It is crucial you change the way you operate, and choose the right business model, or the events of the next 24 months (and ultimately statutory regulation) could put you out of business.
What do McDonalds and The Body Shop have in common? A brilliant, proven business model. And nothing is stopping you from copying it and applying it to your own business.
The broker market is changing shape. MCCB registrations demonstrated that thousands of advisers have shut up shop, or changed their mode of business.
Within the last two weeks, the press has reported that life insurance company mortgage clubs are prospering: some journalists proclaim several clubs and networks are responsible for £3bn-£5bn of annual lending and that a couple of the biggest hitters exceed £10bn. Add to this the four or five leading aggregators, independent of life companies ‘ Mortgage Next, Mortgage Intelligence, Mortgageforce and TMO ‘ and you see that up to half of all introduced mortgage business is controlled by these clubs, networks and franchises.
But will the average broker survive by getting closer to a mortgage club, or by joining a mortgage network? Probably not, so proceed with caution and assess what value networks and clubs can add to your business.
We have also heard that embracing (some would say copying) a distinct tried-and-tested trading model is a sure-fire way to survive and grow safely.
Franchising is one version of aggregation which proves this, according to the British Franchise Association (BFA)/NatWest annual survey, as 93% of British franchisees are profitable (the highest figure ever recorded), whereas four out of five non-franchised businesses go bust.
Brian Smart, director-general of BFA, said: ‘This year’s survey provides overwhelming evidence that franchising is one of the safest, most sustainable routes to running your own business.’
Sometimes we have to realise we would be better off adopting someone else’s proven concept ‘ provided we can ‘own’ our business. Franchising provides a blueprint for a proven business and this core business model has had the benefit of millions invested in its creation and development.
Franchising is one way to get your business in a position to survive the massive challenges ahead. But don’t take my word for it. Just ask Domino Pizza, Alldays, Bang&Olufsen, Pitman Training ‘ the list is endless.
Robert Clifford is managing director of Mortgageforce