Develop a vision of the insurance products you want to market. Building your own insurance company is first and foremost about building a "book of business." You need a steady volume of business coming in, both new business and renewals. The insurance business is not about insurance products per se: It's about the marketing of insurance products.

Translate your vision of your insurance marketing company into a formal business plan that describes, among other things, the insurance lines you intend to market and the market segments you intend to serve. The typical insurance lines are: personal lines, which pay a commission of 12 percent to 15 percent for new business, and 10 percent to 15 percent for renewals; health lines, which pay 15 percent to 20 percent for new business, and 10 percent to 20 percent for renewals; commercial lines, which pay 12 percent to 20 percent for new business, and 10 percent to 20 percent for renewals; life lines, which pay 80 percent to 120 percent for new business, and 2 percent to 10 percent for renewals; and homeowners/flood lines, which pay 12 percent to 20 percent for new business, and 12 percent to 20 percent for renewals. Renewals serve as your perpetual annuity, assuming you keep your current customers while constantly adding new customers.

The markets you intend to serve will be a function of the demographics of your location. It's best to allow the markets you serve to drive your decision on the lines you market rather than the reverse.

Dedicated insurance company business-planning software, including appropriate templates, is readily available on the Internet. Well-known examples include the PlanMagic Insurance Agency Business Plan software and Start Your Own Insurance Agency software. You'll need to identify the software, however, that's best suited for your needs.

Decide on whether you're going to use a captive or independent agent/broker. The captive agent represents one insurer exclusively; the independent agent represents many insurers. There are benefits and limitations to both---you'll need to decide which is best for you. Insurers using a network of exclusive agents tend to provide more marketing, sales and training resources to their agents. Independent agents have considerably more flexibility in tailoring insurance products to the specific needs of their customers because they can shop the lines offered by many different insurers.

Get licensed. Most states require a separate insurance license before you can sell any of the aforementioned insurance lines. In terms of order of difficulty in studying and passing the tests, the life and disability license is the easiest license to acquire; the most difficult test is for the license to sell commercial lines. Don't be discouraged by the perceived difficulty in passing the different tests, however. They're all designed to be passed by any reasonably intelligent person with proper study.

In addition to the requisite licenses needed to sell different lines, you will also need to secure insurance coverage on you and your business through a surety bond and/or an errors and omissions (E&O) policy. As the name states, this coverage protects you from liability resulting from any errors or omissions a customer may allegedly attribute to you, which resulted in damage to the customer.

Get appointed. As an independent agent or broker, it falls on you to convince the different insurers you solicit that they will make money with you. This is a hit-and-miss process, as it is with any sales proposition. Don't approach any prospective insurer without your business plan. The contents of your plan must be overwhelmingly convincing in terms of your understanding of your market, your competition and the strategies you intend to employ to grow your business.

When soliciting insurers, don't get blindsided by questions about your loss ratio (the ratio of the dollar value of claims paid against policies you wrote). Insurers usually prefer that their reps have a loss ratio of 50 percent or less. For example, if you wrote $1,000 in policies and had claims against those polices in the amount of $1,000, your loss ratio would be "1." If you're new to the business without a loss ratio, be prepared to speak to the reasons why the market you serve assures your loss ratio will be less than 50 percent.

For those unique "niche" insurance lines for which you may get an occasional request, use a managing general agent. They underwrite policies you don't. You split the commission, but some revenue is better than no revenue.

Acquire local, state and federal permits and licenses. You also have the obligatory "other" permits and licenses needed to conduct business. Check with your local, state and federal governments to ensure you're fully licensed to conduct business in your locale.

Get financing. Building your own insurance company is not an inexpensive proposition. You can cut corners, particularly if you opt to go the captive-agent route, as you can shift some of your marketing and sales expenses over to your sponsoring insurer. In addition to the normal start-up expenses associated with any business, you must also be concerned about cash flow to cover your operating expenses until your incoming revenue is sufficient to cover your outgoing expenses.

Assuming you need external financing to build your insurance company, your business plan once again becomes an essential document with which to approach funding sources in a credible manner. Don't leave any stone unturned---don't hesitate to approach banks, commercial lenders and the Small Business Administration (SBA) with your business proposition and business plan in hand. Consider taking in equity investors or an equity partner. Your success in getting funding will be in direct proportion to the persuasiveness of your business proposition. Depending on the business model you intend to use, budget your funding requirements in the minimum range of the hundreds of thousands of dollars. This should all be described in your business plan.

Put in your infrastructure. In addition to office space, furniture, computers and equipment, you'll need some form of agency management software or customer relations management (CRM) software to keep score. You'll need to know how you stand with new business, customer renewals and customer cancellations, as well as which lines are selling and other key metrics about your business.

Market your business. You already wrote your marketing plans and strategies---they're included in your business plan. It's time to execute. Get out there and sell, sell, sell!