertheless, according to a Washington State University infographic, 27 percent of small businesses never had a business plan. Creating a business plan requires viewing all aspects of the business at once, from the value proposition through financial plans and into operations plans. Doing so makes apparent the connections between needs and projections that might otherwise be missed, according to Entrepreneur.com. This, in turn, allows for proper allotment of resources to meet needs.
Sometimes a plan reveals that things work perfectly. More often, it serves as a tool for monitoring progress and discerning possible areas for improvement. For people starting an insurance agency, a business plan is necessary for bringing in investors as well as the right talent by clearly stating the company goals. Just keep in mind that the process of creating a great business plan may take several weeks, and that once finished, it should address the need the business fulfills as well as the unique qualities that allow it to fulfill this need.
The Mission Statement
Think “knowing” what your business is all about is enough? According to PsychologyToday, organizations with clearly defined vision and mission statements aligned with a strategic plan outperform organizations without them. When crafting an insurance agent mission statement define the present state of a business while answering these three questions regarding the organization:
What does your organization do?
Who is the business targeting?
How does the company do what it does?
A mission statement must function as a stated guide of company purpose that your insurance agency follows while working toward business goals. At the same time, it must be succinct and be readily articulated by all business employees.
The Vision Statement
Yogi Berra once said, “If you don't know where you are going, you might wind up someplace else." The same is true for businesses. A vision statement keeps businesses on track toward goals regardless of changes in leadership. According to PsychologyToday, a vision statement:
Defines the optimal desired future state of what an organization wants to achieve over time
Provides guidance and inspiration for focusing on future achievements
Acts as the "north star" for employees so understand how their work contributes to achieving long-term goals
As with the mission statement, a vision statement should also be succinct enough for employees to repeat at any time so that they are always aware of where the company wants to go.
The Power of Purposeful Documents
Having the right insurance agency business strategy is vital for success. Unfortunately for many small businesses, making sense of business tools, let alone implementing them, is time consuming. Yet, most experts agree that the tools are highly effective. MindTools describes mission and vision statements as “Unleashing the power of purpose.” Creating a great executive summary matters because sometimes it is the only part of the document read by recipients. The right business tools set you on the road to success by organizing your message, establishing your brand and setting (and sticking to) a budget.