There is this concept in economics called "Economies of Scale" and it applies as much to Real Estate and Mortgages as it does to manufacturing.

The concept is simple: let's use a soda-pop maker as an example.  You might think that the soda company would want to produce as many bottles as is possible, right?

Not necessarily...

There is a point when making soda becomes prohibitively expensive.  Let's say that after one billion bottles, they have to start importing foreign sugar and relying less on recycling.  The price to manufacture shoots up and up.  Thus, profits are cut into and production is stopped in the interest of max revenue.

For the nerds:  The above graph shows profits ("a", the vertical line) maximized at "quantity one."  You can see that as quantity goes up (Q2), profits go down (a2).  This can be applied to just about any business.  There is a point when enough-is-enough.

I am currently experiencing what is known as Diseconomies of Scale.

I have more business than I can handle; I am slammed.  Finding reliable help is difficult; people are so flakey...well, let me just stop there:  It's difficult.

Of course, I am determined to grab every deal that I can get, because I was always taught to "make hay when the sun shines."

But my long-time clients have to wait longer than normal for a return call back.  Also, I've made some tiny mistakes.  Nothing that has cost my clients any money, but I've definitely cost myself some money.

So here I sit, ready to start another day, and just getting organized with emails and voicemails is a major part of my morning.  I must get fifty emails per day-- in the first half of my day.  All require written responses-- nothing canned.

I think I lost two Realtors that give me business.  This is because they see how busy I am and assume that I can't handle their loans.  Of course, they are wrong, because their loans take special precedence, but try convincing them of that.

So, ironically, both Realtors are considering sending business to another loan officer who has been doing this for only a few months.  This is supposed to be my best year ever!  What happened?

I am actually harming myself with all of these clients, rather than helping.  Deals are taking longer to close also, because my lenders are also experiencing diseconomies.

Here is a great quote from Yogi Berra (aren't they all great?) supplied by Karen Anne Stone (New Home Hunters DFW): 

"That restaurant is so popular that nobody goes there anymore."  ~YB

Ha!

Anybody else experiencing Diseconomies of Scale?

~Michael George