What happens when the music stops?

“If you aren’t having fun, you are doing it wrong. If you feel like getting up in the morning to work on your business is chore, then it’s time to try something else.” Richard Branson 

Over the last year many brokers around the country would have felt this way. I know that crushing feeling in your chest when you see an industry that you love and have devoted decades too, almost be wiped out with not even a right of reply. But we are moving forward and will continue to deliver what is right to our clients and meet their interest first! 

But what about you? What questions did you ask yourself over the last 12 months? I know that at 4.23pm on February the 4th 2019 when the RC dropped its bombshell I asked myself a lot of questions (and swore a lot) about my business, its future and just how prepared I was. How much had I thought not just about why I am in the business I am in but what am I building and what will happen when I want to move onto the opportunity?

Over the last year I have spoken to 1000’s of brokers and the same questions where being asked, but I was afraid many did not like the answers. Porter’s five forces include one around barriers to entry. I have often spoken about how easy it is to get into the mortgage broking industry and how low the barriers have been, Brickie Monday, Mortgage Broker Friday! So over the last decade we saw a mad rush into the industry that put us at a saturation point at just over 17000 brokers around the country, with the majority all having an honourable intent to deliver to their clients and run a profitable business. 

So if getting in was easy, how about getting out?

Just how easy is it to leave the industry? Is it like leaving the firm? Maybe ask Harry and Meaghan. Is it as easy as just selling a trail book for a multiple of 1.5 -2.5 times? What if I have staff, business partners and other ongoing obligations? 

With the clients that I coach or when I run a masterclass we always talk about growing and scaling your business. But before we get into the how, I always ask about the why. Why do you want to grow and more importantly what do you want to grow your business into? What will it look like from a revenue perspective, what will be the value you need it to be to provide for the next phase of your life? Do you want to sell and get out or do you want to transition roles (get off the tools) from broker to business owner & manager who runs and leads a business that provides you an ongoing dividend? 

I have found that very few brokers have given it much consideration; in fact most have given it none. With the potential for trail to be removed in 2022 and a fundamental change to the business model most of you only know, is now not the perfect time to plan for your future, or a least give it some greater levels of consideration. 

So if you don’t know where to start here are some questions I would like you to ask yourself;

• What is may exit plan?
• Do I see myself writing loans for the next 3, 5 or 10 years?
• What is my goal for the business?
• What return do I need?
• By when?
• How will I keep myself on track and who will keep me accountable?

Now I don’t expect to see a mad rush for the door. In fact I see a great future for our industry as we continue to evolve, as the needs of the consumers do. But like in the Lion King there is a circle of life. New brokers will enter and existing brokers will leave. I know we spend a significant amount of time and resources working to provide a smooth transition into the industry for the new players, but we also need to make sure we support, educate and prepare those that are looking to make a change.