Mortgage Broker

CMBA Kares 18 | fall 2018 cmba-achc.ca CMB MAGAZINE successionplanning M ost mortgage broker entrepreneurs who start a business don't initially think about selling it someday. An exit strategy is not something they think about while they are building their business base. As an entrepreneur, you should create a business with your exit strategy in mind. Building a business that somebody will buy from you requires skill, dedication, market research and the right timing. Many or most mortgage brokers dream of the day when they can sit back, kick up their feet, relax and enjoy the rewards of their hard work. ey may be thinking they'll slow down and work less, or they may want to retire altogether. Either way, they have one of two options for when that day comes: A. Create a business that runs on its own and provides its owner with consistent cash flow – a company with very little dependence on the owner. B. Sell the business to a third party for fair valuation, based on a multiple of the brokerage's revenue or earnings. But most of the time, these businesspeople either end up with a business that is much more dependent on them than they expected, forcing them to continue working and not retire at all, or the valuation they get on their business is far removed from what they thought it would be worth. In recent months I've spoken with many mortgage brokers who are thinking of selling their "book of business." I asked them two simple questions: "If you le your business for two months, would it run by itself?" and "Would it be able to grow on its own?" eir answer was a firm "No!" Most believe they can sell their business for cash and sail off into the sunset. Many mortgage professionals' practices however are reliant on the business owner, making it really difficult to sell. e question they then asked me was, "How do we build a sellable business?" How to build a sellable mortgage-based business don't assume you'll be able to just walk away – unless you take these five steps By UrMa MolleMa, owner Ivy leagUe BUsIness ConsUltIng InC. 1 Delegate operations. Your operation needs to function without your being there. is means you may have to hire employees and train them to handle the responsibilities in your office. 2 Build systems and processes. To better train your team, you've got to build systems and processes and you must document your processes. Your processes should be clear so that if any employee leaves, another can step in and carry on without too much trouble. 3 Set up a solid sales team. Focus on creating a sales team that can bring in a solid share of revenue so that your business can operate, and grow, when you are not there. Your sales process must also be documented. 4 Know your avatar. Too many brokers build a business where they are a jack of all trades and handle every little thing a client needs. To maximize the value of your business, you are better off focusing on one or two areas where your business can do really well. 5 Know your numbers. You need to measure and track all of your numbers in order to sell your business. You must be able to show real cash flow. You need to have the sales ratios so the buyer can have a reasonable expectation regarding the amount of revenue their investment would generate. is is a work in progress, and it will take time, but once the model is created correctly your business will give you more freedom and satisfaction than you could have dreamed. Here are FIVE things I suggested they do in order to build a business that sells:

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