EFFECTIVE HABITS - Building for tomorrow

The future has never looked brighter for brokers who know where they’re heading, writes Alex Whitlock, so make sure you’ve got your map

WHEN YOU’RE in the midst of the silly season, the last thing on your mind is planning for the New Year; in fact, the timing couldn’t be better.

2011 has been a year of considerable change for the industry. Every broker has had to implement changes in the way they run their business and this will likely have had a material impact on productivity, efficiency and ultimately profitability.

But make no mistake: With change comes opportunity – for those who are proactive. The changing market conditions, client preferences and legislative requirements that are one man’s poison can equally be another man’s meat.

Good brokers – and business people the world over – don’t let ‘tough’ market conditions dictate the success of their business. Smart operators recognise that poor businesses falter or fold when the going gets tough and that means greater market share for those that remain focused.

You only have to glance at the numbers in this year’s Elite Business Writers (page 21 onwards) to see that the top brokers have all increased their market share regardless of heavier compliance requirements and a patchy property market.

To ensure you adapt to the new business environment and capitalise on new opportunities it is critical to understand how effective you are in your day-to-day operations.

So, how do you go about reviewing your performance?

The obvious starting place is your volumes and how they compare with the previous year.

While property market performance, broader economic conditions and other factors all have an impact on your business, your revenue should always be heading north.

A year-on-year comparison helps to put market conditions in perspective and will serve as a platform from which to analyse the effectiveness of your approach to business this year, and where it can be improved.

In most broking businesses, the volume of business written correlates with the effectiveness of referral partnerships, client referrals and the generation of repeat business.

If volumes have declined or remained static, there is a good chance that something has gone awry with your lead generation activity or your client servicing.

Look closely at the productivity of your referral partnerships. Are they delivering a level of business with which you are happy?

If your referrals are under performing, consider first whether you are servicing your partners as effectively as you should. If you’re delivering on your promises but some of your partners are failing in theirs, it may be time to cut them loose.

Your time may well be better spent forging new partnerships with professionals who are willing and able to bring in new business while also focusing on your more productive relationships.

Equally as important for referrals are your clients – but for many brokers this is the most overlooked aspect of their business. Little compares with a warm referral from a satisfied customer, but don’t sit on your laurels and expect business to walk through the door just like that.

Review what you are doing to service your existing client base and what else needs to be done in the year ahead. Every broker has to actively engage with their clients on a regular basis and that means keeping in close communications with them through touch points such as newsletters, emails and one-to-one contact for a detailed review at least once a year.

Running an effective operation, particularly since NCCP’s implementation, goes beyond generating leads and enquiries. Look closely at the activities of your loan writers and administration staff to ensure they are working both efficiently and in line with compliance.

A review of your business may reveal you need more administration staff to free up time for you to focus on your clients, increasing volumes and building your loan book.

Perhaps you have considered these business issues already. But without putting pen to paper, it’s likely that any good intentions you may have will quickly fade. Contrary to what some people believe, planning doesn’t have to be onerous.

At minimum, record your goals for the year ahead. Then, based on the review of your operations, outline how you plan to achieve them. By doing this you will ensure you are among a minority of brokers that control their own destiny regardless of market conditions.