Like it or not when markets go through a down cycle, businesses often cut costs. Sometimes their cut's make no logical sense, but other times they can be brilliant. Many of you are self employed like myself, and the one who makes decisions on cutting costs usually comes down to ones self.
My partner and I probably had are highest production month ever (12 years), but this business was generated before the past three week mortgage meltdown. Like most of you, we are really looking at what cost's we can live with and which ones we need to eliminate.
Right away we noticed that we spend far too much for lunch. For example, we normally go out and eat at local chain restaurants, the standard bill usually runs about $10-12 dollars when you include a modest meal, drink and tip. I'm sure some of you pay far more. So the other day I noticed a mini-fridge on sale for $109.00 at Best Buy. I then called my partner and we both went in together on the fridge. We figure we'll save (23 business days x 11.00 avg lunch - 23 business days x 2.50 frozen lunch) $195.50 every month. That's a grand total of just over $2300 a year! Holy cow we're spending allot on lunches!! I guess if we were inviting another referral partner out each week it would be a different story, but even in that case you'd still save money because most sales agents do not eat out with clients every day of the month. Finally the cost of the fridge is pretty much paid for in the first month!
Another area of concern was what we were paying for marketing and education materials. Don't get me wrong, you should never cut costs when it comes to marketing, that's if the marketing is paying off in terms of incoming business. A great way to track this is to fine-tune your database to the point where all marketing is coded so that you can keep close track of what worked the most effectively. There is nothing worse then flushing dollars down the drain for ineffective marketing. As for educational materials, I often see loan officers go to these conferences and sign up for 4 or 5 guru's mortgage educational services. Yes these programs have value, but when times are tough you may want to master one guru's program at a time. I'm sure this sentiment wouldn't be popular at the next Todd Duncan seminar, but bottom line, how many of these seminar programs can you really implement in the first place. If you want motivation, there are plenty of motivational speakers and services that you can pay far less for on the Internet, Amazon or carefully picking the guru program that best matches your sales style and sticking with that program. Allot of these guru's will speak at each other seminars but only if they get a chance to pitch their programs as well. So you can end up spending allot more then you anticipated if your not careful.
Some other suggestions are.......Stop paying for cable TV at the office, you can get on-line market-watch updates through your Internet service anytime you need it and most of the time it's free! If your a mortgage professional you may want to consider pulling one credit report instead of 3 when first analyzing a new clients credit. If they meet the first round of pre-qualification questions, then you can always pull the other two bureau's and merge them together.
There are probably many more ways to shave costs. Partner up with another person in the office, pay for one office instead of two. If you have a cable modem, perhaps purchasing VOIP phone servicing would be cost effective for all your long distance calls. Maybe that Razor phone isn't so important this year, perhaps another old reliable will do just fine.
Thrifty isn't a word most mortgage professionals understand. But if it's good enough for the rest of the American public, then you may want to consider it yourself. The other solution is to work harder and close more loans!!!
Karl Christen Credit & Liabilities Planner
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Hey Karl,
Good points. I know I have been looking at ways to cut costs and ever dollar regardless of how small all add up to make a difference. A big savings that I found was converting to an e-fax and do away with my dedicated fax line that I had with Sprint....Saving equaled $53.00 a month. The e-fax is only costing me $7.99 a month. I also cut back on my cell phone usage and make an effort to use the land line more often. If a person thinks about ALL of their monthly expenses and write them down I sure they can find numerous ways to cut back.
Sean Allen
The Mortgage Professionals
Professional Credit Consulting & Repair
www.TheMortgageProfessionals.Biz
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