If you’ve read our article on glass ceilings, there’s a question you might have asked yourself. We spent a lot of time focusing on how to identify invisible barriers holding the company back and the steps needed to grow to the next level. So what do we mean by that? What is the next level? Do you ever get the feeling that something is holding you back?
“If one does not know to which port one is sailing, no wind is favourable”
In the same way we’ve found that glass ceilings tend to follow patterns which can be tracked, our research has also found there are clearly defined stages in an insurance broker’s lifecycle. Six in fact, and knowing where you are is as important as knowing where you want to get to.
The six Life Stages of an insurance broker
Every successful company had to start somewhere. The early days can be some of the most exciting, but they can also be some of the most testing. Making the decision to start a new venture can be daunting, and the start of a company’s life is often defined by the challenge of keeping your head above water, keeping the cash flow ticking over, and simply surviving.
After the initial rush, things start to calm down a little. Relationships with clients strengthen, resulting in a new degree of stability for the company. This fresh breathing space is a great springboard to focus on the infrastructure of the company and strengthening your book of business. It’s likely that you will struggle to run the business single handed; you’ll need to recruit in order to create a little breathing space and find a little time to think about “what’s next”.
Once you’ve found your feet, the next stage in the evolution of the brokerage will be a focus on really growing the business. This is a conscious decision that needs to be made and actioned. The growth phase is typically defined by a range of factors including investment in the business, defined roles and responsibilities, a clear strategy, onboarding new clients and increasing revenue. Most brokers believe they are in this stage, but here is the reality – only brokers with consistent double digit growth are in this sector.
Success in business isn’t purely defined by growth of course. Many brokerages will reach the stage where they have matured to a certain point and growth slows: perhaps you don’t want to expand the team as you’ve already got a great dynamic in place, perhaps you already have a good lifestyle balance, maybe you’re catching your breath after a period of sustained growth. Sometimes you’ll want to preserve what you’ve built. This is where those Brokers achieving single digit growth exist.
If you own a business, the time will eventually come when you need to start thinking about stepping away from it, be that through retirement, or handing / selling the business to others and moving on to new ventures. A lot of time and research will go into arranging succession plans and exit strategies. More often than not, we have found that brokers going through this are doing so for the first time. If you don’t go through this stage then you are likely to fail to realise the real value of your business.
After finalising your succession plans, following them through is a stage in itself. It doesn’t matter if you’re handing the reigns to someone internal or selling the company outright, the business will undergo changes which need careful orchestration for the transition to go smoothly.
The path less travelled
Of course, the path that independent brokers follow is going to differ from one organisation to the next. Whilst the six life stages reflect the pivotal phases in the life of the business, they won’t necessarily occur in the order above; this is simply the most common way brokerages develop. In practice, many brokers will jump backwards and forwards through the growth stages. We see a lot of brokers in the Maintain stage who find a new hunger for growth and make the appropriate changes to facilitate this. We’ve also seen brokerages set up with a clear succession plan in mind right from the start, who have gone on to skip from the growth stages straight through to the final event stage.
Knowing which growth stage you are at and which one you are building towards is pivotal. One of the things we have found fascinating is the responses we get when we ask brokers where they see themselves in this growth cycle.
With the exception of start-ups, the overwhelming answer we have had from brokers has been that they are in the growth stage. In most of these cases though, we would have considered them to be in the Maintain stage: they are preserving what has already been built. Increasingly, we’re finding that when brokers shift their perspectives it can unlock tremendous opportunities for renewed growth.
At Broker Network, we believe we are the only network that can support independent insurance brokers at every Growth Life Stage. We support start ups, succession planning, and everything in between. Talk to us.