by David Bush

It is hard to develop objectives without a plan. Whether you represent a branch of a company, a division of a company or a company itself, you need a plan before you develop your objectives. In other words -

If you don’t know where you are going, how will you know when you get there?

Too many mortgage professionals are trying to just increase their income or build an organization without taking a closer look at where they are going. This is why it is important to develop a business plan.

Imagine for a moment a world without plans. No architectural plans, mechanical plans, city planning, business plans, etc. Are you envisioning a chaotic place to live? A place where nothing gets accomplished and nothing is trustworthy due to the lack of detail and an overall plan? Planning brings us organization, efficiency and security. When we work according to a plan we find high levels of success in completing the tasks at hand. So why not bring this same success to our personal lives?

What is a business plan?
A business plan may take many forms. If you are a large company trying to become a public company, you could hire a consulting firm to develop a business plan that will in essence become a prospectus for the company. In some respects, your plan should be somewhat of a prospectus whether you are selling shares or not. Ask yourself, why would someone want to invest in this company?

If you are a small company or individual originator, you certainly don’t want to spend thousands of dollars and/or countless hours developing a plan. This document can be very simple and many of the components may be documents you already have in your possession.

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The components of a plan:

At a minimum, the business plan would have the following components—

• A general description of the organization.
• A general description of the long-term goals of the organization.
• A mission statement.
• Listing of the major players and a description of their backgrounds. It could include resumes.
• An organizational chart of the company and perhaps sub-charts of major divisions.
• A more specific description of the business plan itself, which may include a financial pro-forma, production results and projections, delineation of the target markets, positioning, marketing and/or recruiting strategies, expansion strategies and more.
• There may be examples of marketing vehicles or other advertisements to support the marketing strategies and positioning statements.
• It may include a description of the compensation plans or other benefits that are being utilized to support the success strategies in the plan.
• It may include a description of the company’s quality control plan, training plan or other measures that are going to ensure the quality of success of the organization as opposed to the successful expansion of production.

Consider this simple ‘instructions’ on writing your own plan. Keep in mind that your own personal business plan does not have to be a huge document. It only has to include key components and serve as a guide to building a long-term mortgage practice. In addition, understand that your business plan is a flexible document that should change as your business grows.

Preface
Before you start your business plan, you will need to follow these critical preparation steps. First of all, you will need to answer some key questions that will become the foundation of your plan. You first need to know where you are NOW. What does your business look like today? It’s difficult to get anywhere if you don’t know where you are to begin with! The good news is that it’s relatively easy to determine this. You can easily establish where you are by answering these simple questions:

• What business are you in specifically?
• How many hours to you work per day?
• What is your prospecting strategy?
• What is your ‘conversion rate’? (prospecting leads converted to closed loans)
• An organizational chart of the company and perhaps sub-charts of major divisions.
• What product and services do you offer?
• How many hours to you work per day?
• What is your prospecting strategy?
• What is your ‘conversion rate’? (prospecting leads converted to closed loans)
• How much income did you make last week? Last month? Last year?
• Where is your business coming from?
• What is a simple profile of a typical customer
• What referral sources send you business?
• What is your sales process (if you have one)?
• If you have a sales process, do you use it with every customer?
• Do you keep track of your past customers?
• How do you keep track of them?
• How many past customers do you have?
• What do you send past customers monthly/quarterly?
• Do you send out "customer surveys"?
• What is your customer tracking system?
• What software do you use to support sales presentations, loan originations, marketing, processing, tracking, reporting and customer relationship management (CRM)?
• What is your prospecting strategy?

Answering these questions will expose a great deal about your business and where it currently stands. Remember, you must be aware of gaps before you can close them. Once this is done, you can establish your own ‘vision’ for where you want your business to go … and grow. You now have a shot at organizing the chaos.

Secondly, you need a vision for where you want to take your business. One of my favorite quotes is by author and aviator, Antoine de Saint-Exupery. He states that, "A rock pile ceases to be a rock pile the moment a single man contemplates it, bearing within him the image of a cathedral." Any vision can be achieved if it’s thought-out in advance, and broken down into bite-sized pieces. You must have a vision first, and then you can break it down into workable parts. Those workable parts will then be the map that guides you toward your goals.

