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ISCOVER
The world is always changing, and our industry is certainly no exception. However, it’s worth keeping in mind that whilst you can’t change the market, you can change how you respond.
Accordingly, now is the optimal time to use turbulence as a core driver to adapt to your business to facilitate growth and enable longevity.
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We encourage brokers to give mutual consideration in how to amplify activity whilst ensuring your business is lean and tight. Here are a few areas for reflection:
- “If you always do what you’ve always done, you’ll always get what you’ve always got.” Not anymore. There’s a reason diversification has gotten so much air play – particularly in the perfect storm of the royal commission, housing correction and upcoming federal election.
There are four core ways to diversify:
- Become a specialist and collaborate with other specialist brokers in complementary spaces and refer each other business.
- Become a one-stop-shop and champion spot and referrer. Invest in understanding “who’s who in the zoo” of alternate funding. Get across their solutions and corresponding customer profiles to ensure you know which lender to approach when referring deals that fall outside of your core area. This can be quickly escalated by attending industry events, as well as achieved via osmosis by reading industry e-bulletins and publications.
- Identify a complementary niche to your current business, identify the lenders in the space and commit to the sector. Asset finance, commercial loans (particularly SME) and specialist lending are growth sectors, and good places to start.
- Align with an accountant. There is a tremendous and largely untapped opportunity for broker/accountant partnerships. This model provides the solution to a common challenge whereby an accountant identifies that a client may benefit from financing but does not have the resources nor appetite to fulfil directly. The upside of this symbiotic relationship is a happy, loyal customer for the accountant and more business for the broker.
Independently of which strategy you adopt, be sure to communicate your approach and its benefits to your clients to proactively generate business.
Consider a mix of phone calls, in-person meetings, social media and e-newsletters to get the word out.
- Drill deep into your data. You’re immediately going to have the upper hand if you provide a solution before your clients knew they needed it. Basic data analysis, it’s something that every broker can easily access but few prioritise. It’s also often one of the quickest ways to drum up business and aid retention. As a starting point, batch clients based on broad criteria, such as loan type, loan maturity, whether they’re an SME and/or whether they have multiple loans.
Match each segment with a strategy, for example:
- Offer asset finance to clients with a residential loan
- Raise refinancing when a loan is reaching its maturity
- Suggest alternate funding solutions to SMEs (who notoriously find it difficult to obtain finance)
- Outline how debt consolidation could be advantageous in the instance of multiple loans
- Actively manage your exposure. Ensure you have a realistic grasp of your business’s vulnerabilities. Take a hard look at all your costs, processes and infrastructure, and plug in the gaps. In particular, be brutal about overheads and consider investing in technology/systems that streamline operations (including CRM software). It’s also a good idea to meet regularly with an accountant to review cash flow, asset acquisition and tax planning.
And above all, be calm yet astute and use the relative chaos as a catalyst for improved performance and growth.
