As we approach the end of 2009, many agents and brokers arefocusing on business and strategic planning for 2010 and beyond.Such planning is of critical importance for every firm and in everymarket.

At the same time, it can be more difficult to do in themidst of a horrendous economy and a lot of uncertainty created bythe actions of our federal government, including:

o Dramatically increased spending and debt

o Tax increases

o Health care reform

o Financial services regulatory reform

o Environmental legislation

o Governmental intrusion into the private sector

o International instability

The list goes on. In response, we have seen some firms “circletheir wagons” and go into a defensive mode, while other agencieshave been “frozen in their tracks” and have decided to do nothinguntil the picture is a lot clearer.

Either of these responses is ill-advised. At the same time, wewould not suggest that anyone ignore the problems and challengesand recklessly charge ahead.

We would make the following 10 suggestions as to how you focusyour efforts and make your plans in light of the challenges anduncertainty that your agency is facing:

o Remind yourself and your staff that, in spite of thechallenges ahead, this is still a wonderful business, and thatmost–including Reagan Consulting–feel that the future of theindependent insurance distribution system is bright.

Your people may be more anxious than you know. Reassure yourstaff, while at the same time letting them know that the firm willhave to “tighten its belt” and that it needs every employee goingat 100 percent.

o These difficult times provide an excellent opportunity tocarefully asses your people and your operations, and to addressproblems when you find them.

In these market conditions, your staff will understand the needto eliminate waste and to address non-performers. There is no roomfor fat, waste or inefficiency.

o Get all of your staff focused on finding ways to increaseproductivity. Provide incentives for them to do so.

o Stay in touch with your key customers and make certain thatyou are attuned to their challenges and that your firm is meetingtheir needs.

Many of your customers are struggling and may be looking forways to lower costs. Make certain you are helping them findsolutions, and that they are not motivated to find a differentbroker in order to lower costs.

o Look to increase the new business sales efforts of yourcurrent staff. Make certain they have aggressive businessdevelopment plans and that they are executing those plans.

o Be willing to make good strategic investments in new producerhiring. Consider hiring young producers who will not cost as muchbut who can be great long-term contributors.

(Go to the Reagan Consulting Web site–www.reaganconsulting.com–toget a free copy of the recently released “Young ProducerStudy.”)

Considering the lag time in finding, hiring and training staff,this is an excellent time to be making producer investments.

o Look to manage expenses. This is a great time to renegotiateleases and find other ways to lower expenses.

Be careful not to make unnecessary expenditures unless there isa direct financial return tied to the investment.

o Look for opportunities to acquire books of business oragencies, particularly ones that can be folded-in to your existingoperations.

These additions can be added with little change in overhead andcan be very accretive.

o Stay opportunistic and open to new accounts, programs, people,referral sources, strategic partners, alliances, etc.

o Make certain you are planning and preparing for the orderlytransition of the ownership and operations of your firm.

Manage your WASA (weighted average shareholder age) and yourWAPA (weighted average producer age), making certain that they arestaying within healthy ranges (that is, below 50).

Current market conditions might cause some agency principals tomake less of an investment in planning this year.

As stated previously, planning is needed and important everyyear, but will be especially valuable with market conditions asthey are today.

Be wise. Be focused. Be strategic. Be aggressive. We areconvinced that the best days of our industry are ahead of us, soabove all, be optimistic.

Bobby Reagan, CPCU, is the chief executiveofficer of Reagan Consulting in Atlanta. He can be contacted at[email protected].For more information, go to www.reaganconsulting.com.