There are nearly 29 million small businesses in operation in the United States, and these companies employ about 50 percent of all U.S. workers. The Small Business Association defines a “small business” as one with 500 or fewer workers. If you do an Internet search for insurance agencies or PEOs (Professional Employer Organizations), the bigger agencies will likely pop up first. This is because they spend lots of advertising dollars to rank well.
But a large agency might not be the best fit for your business, especially if you are also a small business. If you’re in the market for a new insurance broker or need to outsource some human relations activities, here is a guide for deciding whether you need a small agency or a large one, and how to find the right agency to meet your needs.
The Benefits of Doing Business With Smaller Agencies
Smaller agencies are able to offer personalized, one-on-one service. At a small agency, you aren’t identified by a customer number; you’re a real person (and after some time, likely a friend). Small agencies can often be more flexible with their customers, because there isn’t a huge, set-in-stone policy guide that has to be followed to the letter.
Small agencies, like small businesses, are also agile — since they are not a large bureaucracy they are able to move quickly on issues and resolve customer questions or problems fast. Many businesses also like to support small businesses because having lots of players in the industry prevents larger companies from gaining enough market share to become a monopoly. Competition is great for any industry!
If you’re a little mom and pop organization, having this friendly, flexible service is tremendously helpful. At some of the larger agencies, your business is such a tiny portion of their income that you might feel like your business isn’t that important to them. At a small agency, your business is a vital part of their revenue stream.
The Benefits of Doing Business With Larger Agencies
Of course, there is a reason why large companies get so big. In many cases, it is because they have attracted tons of customers with great products and services. Large companies generally have streamlined processes for the things that they do, and can offer a wider selection of products and services. Because larger companies qualify for bulk rates, they can often negotiate lower prices, and might pass that savings on to their customers.
Large agencies also have multiple departments, meaning that the people working in those departments are specialized. Sometimes, this translates into a greater knowledge of their subject matter. Larger agencies also might have multiple branches, meaning you can find a branch close to your office or offices. Also, large agencies are equipped to handle larger businesses with many employees. This can sometimes be impossible for the smaller agencies, or at least stress their infrastructure.
How to Choose Between a Small and Large Agency
So, is a small or large agency right for your business? A lot of the decision comes down to preference: would you rather work with a larger, established business with abundant resources, or a smaller, more personal agency with the flexibility to work with you as you grow?
Also, what types of insurance and benefits do you need? If you’re a small business and only need the legal minimum of worker’s compensation insurance, you might get a great deal from a small agency. But if you’re a mid-size or growing business, you might need a full complement of HR services offered by a larger PEO. A PEO can help you offer an attractive benefits package so that you can attract and retain great employees, which is a critical part of your ability to grow as a business.
SourceOne Partners can help match you with the perfect PEO for your size and needs. Without charging you any additional cost for the finder’s services, SourceOne Partners will conduct a cost-benefits analysis and provide you with all of the pros and cons of different PEOs. Call 561-674-0748 today or visit the website for more information.