Can changing one aspect of your business increase profits while decreasing the time it takes you to get a deal funded? Yes it can. Garry Egan explains how one transition can change the way you run your broker business.
Here’s how to change your leasing broker business activity level from frantic to fun, and the hours you put into it from punishing to productive, without ever having to worry about finding funding again. You can do it easily with one fundamental change that doesn’t cost any money or depend on the economy in any way. In fact, this one change is the surest way to deal effectively and profitably with whatever economy you find yourself in.
Now, please note that I didn’t say it was an easy change because it’s not. It’s not easy because it involves internal change — changing yourself — and self change is one of the hardest things to do because it involves giving up ideas and habits. Ideas and habits we’ve clung to for a long time become like old shoes to us; comfortable to wear but not always as supportive or as good for us as they should be and they rarely allow us to look our best or put our “best foot forward.” Yet that’s exactly how most broker businesses operate on a day-to-day basis. They use well-worn, comfortable, marketing ideas regardless of the fact that many of those ideas are artificially holding the business back by keeping it from achieving maximum productivity.
I regularly talk to equipment leasing brokers who describe themselves as being incredibly busy but not really satisfied. They’re doing all the things they’ve always done. They have long lists of vendors and are continually prospecting for more. They’re in regular contact with and receiving updates from a wide assortment of funding sources and are regularly attending industry conferences to meet even more of them. They’ve got more deals in the pipeline than they ever imagined and can’t imagine how they can do more — but they’re not making the money they’d hoped they’d make and they’re wondering when the fun and freedom parts of being their own boss will start to kick in. If that describes you and your business, it doesn’t need to.
Believe me, I can understand and relate to all of it, but it hasn’t described my business for years. Not since I came to understand the unspoken but fundamental view I had of my business that was driving all that activity and its attendant frustrations, and then decided to change that viewpoint. You can do the same thing.
You see, without ever making any conscious decision or effort to do so, far too many equipment leasing brokers have drifted into a mindset where they see their business as one of “finding funding for the deals they’ve got” as opposed to “finding deals for the funding they’ve got.” Ironically, it’s a much harder way of working, but because brokers get used to it slowly they continue to subject themselves to it and be held back by it.
Change that one paradigm, though; change the way you look at your broker business, and virtually everything else about it changes for the better. All the real productivity of my business came when I made that change. I’m talking about the kind of productivity that allows you time to enjoy your business and time to take off and get away from it. I’m talking about the kind of productivity that allows you to increase your income at the same time you decrease the hours you spend generating that income.
Here’s why it’s so effective and, therefore, so important. How you see your business determines who you see as your customer and who you work for. When you see your business as finding funding for the deals you’ve got, you’re “working” for whoever generates those deals. That’s not bad, in and of itself, as long as whoever is generating them has your best interests, your time, your productivity and your profitability foremost in their mind. Do they? If most of your business is called in by vendors, I’m going to suggest that’s not the case.
Can you honestly say that your vendors a.) understand the economics of your business fully and b.) are fully committed to making sure your time is spent exclusively on transactions you can get approved and funded? That’s exactly what determines the productivity of your business, isn’t it? You have a limited number of hours per day, week or month to invest in it and your profitability is determined by how productively you spend them. How many of them are focused on transactions you can get approved and funded? Any of that time that you spend searching for funding for a transaction that a vendor calls in to you is being spent selling the same transaction twice; once to the vendor to get the call, and then again to get a funder interested in it.
The single biggest productivity gain you can give your business then is to change that view; change how you see your business, and change who you’re working for. Start seeing your business not as finding funding for transactions you’ve got, but rather as finding transactions for funding you’ve got. Now you’re working for your funding source not your vendor. Right away, that does two things for you.
First, you know what your funding source will approve so as you find transactions for them you only have to sell the transactions one time, to the customer. You simply quit investing valuable selling time in selling transactions to someone you don’t know in advance that you have a virtual certainty of getting approved.
Secondly, as a byproduct of that, your stock in your vendor’s mind will soar. As your approval rates go up, (and remember your whole sales strategy is now aimed solely at prospects you already know your funding source wants to approve), you become more trusted and valuable to that funding source and are more likely to be able to craft custom programs that can give you a real marketing edge.
Okay, here’s how to do it. Take responsibility for generating your own leads. It really is that simple. Now, I know some folks think I’m anti-vendor, but I’m not at all. I have excellent relations with many quality vendors. I simply don’t rely on them to tell me who I should work on. I am only against spending any of my valuable selling time on any sales lead unless I’ve targeted that lead because I know in advance I’ve got funding available for it. That’s extremely hard to do if you rely solely on vendor-referred business. The vendor probably doesn’t have your time on his high priority list. I’ve frequently heard leasing brokers talk about a deal they suspected they were wasting their time on but they were doing it to satisfy their vendor. How does any marketing strategy that requires wasting their main business resource, (their time), make economic sense for their business? I can’t see it.
If you could get back the time you spent in the last 12 months working on transactions that never got funded, what would you do with that time? If you could get back the time you spent in the last 12 months searching for funding sources for one-off type transactions, what would you do with that time? I’m going to suggest to you that if you could only cut those times in half, it would give you all the time you needed for a wonderful vacation or to work on more productive transactions that could make that huge profitability leap you’d like to see in your business. I’m also going to suggest to you that most of the stress in your business, the drudgery of your business, came from those two activities. Am I right?
I can promise you this with 100% certainty and from personal experience; to the degree you control the generating of your own leads, you directly control your approval rates. To the degree you control your approval rates; you control the effectiveness of your time. To the degree you control the effectiveness of your time, you control your profitability.
I’ve been in the business long enough to have been through multiple ups and downs in the economy. I give primary credit to my ability to have weathered those changes to having made this one fundamental change in how I saw my business. Because I concentrated on finding transactions for funding I knew I had and because that led me to take responsibility for generating my own prospects instead of relying on other people to tell me who I should work on each day, it was easy for me to quickly adjust whatever I was doing in order to move effectively into markets that survived. They survived and so did I. You can to.
Gerry Egan has been owner of TecSource, Inc. for 16 years, and has been arranging equipment leases for more than 30 years. TecSource® brokers leases, holds its own leases and manages leasing portfolios. Egan is a past-president of NAELB and a frequent presenter at industry conferences. Egan can be reached via his training site, www.realworldsalestraining.com.
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Everyone has heard the saying about doing things right vs doing the right things. Being really good at doing something that doesn’t matter, doesn’t really have much benefit. But the lesson is not about making a choice; it’s about understanding the two “rights” and doing both to be more productive.