Given all the trouble the mortgage broker industry has been through in the past three years, if a loan officer went up to his or her friends and told them he or she was opening up their own shop, the LO would get back a very puzzled look at best.
Yet, now may be the time to open your own business. Many brokerages have shut their doors and the affiliated originators have left the industry for good. While many have been saying that anecdotally for a while, the licensing numbers coming out from different states show huge numbers not renewing.
And the reason for the small broker shop remains the same as it did before the industry had its massive growth. Banks cannot be all things to all people. They want to serve the lowest common denominator, leaving wide swaths of consumers looking somewhere else for a loan.
But for many originators, it's not the mortgage industry knowledge they lack, but it's the general business knowledge that they need before opening their doors.
Cynthia Kocialski, who has started three businesses of her own and has written a book about startups, has some suggestions.
Among her tips to new entrepreneurs are:
• It’s not about the product—Start-ups are not about the technology or product. The product is the heart of the company, but the product no more makes a company than a heart makes a human being. There are many components to a company that all have to work together harmoniously in order to achieve a success outcome, she said.
• Don’t be afraid to discover—The early stage start-up process is a discovery process, not a step-by-step execution process. Many first-time entrepreneurs believe you come up with a great product idea, then they come up with a detailed business plan and finally they hire the people to execute the steps in the plan. Discovery is simply a starting point from which the product and business with evolve, iterate, and be refined.
• Retool and revise—In reality, the worst work you will ever do is the first work you do. Press forward past the first iteration, and make use of the lessons you learn along the way.
• Build your team—You need a team, but not just any team. You need the right team for that stage of a company's life. You wouldn't hire a college professor to teach kindergarten. For that, you need to find early elementary teachers. Ditto for start-ups. Find the right people for the right job, as well as the right attitude and stage of their careers to make them a match for working with a start-up, said Kocialski.
