February 7th, 2012

Getting Started as an Industry Broker:  Step by Step 
     Consulting represents an opportunity for many in today's "jobless" recovery.  There are, of course,  many types of consultants but without question, few areas of consulting offer the income potential and ease of entry as consulting in commercial finance and specifically, factoring.  And, while the few training schools that do offer instruction to novice brokers charge exceptionally high entry fees, often $20, 000 or more, the fact is there is absolutely no need to pay such fees if you are willing to do a little research a work.   

A Knowledge-Based industry
     All consultants practice due to some 'special knowledge" they have regarding some subject matter and Commercial Finance Consultants are no different.  To succeed in the industry, you must develop a strong working knowledge of the many areas of specialized finance represented by the industry.  While factoring may be your "bread and butter" product, you will need to also learn about dozens of other financing alternatives. 

Step One:  Gain Product Knowledge
     The training areas of Campus IACFB will provide you with virtually all of the basic product knowledge you will need to begin an industry career and to start sending prospective clients to our portfolios at Aegis Factors and DMS Wholesale.  We are constantly expanding IACFB to assist our associates with their needs.  

Step Two:  Gain Marketing Knowledge
     One size does not fit all here.  Many industry brokers choose commercial finance due to marketing knowledge they have acquired in a similar industry.  Others are interested in a clean break from a current dead end job or profession and interested in establishing themselves in a new career where today's current economy is a help, not a hindrance.  Only you know your strengths and weaknesses.  We give you many marketing tips and ideas in the Campus along with some great suggestions for additional training.  Assess your strengths and weaknesses and fill in the blanks.

Step Three:  Office Setup / Website Setup
     One of the most attractive features of the factoring business is the limited need for anything other than a home office when you are first start out.  You will need a computer, printer, and fax machine as well as some filing space.  There are very significant advantages to leasing space in bank buildings or accounting offices but that comes later, after you have several deals under your belt.  

     You will need business cards and stationary from day one.  You will also need a well designed commercial finance website.  Your website is critical to both your networking and list building efforts. 

   Finally, you will need some good contact management software.  Unlike many types of consulting, there is no shortage of prospects in factoring.  All small businesses need working capital at some point.  Keeping track of prospects as well as those your are building networking relationships with is beyond the capabilities of sticky notes and business cards with rubber band around them.  Purchase ACT from Sage or FactorMax Guerrilla.  You must have a Contact Manager.

Step Four:  Join Organizations and Network
     For most brokers, networking is one of the more enjoyable aspects of the business.  Especially when you understand its importance and business development capabilities. Roughly 60% of all new clients put on the books are the result of networking
     As everyone knows, if you reside in a town of any size, networking at after-hours Chamber of Commerce events is literally "required" as a commercial finance consultant.  This is where you will meet hundreds of lending officers, accounting professionals, and prospective clients.  Never miss an after hours Chamber event where you can meet new people and develop better relationships with old.  You must be prepared (with suitable knowledge) as you meet those that can send business your way.  You only get one chance to make a first impression.

Step Five:  List Building
     For the first month, you will need to spend most of your time actually networking and beginning to build your lists of prospects.  You will need to spend time "grouping" your contacts in your Contact Manager.  Being smart about setting up groups will significantly enhance your future marketing efforts.  Be aware early on that a good broker in commercial finance will likely have 2,000 or more contacts to manage in just the first 3 years of operation.  Seasoned veterans often have as many as 10,000.  There is no shortage of prospects in factoring.

 Step Six:  Setting Up Conference Calls
     One of the truly remarkable aspects of the factoring industry is that there seldom is an actual "close" when it comes to the broker / prospect relationship.  In the vast majority of new clients being put on the books, the factor actually closes the deal for his broker.

     Factoring brokers are "Lead Generators".  They do not contract nor complete any real paperwork other than a standard "Company Profile".  In the real world, the broker's job is simply, through their various marketing efforts, to get as many Company Profiles completed as possible and then turn them over to the factor for closing.  You simply fax the profile to the factor.  Introduce the factor to the prospect on the phone.  Then sit back and listen!  if the deal is there, the factor will close it for you.  The more profiles you submit.  The more conference calls you set up.  The more money you will make.  Very simple.

Step Seven:  Open Checks
     Why is factoring called the "Jewel of the Industry"?  Its all about commissions or to be more specific, residual income.  When a consultant refers a new client to a factor, he is known as the "Broker of Record" and as such, earns a percentage of the factoring fees earned.  Since factors purchase invoices from clients weekly and earn fees when the invoices are paid, the Broker of Record continues to earn fees as well.  In many cases, the broker will earn a monthly commission check for 5 years or even longer.  An example of factoring commissions, can be found here.