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

At the same time, it can be more difficult to do in the midst of a horrendous economy and a lot of uncertainty created by the 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 “circle their wagons” and go into a defensive mode, while other agencies have been “frozen in their tracks” and have decided to do nothing until the picture is a lot clearer.

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

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

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

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

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

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

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

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

Many of your customers are struggling and may be looking for ways to lower costs. Make certain you are helping them find solutions, and that they are not motivated to find a different broker in order to lower costs.

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

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

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

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 renegotiate leases and find other ways to lower expenses.

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

o Look for opportunities to acquire books of business or agencies, particularly ones that can be folded-in to your existing operations.

These additions can be added with little change in overhead and can 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 orderly transition of the ownership and operations of your firm.

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

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

As stated previously, planning is needed and important every year, but will be especially valuable with market conditions as they are today.

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

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