Small and mid-size businesses consistently play an important role in the overall economic growth of the United States. There are currently approximately 30 million small businesses that employ 56.8 million workers, according to the U.S. Small Business Administration (SBA). They are defined by the SBA as having fewer than 500 employees and account for an unimaginable 99.7% of all businesses in the U.S.
And they’re very important to the economy because they create many jobs. The SBA reports that in the first three quarters of 2014, small businesses added 1.4 million new jobs and almost 40% of the jobs were with very small companies with fewer than 50 people. Quite literally that means your can find small businesses on every street in every community across America.
For insurance agents this means opportunity abounds. The National Association of Insurance Commissioners (NAIC) small business survey found that 90% of small businesses are protected with Property and Liability coverage and more than 60% have Workers’ Comp in place. There is a growing need for additional coverages like Business Interruption, Data Breach and Commercial Auto to help small businesses stay protected in a fast-changing environment.
Many small businesses also recognize they need help with healthcare plans. The National Small Business Association (NSBA) 2015 report identified that two of the top three challenges noted by survey participants were centered around health insurance – its cost and regulatory burdens. Since the implementation of the ACA, everything about health insurance has gotten more complicated for employers.
Small businesses clearly recognize the difficulties associated with running their companies. Agents interested in serving their communities don’t have to go far, maybe just around the block, to find employers in need of their expertise. Agents just need to be prepared and have a game plan in place to tap into this lucrative market.
There’s never been a better time to approach small businesses. That’s because the NSBA report also found that 75% of business owners are confident in their own company’s success. Agents need to take that optimism, do some homework and consider what resources and strengths they need to present to a small employer to get her or his business.
According to a recent National Underwriter article, agents can follow these top five strategies to find success in selling to small businesses:
- Assess the risk – collect a list of local business and research their risk exposure to understand what products will be a fit for their company needs
- Shop around – look carefully at a prospective client and make sure the company is a good fit for your agency and product offerings
- Consider bundling – To avoid coverage gaps, package products together when possible
- Understand the customer and his/her business – Take the time to get to know the owner of the business you want to help and their competition
- Review coverage annually – After attaining a small business account, review coverage annually as business needs may change year to year.
Source: National Underwriter. Selling to Small Businesses. October 2016. PP. 42-43.
