Whether a recession is coming or not, there's always a need to ensure that your business is on the right track. How can you maintain your insurance jobs during a recession? What are some simple steps that you can take to ensure that your insurance agency will survive?
Below, you will discover five steps to recession-proof your insurance business.
1. Understand Your Cash Flow
Take some time to really understand your finances on a month-to-month basis. What cash flow do you have? Do you have any reserves? Create plans for different financial scenarios in advance, so that you know exactly what you need to do if your business changes. For instance:
What will you do if you have to move more business online?
What will you do if there is a big change in the way that clients engage with one of your products?
What will you do if you receive many claims in a certain area of your business?
What will do you if you need to close up your storefront for a while?
2. Consider How to Diversify
The BDC states that "broadening your line-up may be the key to surviving during the next recession." What do you do very well? Can you offer more products in that area? If you're getting a lot of questions about something that you don't do right now, is it possible to pivot your business so that you can address that need? Business flexibility and diversity is key to surviving a recession.
Work with colleagues to consider how to diversify your business.
3. Determine Your Message and Your Ideal Client
One of the keys to survival as a business is differentiation. Make sure that your clients know why your specific insurance agency is ideal for them, and you'll keep those clients and attract more. Examine what marketing messages are working for your clients right now, and expand those. As you look at your enthusiastic clients, those who actively promote your business, look at their profile, and create a customer persona that reflects those individuals.
4. Encourage Word of Mouth
When your clients are experiencing a recession and your business is having the same experience, now is the time to show compassion and flexibility as a business. Word of mouth is one of your biggest assets, and at a time when you may not have a lot of available funds, it's also inexpensive advertising. Go above and beyond to treat your clients well, and ask them specifically to refer you whenever you can. Offer educational materials, images, videos, and livestreams to attract new clients to your business and position yourself as an expert in the community.
5. Have Multiple Income Streams
According to Forbes, "one key way to recession-proof your business is to have multiple revenue streams. Having a variety of ways you are bringing in revenue at a wide range of price points is necessary to maintain your income, regardless of the economy." Think about how you market your different insurance products. Mention lower-cost options specifically, so that clients know that they can stay with your agency and still have more affordable possibilities. Offer a wide variety of options to your current and prospective clients, and you will maintain more of them in the long term.
Get ready for what's ahead by working with American Agents Alliance. We work with independent insurance agencies like yours to provide many membership benefits and resources for your business. Contact us today to learn more.