Although the reasons to plan are as endless as the individual needs of each agency, there are a number of common factors. Jack Fries reviews the importance of planning to your agency's success.
WHY PLAN?
As the manager and/or owner of your agency, you know that every task you undertake on a daily basis should be one step closer to the completion of an overall agency plan. Why plan, you ask?
It's no secret that there's a significant consolidation movement going on within our industry. Five years ago there were 55,000 independent agencies. Today there are estimated to be somewhere between 40,000 and 43,000. By the year 2005, the experts are predicting that there will be 20,000. This fact alone suggests that every independent agency needs to plan.
However, in reality, only one in 10 agencies has a comprehensive written plan that each member of the agency staff is following. That leaves 90% of us without the planning tool we need to help us get to where we want and need to be.
The most frequent excuse I hear for not planning is that an agent has tried planning in the past only to have circumstances change so drastically that the plan becomes meaningless. That's all the more reason to plan! It's better to have a plan and have to change it than to have no plan at all. If you were taking a trip along a planned route and came to a detour for a bridge out, you would change your route, but not your goal. The same holds true for your agency.
Constantly changing conditions make planning essential. We must plan for the effects of competition; for hard or soft market conditions; for economic changes (either national or regional); and, perhaps most important, for the continuation of our agencies, whether by perpetuation, sale, or a merger/cluster arrangement.
The reward for your effort will be planned growth and profit as a “survivor agency.”
Another major benefit of planning can be summarized by a recent seminar that featured a panel of insurance company representatives. Their conclusion was that agents who have a written business plan will almost always receive an agency appointment ahead of agencies that have failed to plan. The company representatives described an effective agency plan and perpetuation planning as the two most important considerations in an agency appointment. A good plan indicates to the company that the agency can produce the premium volume it has committed to, while a perpetuation plan protects the company's book of business, as well as the agency.
Finally, you need a plan for profit because of the ever-increasing cost of automation and such everyday overhead expenses as group health, training, and education.
WHO PLANS?
You don't have to do all the planning yourself. Encourage your entire staff to provide input. As long as the plan is “your plan,” they'll help you with it as much or as little as they see how it affects each of them personally. If, on the other hand, they see the plan as “my plan,” you can expect a far higher level of cooperation and concern. Get everyone involved, down to the part-time file clerk. It's surprising how many good ideas come from the people who actually do the jobs.
However, be prepared to have the air let out of your tires! If your people give you honest feedback, they'll develop ideas that will surprise you. That's okay. The important thing is to get them started on the road of planning. The sign of a truly professional owner/manager is the ability to listen, refine, and implement.
HOW TO PLAN
The final step in planning is to pull your key people together and put in writing all the input that they've developed. Organize their ideas into a plan that you can implement by using an Action Plan form. The best Action Plan we can think of defines each task, assigns it to an implementer, gives it priority, and sets a date for the start and finish of the task.
When you've completed your plan, congratulate yourself for accomplishing a tough task; you're now part of the 10% of agencies with a plan to succeed.
But your real work actually begins now. The key to making the plan succeed is your personal supervision of the follow-through. The first time you say, “Never mind, I'll do that” you've undermined your plan. What you wanted will get done, but only if you make it an A+ priority.