Doomsayers have predicted the demise of the 'one-man band' brokerage, but those in the trenches say they’re doing just fine. Here's how they make it work.
As regulations tighten and costs rise, doomsayers have predicted the demise of the 'one man band' brokerage, but those in the trenches say they’re doing just fine.
Patrick Chidambaram runs his own broking business from home, and says it never crossed his mind to join someone else’s business. “It probably comes from not being a team player,” he jokes.
Chidambaram operates with no admin or processing staff, and says he enjoys the freedom of being responsible to no one other than himself and his clients.
“No sales meetings, no targets. If one can work smart one can streamline the process and have time to enjoy the lifestyle one creates.”
Nicole Cannon, director and founder of Pink Finance, was the sole broker in her business for four years, and just recently brought on two new-to-industry brokers.
Before starting Pink Finance, Cannon worked for seven years in two different brokerages, and says the benefits of having her own business are countless.
“I’ve found that having my own brand I’m just being myself, and I think that’s just been so wonderful. I’ve really moulded my business around who I am, what I am, what my values are and that’s just made me so honest. I’m just doing exactly what I love for the right reasons.”
Cannon initially had the intention to start her business with a partner, but was encouraged to go it alone by others in the industry.
“It was a massive leap of faith, but I’ve never stopped thanking them for making me believe in me. Having that support within the industry has just been so wonderful.”
THE RIGHT TEAM
Cannon also has support from her loans processor who she says is the “backbone of it all”.
“I love her with all my heart and soul. Having that backup support is just crucial because it is very, very difficult if you are 100 per cent on your own to give yourself that true and real time out which you really need.”
She says bringing on two new brokers has been a learning curve, as she'd become so accustomed to operating as “me, myself and I”, but says a partnership with a real estate company has allowed her a good source of leads to offer her new brokers, making the transition easier.
Daniel O’Brien, founder and sole loan writer at PFS financial, says he could not physically keep up without the two full-time admin staff that he employs.
“NCCP requirements have definitely made things more time consuming from a paperwork perspective. Without the help of admin staff, it would be very hard to successfully operate if you’re taking two to four applications a week plus meeting with other potential prospects. I do eight to 12 applications a week and could not physically do it without two support staff.”
O’Brien, who wrote over 300 loans in the last financial year and is number 20 on MPA’s top 100 brokers list, says sometimes he wishes he had another broker on board.
“I am spread pretty thin at times. I have amazing support staff, but it would be great sometimes to have another me, a broker. Maybe just a nicer and more patient version though?”
The Sydney-based broker says he is planning to hire a third member of staff to work two days a week, but stresses that sole broker businesses should be cautious when it comes to growth.
“Don’t expand with the hope to get to the next level. Get to the next level via working harder and longer hours, then expand. Prove that you have grown before you hope to, essentially.”
BUDGETING IS CRUCIAL
Cannon also warns that brokers wanting to move away from larger companies and start their own businesses need to be able to budget for the first six to12 months with very irregular income.
Having strong networks and a robust, well-focussed business plan are also crucial, she says.
“There’s so much business out there and you’ve just got to tailor it to you. If you do stuff that’s very uniquely you, you’re not selling yourself, you’re just being yourself, and people pick that up.”
While Chidambaram understands where the doomsayers are coming from, he suggests sole broker businesses can support each other, without losing their independence, to survive in a difficult market.
“A few one-man brokers band together under one banner operating separately and problem solved. That’s pretty much what aggregators do now anyway.”
Cannon adds that, while support from a strong aggregator group is a huge help for most sole-broker businesses, there are a number of brokers that are successful completely independently.
“There are individuals out there who, on their own, are settling over $100m per year. They’re doing fine, they’ve got plenty of business, they don’t need to be part of a major group in order to succeed. It’s all about what your drive is, because you can be successful as a one-man-band or as part of a group.”
While Cannon admits there have been times when she’s thought it would be easier to return to working for a company, she says she couldn’t be happier she took her "leap of faith".
“You always have those days when you just go ‘Why am I doing this?’ But I think anybody does, regardless of whether they’re in a PAYG job or a self-employed job. I let myself go through that, and the next day I’m loving it, I’ll have some really lovey feedback or a wonderful review and you just think ‘This is why we do our jobs, this is why we do what we do’.”