Now that you know where you are, your vision can be established by answering these questions:

• Where do you see yourself in … 3 months? 6 months? 12 months? 24 months? or 36 months?
• What are the tasks you love to do?
• What are the tasks you hate to do?
• What about the mortgage business are you passionate about?
• How much money do you want to make?
• What office or company will you be working for?
• How many loans will you need to originate to reach your goals?
• How many loans will you need to close to reach your goals?
• How many staff members will be on your team?
• What referral sources will be sending you their business on a consistent basis?
• How will your business be set up?
• What systems will you use to build your business?
• How will your customers view you and your business?

It’s vitally important to answer these questions in as much detail as possible. The more detailed you are, the more realistic your vision will become!

SWOT Analysis
A SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis is a tool for looking critically at the organization.
Strengths are those qualities -- tangible and intangible -- which enable an organization to achieve its mission. These include human competencies, products, services and process capabilities.
Weaknesses are those activities, services or other factors that block the organization from fulfilling its mission.
Opportunities present themselves through the environment in which a company operates. They may be generated by the appearance of new products, new trends in the marketplace or changes in the competition.
Threats are external to the organization. Unlike weaknesses, they cannot be controlled. In fact, they exploit a company’s weaknesses and increase its vulnerability.
A clear picture of an organization’s strengths and weaknesses leads to a realistic understanding of the marketplace at large. A SWOT analysis enables business planners to make better-informed choices.

Competitive Analysis
According to business planning experts, conducting a competitive analysis involves taking the competitor’s point of view. It consists of:

• Developing a fact-based understanding of likely business strategy changes your competitors might make in coming months.
• Identifying probable competitor responses to changes you are considering.
• Forecasting each competitor’s probable reaction to changes in the industry affecting your own business.

Don’t restrict your thinking to companies similar to your own. Consider firms not presently in the industry that could overcome entry barriers without incurring great expense and those for whom competing in the industry makes sense from a corporate strategic viewpoint.

To design growth strategies for a competitive edge, look closely at your three top competitors. What are their business strategies regarding customer service? Pricing? Quality? Operations? Resources? Personnel? If you find them lacking in any of these areas, there might be an opportunity for your business to fill the void.

Lastly, you have to resolve to succeed. Understand that you are the driving force behind your mortgage business. Your business plan documents what you are about to accomplish. Now it’s up to you to execute the plan. Do whatever it takes to succeed! When it comes right down to it, the most important sale you’ll ever make is not to the customer you pursue, but the sale called YOU. The ability to persuade yourself that what you have is much more valuable than anything you’d ask back from the customer is the single most important element in your long-term success. Your ability to connect with your uniqueness, your potential, your attitude, as well as your ability to overcome challenges and grow is a key factor that will determine your success. This is your internal engine that will get you to persuade yourself to make the necessary calls when you don’t feel like it. This will drive your ability to motivate yourself and ask one more time after five or six ‘NO’s’. It will be your ability to withstand the arrows of rejection that we all face, and your ability generate levels of enthusiasm on a moment’s notice that will set you apart and make you a champion.

Now … let’s review: Make sure that you know where you are … have a vision for where you want to go … chart-out and map your course … and have an undying resolution to succeed! Your customers and referral sources will be the ultimate beneficiaries of your success! You’re now ready to start you business plan.

To measure and monitor the business plan:

• Conduct regular updates. Schedule progress reviews on a monthly or quarterly basis, depending on the level of activity and time frame of the plan. Challenge underlying assumptions. Continue to examine the plan’s underlying assumptions, the continued validity of its objectives, and the influence of unanticipated events.
• Create a “champion” for every strategy and action. The champion doesn’t necessarily have to complete the actions, but ensures that they get done.
• Stay committed. Every action must have a due date. Due dates can be pushed back, but don’t let them go away.
• Conduct short-term reviews. Schedule team “huddles” every 60 to 90 days to revisit the original plan, determine if objectives are being met and implement new action steps as necessary.
• Expand skills. Expand employee skills through training, recruitment or acquisition to include new competencies required by the strategic plan.
• Establish milestones. Build milestones into the plan that must be achieved within a specific time frame. Reward success. Find creative ways to motivate people and reward them for focusing on the business strategy and vision.

Above all, be flexible. Move ahead with the plan as designed, but be prepared to let go and switch strategies as necessary.