Plan Ahead for 2013

As we race through the final quarter of 2012, you are most likely taking advantage of the still reasonably low interest rates and closing as many loans as possible.

You have holiday activities to plan and other end-of-the-year responsibilities.

However, you should also be looking ahead and preparing for 2013. Even as you continue full force on making this a successful year, you need to develop your plan for the next one. For example:

  • Establish your initial 2013 production goals and determine what you need per month (number of contacts, meetings, closed loans) to get there.
  • Review your current plan, noting what has worked best.
  • Discard elements that weren’t as effective and add a few new ideas that you’d like to test.
  • Consider the resources you need to accomplish your strategies, such as a part-time assistant or marketing support.
  • Review your strategic partnership relationships with Realtors, builders, attorneys and others. Meet to discuss how they might be improved.
  • Establish your guidelines for monitoring the plan.

Of course, if you don’t have a formal plan in place, then you’ll need to develop one as soon as possible. While there is no one proven way to developing an annual plan, there are a variety of basic approaches. For example, one common planning option is based on the SMOST concept, with each letter representing a part of the strategic plan: Situation Analysis, Mission Statement, Objectives, Strategies and Tactics. Situation is an evaluation of your current status, including your customer base, opportunities and challenges; along with future considerations. The Mission Statement defines your company’s reason for existing—the overall purpose. Objectives are the steps you take to reach your goals, which are defined as the end to which all of your effort is directed. Objectives define what has to be done; strategies define the major actions necessary to get the job done. Strategies are usually your daily and monthly tasks. Tactics are the series of steps or tasks that support the achievement of a strategy. They focus on current activities that when consistently performed, achieve the strategies that will meet the objectives supporting the mission statement.

Craig Brown, CEO at Rancho Financial, San Diego, has developed a simple, yet highly effective method for developing his annual plan.  “I approach year-end planning for the next year in much the same way as I approach any problem or objective,” he says.  “I start with the big picture and then drill down to the details.  From a big picture I ask what the coming year is likely to be. For example, my opinion is that it may be more of a purchase market and less of an easy money refinance theater.  That may mean a ‘back to basics’ strategy.”

Brown then determines the specifics necessary to reach his goals. “Now I get down to what it will take to make an impact on my production,” he adds.  “It is important to stay within your competency to be good but you must push yourself.  Do things that may make you uncomfortable.  I like to make a list of the things I want to do and when I want to do them.  If I am going to target a few specific Realtors, I write their names down on paper, what activities I will do to create the relationship and then prepare all of the material I will deploy.  The market is going to be cutthroat so I feel the best thing I can do is the basics and do them well.  For example, that means calling each party in any transaction I am participating in at preset intervals. This will help me in my discipline and make a difference to the Realtors involved.  Executing very well on the basics will be my plan.”

As part of evaluating his resources and “basics” approach, Brown determined he needed to add to his already high level of expertise. “I recently went back to school to refresh my mind,” he says.  “We get stale, forgetful of what we know, and worse, lazy.  So I went to a three-day mortgage sales meeting and tuned up. It was a great reminder of things I know and exposure to many things I was not aware of.”

When Jon Volpe begins his annual planning process, he looks beyond the upcoming year. “I normally like to discuss a five-year business plan and work backwards to a one-year plan from there, raising the bar monthly to reach your annual goal, and raising the bar annually to reach the five-year goal,” says Volpe, Chairman and CEO of NOVA Home Loans, Tucson, Ariz.
“Once a financial goal is known, you can determine the number of units it will take to close on a monthly basis. Once you know how many loans are needed to close on a monthly basis, you can determine how many employees and positions are needed on your team.”

Another lending industry veteran, Linda Davidson, Senior Loan Officer and DE FHA Underwriter at Service First Mortgage, Garland, Texas, breaks her plan into seven elements:

  1. The Year’s Goals—The number of units she wants to close, how many prequals are needed to make the closing unit goal (based on prior numbers), where prequals have come from previously, and so on.
  2. Budget— Based on the unit goals, a budget itemizes payroll, marketing and branch expenses.
  3. Pillars of Business— “This is a mini-marketing plan for each referral source,” Davidson says.
  4. Operational—This is the necessary infrastructure/systems to accomplish her goals.
  5. Personal—This includes the “To Do” list, along with her personal goals, education and reading list.
  6. Team—The goals and disciplines for investing in her team, including education and training.
  7. Vision—”This is what we want our team to look like in the next five to 10 years,” Davidson says. “It’s a very important component, as I believe we should always start the year with the end in mind.”

Davidson develops her plan in an intensive two-day offsite session and then seeks feedback from her team members. “Once I have rewritten the business plan, I schedule meetings with each team member for the following week–to review the updated plan as it pertains to their specific positions and roles.   Upon review, we then finalize the business plan and add it to the appropriate Outlook calendar(s) so that every activity has constant reminders.”

Don’t start the New Year without a written plan. If you start now, you’ll have plenty of time to research and create an effective one.

By David Robinson

David Robinson is Associate Editor of Broker Banker.

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