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The Perfect Business Plan
As anyone who has bolted out of their house clutching a leaking bag of garbage would know, if you don't have a good plan, you can end up with a stinking mess.
However, although getting tuna juice on your feet is not pleasant, the consequences of neglecting to take the trash out of your business are far worse - especially in the current climate.
So while lenders tighten their structures, conditions and commissions, and the industry prepares for a slow-down, there's never been a better - or more crucial - time for brokers to do a bit of tweaking themselves.
Have a plan
Step one is just to have a plan - down on paper, in black and white.
"I still find it surprising how many brokers don't seem to see the need to have a tangible idea of where they're headed," says Smartline managing director, Chris Acret.
"To say that it's all in your head is a joke - it just doesn't work like that. You have to commit it to paper - that's when you find the holes."
According to Acret, the current industry climate - especially in light of the changed commission structures - doesn't allow room for error, or blanks.
"There's no doubt that a lot of small-business people don't have a plan in place. That can be okay; in really good times, you can get away with it. But when things are more difficult, when commission cuts are coming in, it's more vital than ever to have a plan and to look critically at your business," he says.
Paul Ryan, Opportune Home Loans' CEO, agrees.
"Gone are the days when brokers could expect a deal to come through the door by itself. They have also lost 25-30% of their commissions, so they need to have a plan that shows them what they need to earn in order to sustain their lifestyle - and what that means in terms of income."
Starting out
A business plan isn't rocket science - at least, not according to the experts.
Although there is a myriad of formulas available to guide the novice, it does not need to be complicated. In essence it is just a document that outlines your business and your goals, as well as how - and when - you plan to achieve them.
"A business plan doesn't need to be 20 pages long. It's just about thinking where you want your business to go, what you're doing to get it there and putting it on paper. It's very much about outlining key things to do and bringing it down to what you're actually going to do," Acret says.
In light of this, a good starting point - whether it's the first time or the 10th - is to look at how your business performed in 2008.
"Any clever broker will have their fine-tooth comb out, examining their systems, processes, spending etc, to determine what worked and what didn't in 2008," says Mortgage Choice's senior corporate affairs manager, Kristy Sheppard.
"What might have worked with some tweaking, or in a different financial climate, is also important to observe," she adds.
"Look at your costs and at trimming fat off your business. Look at how you're going to generate more from your core business, what areas you are going to invest in - and also start looking at other opportunities for the year," Acret says.
Ryan suggests that once brokers have evaluated their business and have an idea of things they might like to try, they should give thought to where they want to head and what they want to achieve.
"Ask yourself: 'where am I today and where would I like to be in December 2011?' Then work backwards - 'what I need to do today, in March 2009, November 2009 and so forth, to give myself a chance of achieving my goals'," he says.
The 'light bulb' moment
But goals alone are not enough.
A plan - like your business - has to be individual and it has to reflect you. And the more time you put into it, the more likely you are to stick to it and help it thrive.
Acret calls this a sign of the 'light bulb' moment - and says a crucial part of creating a successful business plan is getting excited by it.
Conceiving a business solution yourself, he says, means that you have perfect clarity and understanding of where your business is headed and what to do to get it there -which is a great motivator.
"When you come up with a good solution - a good plan - you get a spark that you're going to do it. It's completely different from someone telling you what to do," he says.
"There is no 'one size fits all' format; it's more about what makes sense to you and how much it motivates you. You need to get excited - you need to see that light bulb."
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