To err is human, but botching your insurance agency start-up canbe a personal, professional and financial disaster. When starting anew business, success is never guaranteed and many start-ups fail.So, how does a savvy independent agent avoid disaster?

Before I answer that question, I must emphasize that I'massuming that the start-up agency has established access toinsurance companies to write premium–without that, nothing elsereally matters.

Now the answer: Learn from the mistakes of others. Here,the five common mistakes many agency start-ups make.

1. IgnoringInfrastructure

When you first set out on your own, typically you have few, ifany, clients. Consequently, it's easy to fall into the trap ofputting off until tomorrow what you should really invest in today.Most commonly, this list of to-be-deferred infrastructure includesvital agency technology, including: agency management systems,responsively designed websites, mobile applications, social mediaand ongoing IT support.

In reality, much of this infrastructure is needed upfront tosupport anticipated growth. You don't have to get the best and mostexpensive services and equipment, but a basic agency managementsystem is crucial. You will want to ensure these initialinvestments offer scalability over the foreseeable future of yourbusiness.

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2. Lack of DueDiligence

Is that vendor right for your business? How much money will youreally need in the first six to eight months while you ramp up?Does that agency management system work the way you need it to?Before you invest in equipment, cash management plans and vendorrelationships, do your homework. Interview vendors. Be clear aboutyour expectations. Talk to other independent agencies about theirfirst year in business. Ask lots of questions and make sure you getwhat you need that fits your budget and your working style.

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3. Poor Planning

Most new independent agents don't have a complete idea of whatto plan for when they start out. New agencies are often launched bygreat producers who aren't good business owners (at least atfirst). They need to develop a new skill set and understand andembrace the responsibilities of a business owner. Networking can beinvaluable. Connecting with a peer group to figure out whattypically lies ahead is critical.

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4. Missed MarketingOpportunities

In these technologically advanced times, there are countlessways to connect with and win new customers. For too many start-upagencies, however, I often see a marketing plan significantly outof sync with the times. These plans typically lack detail or theneeded repetition and consistency to effectively market the newbusiness to prospective clients. Door hangers and Penny Saveradvertisements in the age of SMS messaging, social media andcustomized e-newsletters just don't move the needle as they oncedid.

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5. MisidentifiedAudiences

It happens across personal and commercial lines of insurance:Start-up business owners sometimes neglect to carefully identifytheir audience. What ends up happening is that theseentrepreneurs—for whom time is truly money—spend far too much timepursuing individuals and businesses who don't match their targetaudience, rather than focusing on those who are a much better fitfor their service offerings. For example, they'll invest dozens ofhours prospecting and pursuing their big white whale—the gamechanger—unsuccessfully, though there are ample (and attainable)bass closer to shore.

Not every mistake is fatal to a start-up, but avoiding some ofthe common pitfalls of many new agencies increases the odds ofsuccess.

In today's environment, removing obstacles, adapting torealistic circumstances and understanding the risks of being astart-up are key in successfully launching an independent insuranceagency. While the common mistakes noted above are justthat—mistakes—they offer keen insight into mapping the futuresuccess of your business. Knowing what to expect and what to avoidmight just be the best business advice you ever receive.

Jeff Holmes is the Vice President of Agency Operations &Services, SIAA and SAN Group, Inc. Under hisleadership, SAN AccessPlus and Agency Development teams processmore than 10,000 new business submissions per year and provideextensive mentoring for agents and staff. He has more than 20 yearsof insurance management, marketing, underwriting, training, sales,claims management and risk evaluation expertise. Jeff can bereached at [email protected].