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Analysis of Agencies with Revenues
Less Than $500,000
C
OMMUNICATIONS
–
E
MPLOYEE
, C
LIENT
,
AND
C
ARRIER
Because of their small size, these agencies find employee
communications to be fairly easy. Everyone can gather
quickly, either regularly or spontaneously as needed, to share
information, get and provide feedback, and make decisions.
Financial information may or may not be shared with non-
family employees, but everyone has a good understanding of
the agency’s goals and what it takes to accomplish them
simply because they are discussed so openly and often.
Generally these agencies communicate to the employees the
need for honesty and integrity in all client and carrier dealings.
One agency developed a statement signed by everyone in the
agency regarding the “trust factor” and the confidentiality of
client information.
“We work at being sensitive to the
emotions and respectful of the person
on the other end of the line.”
“A letter goes out to every client with
a claim telling them what to do, i.e.
write down the name of the adjuster
and phone number, etc. The letter
spells out exactly what they need to
do, what is going to happen, and what
the expected time frame is and that
they should call us immediately if
anything is different from what we
told them to expect or if they have any
problems.”
These agencies communicate the importance of the personal
client relationships through such actions as sending birthday
cards, attending client functions and personal events, and
using gift certificates to say “thanks for the referral” or “sorry
we caused you an inconvenience.” A surprising variety of
vehicles are used to communicate information to clients and
companies including comprehensive advertising (radio, cable,
local newspaper) and the internet (websites, email). Frequent
business communication is maintained through periodic
phone calls, educational bulletins, industry news, annual
renewal surveys, and correspondence as needed to keep the
client informed of the status of transactions.
F
INANCIAL
M
ANAGEMENT
“Our best practice for financial
management is just staying on top of
it. We watch our P&L very closely
comparing it to the previous year, and
we keep receivables in check. We do not
let anyone get out of hand. We present
the bill and tolerate 30 days. Period.”
Successful financial management for a small insurance
agency is defined differently than it would be for a larger
agent or broker. For the small, privately held firm the existing
tax laws actually encourage owners to take money out of their
businesses as opposed to building up their agency’s balance
sheets. On the surface, this would affect liquidity and cash
flow, but most of these owners are willing to put their personal
resources in the business to meet payroll, invest in the
purchase of physical assets, or make an investment to grow
the business. For this reason, financial management cannot
and should not be measured by the strength of the balance
sheet.
“We watch bottom line profits. They
are the reason we are in business...
plain and simple.”
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