Scaling a mortgage business is about adding the right resources to accelerate profitability. With a scalable structure, the increased profits are sustainable and outpace the rate by which the resources were added —emphasis on outpacing.
Increased revenue isn’t the only reason brokers look to scale their business. Improved productivity, reduced work hours, and better work/life balance are additional benefits of structuring a business for scale.
So even if you’re a broker that prefers to remain a “boutique” or lone operation, structuring for scale will help you achieve the golden egg of higher income with fewer work hours.
It’s just a matter of knowing how to get there.
Contrary to what you may believe, scaling has as much to do with obstacles as it does with opportunities. Here’s why: there are predictable challenges at every level of your broker career, and overcoming them is how you scale up.
The challenges are so predictable that one might say they’re a symptom of needing to scale up.
So let’s look at the Four Stages of a Mortgage Broker Business, the specific challenges at each phase, and which growth tactics scale you up to the next level.
Obstacles and Tactics for Scaling a Mortgage Broker Business
Sole Mortgage Broker
This is where everyone starts once they break out on their own, assuming you started as a loan officer, as many brokers do. You’re hustling and honing your sales techniques, getting so good at it that you have a fairly regular stream of new borrowers.
The challenge is that you are doing it all on your own. Advising and processing loans take up the bulk of your time, leaving less time for prospecting. Stagnation is further amplified if your workflow is fragmented due to poor automation.
The result is a cap to your earning potential and the overwhelming feeling that you’re working too hard for your paycheck. Reality check: you are working too hard for it.
The first step to leveling up is recognizing that scaling means investing in both a loan processor and the mortgage software to collaborate with them. At first, the investment may seem too high –especially in the case of the processor. However, keep in mind that scaling accelerates your revenue. Many of our clients have found that combining a mortgage point-of-sale system with a single processor can double their income.
Just remember that the point of adding the processor and tech is to free up your time for prospecting and nurturing more loans. In other words, get comfortable with delegating tasks to your processor. Forget about doing it all.
Mortgage Broker + Processor(s)
At this stage, your income level has risen significantly from your sole mortgage broker phase. You have one or two loan processors under you, freeing up your time to bring in new loans, and advise new clients. The problem is that the business structure is still shaky. The daily operation remains your responsibility. Marketing, planning, lead generation, and delegation push you to capacity, and you’re back at work more hours than you can healthfully sustain.
Scaling can go one of two ways from this point, and it depends on what you envision for your business.
If you prefer to remain mostly independent with support, then you’ll want to add another processor and perhaps an executive assistant or office manager. The goal of scaling up in this example is to minimize your time and energy constraints.
On the other hand, if you envision an expanded operation, one with additional brokers, you must be intentional about the growth. Have in place a practice-wide strategy for hiring, training, lead generation, and revenue-producing activities. Have a clear understanding of KPIs in lending and how to use them to measure each broker’s earning potential.
Note that mortgage automation and productivity tools are even more critical at this level, no matter which way you decide to scale up.
Mortgage Broker + Team
In this phase, you have a defined workflow and work culture. Team members have their specializations, know what’s expected in their role, and have a thorough understanding of the metrics by which success is measured. Management and productivity are constantly evaluated and adjusted to ensure that the team reaches their potential individually and collectively.
At this point, it’s a given that you have enough brokers and processors to meet the demand. You’ve also implemented mortgage automation software to support lead generation and processing. You’ve expanded it to ensure optimal practice-wide collaboration and a corporate-branded Borrower Journey.
Therefore, the need to scale from a mortgage team to corporate is typically the result of management reaching its threshold. The general manager layer would expand to specialized managers (sales, marketing, operations), and your corporation is born. Training and corporate-level mortgage tech imperative for scaling.
Mortgage Broker + Corporate
The main challenge at this highest level is multi-layered management –essentially managing the managers who are managing core teams. If you haven’t moved into the position already, you may have hired a CEO to oversee the operation. Metrics, strategies, and execution continue to evolve under the foundation of strong leadership, culture, and technology.
Your income potential flirts with the just plain ridiculous.
Scaling is a Predictable Process
There aren’t many things about the mortgage industry that are predictable. When to scale and the tactics for doing it are some of those predictable things –as is the indispensable need for mortgage technology that activates scaling at every phase. Request a demo today and see why mortgage brokers across the country partner with us for success at every level of their mortgage career.