Buying an insurance company: franchise or independent?
If you are thinking of buying an insurance company, you no doubt already know that you have a huge market that requires what you will be able to provide. A large percentage of the population buys multiple forms of insurance, which means that no matter what type of company you buy from, you will have a large target audience. One of the first and most important decisions you will make when deciding if buying this type of business is right for you is choosing between an independent business and a franchise.
While all businesses are inherently risky in one way or another, you can offset a large portion of the risk by considering purchasing a business that is set up as a franchise. By now, loyal customers form a foundation for the company and the brand is already in place. Franchises place a great emphasis on brand recognition. Also, the trial and error phase of the business will have passed long ago. Many franchises have a training opportunity for you, so you don’t need to learn the ropes yourself. Once you become a franchise owner, you get a lot of support from the franchise company as a whole.
On the other hand, you can choose to buy a company that is an independent business. With this decision, you will have more freedom as to where you want to take your business because there will be no franchise regulations. You also won’t have to pay the fees charged by franchise insurance companies. Franchise fees exist to pay for advertising and other elements of a franchise that you can avoid with an independent business. However, remember that your services will be less well known and it may be more difficult to obtain clients.
No matter which one you choose, any company you find for sale will be backed by the well-known insurance products the company represents. What this means is that you can build the business from the point you make the purchase instead of starting from scratch. The fact that a lot of the work has already been done for you is a huge advantage of buying an insurance company rather than starting one from scratch. This is the case for any business enterprise, the knowledge of which you can use to make sound business decisions, even if you are not an ambitious entrepreneur.
