Written by Richard Talbot-Jones.
Husband and wife, Richard and Clare Talbot-Jones run Talbot Jones Risk Solutions, based in Felling, Gateshead. In a series of five blogs, Clare has covered highlights from her entrepreneurial journey including the first steps to starting Talbot Jones Risk Solutions with her husband. This month we hear from Richard, an IOEE Fellow, who is giving his own reflection on their first year in business.
After 8 years in the insurance industry working as a broker and with a lack of opportunity for advancement in the local market, it seemed a good time to roll the dice and launch my own firm.
Now, after a full trading year I can look back at our mid-year review of the lessons we’ve learned, reflect on what we’ve achieved in the interim and share some of experiences and findings.
I’ve been helping start-up businesses with insurance and risk management for 10 years now, and I’ve seen businesses succeed, and fail. This gave me a helpful overview of good practices that helps a business to flourish.
Before entering the insurance profession I’d spent about 5 years in the Army. One thing the Army is very good at and keen on is planning. As the saying goes: Proper Planning and Preparation Prevents Poor Performance – the 6 Ps.
I’m therefore absolutely convinced that to succeed, a business needs an objective and a plan. They don’t need to be super-detailed, but without them a business won’t know where it’s going, or why.
Before you can make a plan, you need an objective, asking “What do I want from the business?” or “Why am I starting this business?”. The answer will be unique to each organisation. The objective gives you something to plan to achieve. An objective also dictates what you will regard as success for business.
In order to illustrate this, I won’t tell you the “right way” to do this, the “Army way”, or a management book way. My own process is simply this:
- Identify objective(s)
- Determine milestones/Critical success factors
- Work out how to get there
- Analyse feasibility
Our objectives for Talbot Jones Risk Solutions:
- Achieve Work/Life balance
- Achieve financial freedom
Milestones we need to reach to complete the objectives:
- Achieving enough commission and fee income to support me and my wife, Clare (in the form of an annual target, each year for 4 years).
- Generating a certain number of leads per month
- Gaining specific numbers of followers on social media and website hits per month
How to reach the milestones:
This is the business plan:
- What are we going to sell, and to whom?
- Where and how will we sell our services?
A key element of a business plan is market research, and so we asked ourselves the following questions:
- What competition would there be?
- Was the marketplace already saturated?
- Could we differentiate ourselves sufficiently to succeed?
Feasibility:
To test the feasibility of the plan we worked out what we ideally wanted financially. We knew our likely average income per policy arranged, so if we knew how much we wanted to earn we could work backwards. For example:
If we wanted an income of £50,000, we would need to arrange 500 policies in a year. This means we would need to do about 1,500 quotations – taking an industry average conversion rate for sales. To get the opportunity to quote for 1,500 policies we would need to have about 3,000 opportunities.
Now, break that down into monthly or weekly workloads: Over 100 quotes per month, 25 a week, 5 a day. Using industry standards that means 10 opportunities to quote per day (but where from?).
Will this work? Do we need to do less quotes, but higher value ones? Can we automate anything or make processes efficient enough to achieve these kinds of results?
We can then work the other way – what seems feasible per day, per week or per month. And where does that then leave us in terms of income?
So, considering all these different variables, we came up with a plan.
Having completed our first trading year, we’re now in a position to assess our performance against the plan. How accurate was the plan? Did some of it need discarding or changing?
In this assessment, I would work from the detail up to the objective:
Did we get the social media followers we wanted? We did on Twitter; Facebook and LinkedIn, not so much. Did this have much of an impact? Yes, despite being small, our Facebook following has created a lot of commercial opportunities. Our larger Twitter following has done the same. Although our company LinkedIn profile is puny and doesn’t receive much interaction, my personal account has been invaluable in maintaining links and continuing relationships with clients who have seen I’ve set up on my own and are keen to come aboard.
Did we get the website hits we wanted? Yes we did, some months way over what we thought likely. It’s difficult say whether these hits resulted in direct enquiries, in the sense we had very few emails to the address on our webpages. We also haven’t made much headway in terms of SEO as we are up against some giants. However, we did get a fair few phone calls as a result of website visits, so it must have worked a bit! Where it has proved most useful is in building awareness of our brand and letting people get to know us and trust us. After a year in business we’re starting to find that people know of us before they meet us- they’ve seen out tweets and read our blogs and it puts us on the front foot when we meet new people.
Did we get enough leads per month? No, not as many as we had thought we would need. But whilst fewer in number, the quality was very good, mostly thanks to Clare’s natural networking ability, so our conversion rate is much higher than the industry average. Our leads invariably lead to quotes and uptake of quotes is high.
Did we achieve enough commission and fee income? We were within about 7% of what we had planned to get, which I was really quite happy with. It meant that we pretty much got what we wanted, and we are on track to achieve the financial milestones in Year 2.
Have we achieved financial freedom yet? Ask me again in 2020! But we are comfortable, we survived the first year and finished on a really positive note. We’re stuck into Year 2, considerably exceeding last year’s performance each month and not spending money on the significant set up costs we incurred in Year 1.
Have we achieved a satisfactory work/life balance? Again, it’s a work in progress. However, I feel more relaxed and comfortable than I ever did working for someone else. Although I don’t ever get a full day off work, I can see my kids at sports day or nativity plays without using holidays or making up the time. I have a muscle condition which impacts my mobility and so I need to swim a lot and have physio regularly – I can more easily fit this into my working day now that I know I don’t have the same time constraints. Work still needs doing, but there is a different motivation now, and a different pattern of work. Is our family more or less happy? More. Definitely.
One year on from our launch we haven’t achieved our objectives - yet. We’ve worked hard to achieve our milestones, and we’ve done well to stay on target. Realistically, as we have a four year plan, I expected that we would make progress towards the milestones and achieve them at different points throughout the four year period. Hopefully we’ll reap the benefits of having both objectives and a plan. I don’t want to go to work for the sake of it: I have a purpose for working and a plan to realise that purpose. Of course, the plan may need amending as we go- as the saying goes: no plan survives contact with the enemy. So far our plan has only needed small tweaks and has provided a lot of direction, reassurance and challenge. And so, we keep pressing on!