There you sit, one of the best Loan Officers at your company. Although you measure your career in terms of only months, you feel your broker/owner is clueless and you can do a better job than he/she can … any day of the week. Knowing this industry is a very entrepreneurial one at its core – you quietly plan to make a break for it, and jump up and start your own mortgage company. You know in your heart, you haven't been trained too well, but "sales is sales" you think, therefore you'll be fine in your own operation. Believing 'referrals' is the only way to attract potential new applicants (because you boss never did teach/show you any other method) you tell yourself, you've got all these referral sources, so how hard can it be to run your own firm, right?
Well, as an LO focusing exclusively on your own commission and sales – you frequently were thinking "I'm in this for the money, not the risk" – but now as a new entrepreneur that attitude should change immediately. You want your share of the American Dream, to own your own business (and that comes with lots and lots of risk), but lets do it right – instead of half-way like your current boss did!
There's a great deal of risk when you own your own shop, as well there should be. You're about to become a central figure in a drama about the largest single financial decision most families make in their entire lifetime. This is not the sort of place for you to 'learn on the job' while brutalizing consumers and any new employees, with your lack of understanding of correct procedures, or the many laws that regulate you and your new company, or your uncertainty of appropriate integrity & ethical issues you'll be confronted with. Being an owner/operator entrepreneur is nothing like being a ‘sales type' person, managing a business is different. If all you bring to the party are sales-skills, you're sure to fall flat – let's do it right!
With ample planning, in your new operation you'll probably want to hire employees like Loan Officers; then you should correctly W-2 them with a salary (paying all the proper payroll taxes naturally – just like a real business does – since we both know they're not really 1099 independent contractors – so why cheat them) and a bonus structure for those who excel in the performance of their job duties. Your focus should be teaching them to be ‘underwriter' types, since the true job of an LO isn't "selling" (like a car salesmen 'promise maker') but rather as a problem solver ('promise keeper') by putting each customer into the loan which best suits their family needs. When you inject into the LO/customer relationship "big commissions" you are absolutely asking for integrity and ethical issues to be in your face (the new boss) all the time. If your new LO's are salaried "employees", they can sidestep those common and widespread problems in your new company, and also you'll have more money yourself to pay for good working conditions, afford up to date equipment, advertise for customers, and pay your employer share of payroll taxes, benefits, etc.
Moving forward as a new 21st century employer, it's time for you to change the culture and tone of your own shop, since as the boss you're allowed to do that! By removing the big commission and sales attitudes from LO's you breed, it will tend to infect your entire enterprise. You'll quickly notice an enhanced feeling of personal dignity and professional pride, which you now see lacking with your present boss and fellow LOs. It's that sort of new direction you'll find fulfilling as an owner/operator; it in turn will help lead to a long running and stable company for you!
As an entrepreneur owner/operator there are many new things you must learn to be able to stay in business. Since ‘getting into' business is relatively easy, the challenge is to ‘stay' in business. Our industry has many so-called mentors, education, training, and consulting services where you can learn all those non-sales duties you have to know. I suggest, as you consider which advisor you'll select to help you, that you focus on their individual experience and industry accomplishments. Pick somebody that as an owner themselves, they've done what you want to learn – that's your best bet. Good Luck!
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