When you’re a broker trying to make decent living there are some traps you can fall into in the name of saving money that are actually costing you money. Being directors at Port Finance have given us insight into the ‘false economies’ to watch out for. Here are a few.
1) Save time
The single greatest resource a broker can have is time. If a broker spends too much time writing up loans or doing paperwork, they are not using their time efficiently. As soon as you can, employ someone to process your loans. Your time is better spent getting new referrers on board or looking after existing referrers.
2) Invest back into your business
We see many brokers that don’t invest back into their business. They don’t put on support staff. They spread themselves too thin and don’t service their clients well enough and end up losing some. By trying to save a buck they are actually costing their business enormously in the long run. Our advice is to divert a decent percentage of your revenue back into your business so that your staff and systems really help look after your clients.
3) Look after your existing clients
Around 20% of your business will be referred to you from your existing clients. This is a large chunk of your income. Never forget to look after your existing clients. Whether that is a bottle of wine at Christmas time or a birthday card, any gesture will make sure you are top of mind next time their friends or colleagues bring up the topic of loans. A relatively small investment in this group can reap large rewards.
4) Move out of home
Many brokers work from home to save money. Although moving to an office is an additional expense you will find the motivation and drive an office environment gives you will more than pay for itself. Consider sharing an office with a colleague or rent a space with a group of other sole traders. You’ll find just working around others will create numerous opportunities for you. Who knows, the guy that runs the local café may just be your next customer.
5) Take care of your referrers
Referrers are gold to your business. Look after them. They are sending the bulk of your business to you. Don’t try to save money by skimping on them. Find out what your referrers really like and make them happy. Are they into golf or fishing or perhaps red wine? Whatever it is, ensure your gifts are appropriate and personalised. If they think you care, they’re more likely to care about you and your business.
Andrew Baker, Voula Kotsiras and Anthony McDonald are the directors of Victoria-based aggregation group Port Finance