• Not having a business plan


“You should never go to battle before you’ve won the war on paper.” – Philip Kotler

I hate to use the cliche, but here it is anyway — ‘If you fail to plan, you plan to fail.’ My own experience is that the process of working through creating a business plan creates a clear direction for your business and clarifies your thinking. Personally, when I started broking I had no business plan and I meandered along as so many new Brokers do.


As I started to understand this industry better and the opportunities, I put the time into writing one and it gave me a clear direction and path to follow. The end result was that I grew substantially and for a time became AFG’s number one national mortgage business.

The mistake I made was that I got to the outcome of my business plan but didn’t go back to it and write a new one to take me to the next level. As such my revenues plateaued, with no real growth for a few years. Long story short, I went back to basics, wrote my new business plan and I am charging forward again.

There are many templates of business plans you can find online. ASIC provides them and there are even iPad apps you can use so it is always with you and you can keep updating it as your business progresses.

  • Thinking Commission Rate is More Important than Marketing Support “Quality is much better than quantity. One home run is much better than two doubles.” – Steve Jobs

Of course, every Broker wants the highest commission percentage they can get, but I would always prefer to have more clients and systems for increasing repeat and referral business over a higher commission rate. As such, I would always weigh genuine initial and post sales marketing support higher than commission rate when choosing a group to join.

It obviously depends a lot on the real results of the marketing support you get and how that translates into more clients and repeat business.

For the sake of argument, let’s say you get a 10% lower commission rate than you could get elsewhere, but instead you now get additional marketing support that generates just 10% more brand new clients. Why would you want to do more loans for exactly the same amount of money?

The stability of your business, and definitely its future value, is defined by the size of your client base and your relationship with them. A business with 1,100 clients is worth more than a business with a 1,000. You now also have 100 more chances for referrals, which can in turn lead to more referrals.

You also have the ability to generate additional income from these clients by having other revenue streams and products to offer them and 100 more clients that you can yourself refer onto your own referral partners — such as accountants, real estate agents, financial planners, etc., to strengthen your relationship with them and get more loans in turn from them.

Probably the biggest benefit will come from a better Post Sales Marketing system. If that returns just 10% more of your clients as repeat loans, that is a further 110 new deals and a stronger relationship with each client.

I’m not saying commission rate isn’t important, and you certainly need to look at the marketing support you are being given in building your business, that it is genuinely helping you get and keep more clients. But if you get that part right, the financial rewards will be there far beyond a few extra percentage points of commission.

Also, marketing is usually an area where economies of scale really kick in. Apart from the small additional expense of personalising it, it costs just as much to create a marketing asset for one Broker as it does for a dozen Brokers. For me, I can design a marketing flyer for a few hundred dollars, then it is very inexpensive for individual Brokers to tailor it to themselves.

My ‘7 Easy Steps to Mortgage Freedom’ book is a clear example. It cost many thousands of dollars and hundreds of hours of painstaking work to create, but it can now be customised to individual brokers for a couple of hundred dollars of graphic design work.

On top of the production costs, better deals can always be negotiated for media buyers with bigger budgets. Shared marketing is invariably more cost effective than doing it all by yourself. To continue the above example, when managed properly, a 10% lower commission across many brokers will result in a much greater return in genuine marketing dollars.