This is the time of year when most originators, managers and company owners focus on plans and goals for 2015. But there is a big difference between hoping for a good year and actually planning it out.
Below is a roadmap or GPS you can use for business development in 2015.
Too many originators hope rates will stay down, or they will meet this agent, or find that magical source of business we all look for. But you must start your year with a realistic plan. You must then monitor your plan monthly and view your business strategically. In the balance of this article I would like to share with you what I do annually and have shared with thousands of other originators.
Step 1: Let's start with some basic numbers and determine how much we "realistically" want to earn and how that can happen. For simplicity sake let's start with a goal of $120,000 in annual income which breaks down to $10,000 gross per month.
Now let's look at our closings last year and determine what our average loan amount is. For this example let's say the average loan amount is $250,000 and you are earning 60 basis points per loan.
Your average commission per deal is $1500 which means you would need to close 80 deals a year or six per month.
Step 2: Now the question is where will you get six loans? I like to think of this as a marketing chair meaning you should have three or four methods that constantly produce business for you and that you are constantly actively involved in. Sources include referrals from real estate agents, accountants, credit unions and others; or marketing direct to consumers, including promoting niche programs and sending materials to residents of apartment complexes.
You need to assign a number to each of your marketing efforts to determine how many loans you can realistically generate from each of these sources. As an example perhaps you will get three deals from real estate agents, two from other referral sources, one from the direct to consumer efforts, and one from partners like accountants or credit unions. Only you can determine which ones will work for you. However, it is critical that you give this some thought and write these down. Then place it where you will see it daily.
Step 3:Much like the road map we discussed earlier you must know if you are on course each and every month or if you have gotten off track and need to readjust.
Create a spreadsheet that uses the following headers: month; source of business; client's name; and loan amount.
At the end of each month you can now assess whether your plans are working out as you had hoped. If they are that's great and just keep doing what you have been doing. However, if they are not working out you now need to learn why. Is there something you can tweak or do you need to replace that area with something else?
Here is a major short cut, along with a big mistake to avoid.
Having been in the business almost 30 years and managed, coached and consulted with thousands of originators and managers, I want to share the mistake first.
Are you familiar with the Pareto Principle, which is also known as the 80-20 Rule. We often spend 80% of our time working on the things that produce only 20% of our income.
Now I want you to go back and look at all of the loans you closed last year. Once you are done go through all of the pre-qualifications or pre-approvals you did for the year.
What do they have in common?
Where did those leads originate?
Instead of "hoping" to grow your business you must instead focus like a laser on those tactics and referral sources that did work for you last year. Did you find a certain source that produced a lot of calls or pre-qualifications but not a lot of closings?
Did you find a real estate agent you wrote a lot of approval letters for but didn't close many loans with?
While we are on this topic here's the final metric you should think about.
How many leads do you need to close one loan? If you received 200 leads during the year and closed 50 loans you need to improve that ratio and look out for the tactics and people that are wasting your time and creating 80% of your work.
Before you go grab a sheet of paper or go to your computer and start creating your 2015 Roadmap. Then go back and follow the three steps!
Hope 2015 is your best year ever!
Brian Sacks is a nationally renowned mortgage expert who has career closing of over 5,924 transactions. He has trained tens of thousands of loan officers and company owners over the past 29 years on "How to Close More Loans Make More Money And Still Have A Life." He has put together a free report on The 4 Tools You Can Use To Immediately Grow Your Business at
