What the Best Brokers do... Next

You've just had your first real holiday for quite a while, maybe even for a few years. And if you are anything like most high performing brokers, you probably spent most of your holiday poolside time, thinking about ways to improve your business. Don't be ashamed, most high performing business owners do the same.

You've worked hard and a lot of the hard yards are done. You've developed a great knowledge of lending products, but understand you never stop learning; you've built a decent sized client base and trail book returning steady recurring income each month, but you want more; you have developed a network of consistent referrers and your phone rings often with customer referrals. Life is good!

Financially, you are in good shape, finally!! You are generating net income that covers your living expenses, commitments, your BAS payments and you have surplus cash each month. You've paid off the credit card debts and or the cash your family and friends lent you during the start-up phase of your broking business (this never rates a mention in any industry commissioned reports does it?!).

So what do the best brokers do next? There are really three directions you can take your business at this point. If you are a great at generating new business and prefer to develop people, more so than dealing with customers, you may decide to build a big, scaleable brokerage (more on this in my next article). However if like most brokers, you enjoy the customer facing aspect of broking, you have the choice of being a high performing, high earning sole operator or the lead broker of a multi broker business.

In all three business models maximising performance is all about maximising capacity. What do you do well? What areas of your business can you outsource? Whether or not you are great at putting deals together and dancing with lender credit teams, this is one area of your business that can be outsourced to create additional capacity. 

I see many new brokers these days, outsourcing their loan processing, at an early stage, which on one hand makes sense, as it covers an obvious weakness in their business due to their lack of lending experience. However there is a lot to be learned and experienced gained from taking a deal from lodgement to settlement, although some lenders make that experience far from pleasurable these days.

Regardless of whether the broker is new or established, when they outsource their loan processing, it is critically important they use the time saved, productively. Business development of new and existing referral partners, meeting with and talking to new and existing customers, marketing, basically anything that helps generate more opportunities and sales for the business, are all productive activities to fill the hours saved through outsourced processing.

If a broker is not going to use the time saved productively or if they lodge less than 8 loans a month, in my opinion they are best served processing their own deals.

Opening an office or sub-leasing space provides fantastic time management benefits. Most brokers report that by opening an office more customers come to them and usually during regular business hours. People take time off work to visit the doctor, a solicitor or accountant so it usually means a more committed customer when they do the same and visit a broker during business hours. You may lose a deal every so often by being less mobile, however the time saved can be used productively elsewhere in the business.

Mark Bouris, founder of Yellow Brick Road in a presentation at the Better Business Summit a few years ago, noted knowing which deals to focus on first, as a key to broking success and I agree with Mark on this point.

I've seen brokers generate more leads than they can service but not know what to focus on first. It's important to learn to quickly identify the deals that will provide the best return for the time invested and to exit yourself quickly from opportunities that provide a poor return or to refer deals to other brokers or banking specialists where you lack experience.

One method I have seen employed by numerous high performers with a constant flow of surplus leads, is to email fact finders to the prospective customer for them to complete (or if you aggregate through Finsure/LoanKit <- a gratuitous plug, email them an electronic client form that can be simply imported into your aggregator CRM).

Having your customer complete the fact find achieves a number of things. In addition to improved compliance, having the customer complete the fact find means they are more committed to the process and it saves you a heap of time. Occasionally you will encounter a customer you don't really want to do business with, and if they don't complete the fact find, it's an effective way to exit from the deal.

You want to work with most customers of course, so when emailing the fact find it's important to set a deadline for its return, by locking in the time for the next discussion. This keeps you in the drivers seat when the customer doesn't get around to completing the fact find. Most will complete it though.

Finally, at this stage of business, the broker intimately understands their numbers. They know what volumes and income they want to generate and how to make those numbers, they understand their business expenses and manage them tightly. They know what hourly rate they want to earn and how outsourcing various tasks in their business at a lower rate than their own hourly rate, maximises their dollars per hours worked. 

They are not scared to write $200,000 or more on a piece of paper, then chase that number down.

If they are generating surplus leads they understand the benefit of leveraging these opportunities by referring these leads to a sub-contracting loan writer at 50%/ no trail and creating a win / win for both parties.

Enjoy your holiday, but come back soon as there are bigger and better times ahead.