The small business finance industry is evolving and
a key part of the industry of the Brokers that work in
it. Probably training a broker is one of the most important things
in order for you to succeed in this industry today. I'm
talking to a CEO that has trained Brokers
for over a decade. He shares with us the importance of
training and it's impact.
Thank you
so much for joining us man. I'm really excited for this conversation. So first
thing go ahead and introduce yourself and who you're with I'm
Jared white with United Capital Source. We are a
Marketplace broker in business for 13 years. We've
helped to unlock 1.2 billion dollars for
over 28,000 businesses Nationwide. So you've been
open for 13 years how many years have you actually been in the industry?
I've been in the industry since 2006 overall. I
mean if you can give me an exact number
or an estimate how many Brokers have you trained?
between my
first stent in the industry and then United
Capital Source. I've easily trained over
a hundred brokers.
Over a hundred Brokers. So this is the question of this
entire video. Yeah, the most important question is
why is it important for Brokers to
be trained correctly in this industry?
so I think
the general answer is that Brokers need
to continue to be trained throughout an industry.
And what happens is there's an initial training which
is just a familiarization of general terms
product knowledge and funders and
Banks, right? And so as things have progressed in
the industry, like disclosures and different states becoming
more aware of those things new training has had
to become available with different verbiage making
sure that you're saying the right thing make sure
you're advertising the right way making sure that you have certain data
protection certain Insurance's and your folks
need to be trained in all of those areas. All right. So you
said something really interesting that specifically Brokers need
to be constantly training constantly learning
new things. So what exactly does that
look like for your company or just in general in the
industry, especially with the industry changing and evolving?
So I'll tell you both right in our company. We do a
continuous training. We have executive training for
our management. And then we have sales training for
our sales staff that's mid-level as well as new entry
and what that looks like for us is a continuance of
working on folks weaknesses and
building up folks strengths in understanding
what products they're selling who the clients are
that they're talking to the different funders that
they're working with right and then separately on a management
side, you're not just training product you're training how
to deal with people.
So let's talk about a freshman Brokers someone that's brand new
to the industry that knows it can make a ton of money. What specific
material or training program. Do you implement to
help out that freshman broker? So immediately what
we started to do is get an spfa certification done.
And so that's a broker training to become spfa
certified which means that you understand the different
industry lingos terminologies the
different state regulations you understand.
How to exactly explain the different products as
well as deal with any reject, you
know rebuttals or or anything like that and so after
a general basic spfa certification, which is
just a kind of general knowledge of the industry then my
folks go into what UCS is
training is and that's a more in-depth training which
generally takes about 90 to 180 days
depending on the person and then continue training
thereafter, which is about anywhere from
once a week to two times
a month depending on the classes that we have them
take so it's not just a simple like hey, like here's how
to cold coffee people that know there's much more to the
industry than that. Yeah. I don't think many people that
I know either way our cold calling anymore. Anyway,
I think what's happening is people are generating demand through
referral Partnerships or online or through different
relationships. And then from there they're talking
with a client that
interest most of the states
that you deal with right now have pretty strict rules about who you
can cold call times. You can call and things like
that. So I think you're going to see changes in and around that
stuff.
So let's talk about money. I mean everyone gets in this industry because
everyone wants to make money and and this is a very
profitable industry. So what's let's talk about the ROI for
a brokerage regarding a broker that's
been trained properly versus someone that has no
training at out or that hasn't undergone training. What
is the ROI?
You know what? I would say for our shop, right? Each of
our folks has to hit a minimum of 25,000 gross
margin per month in order to cover.
sgna their salary right their leads
kind of their expense as well as their commission and so
for me when I
look at that, I think that if I'm able to invest
let's say seven to $10,000 and have
someone create $25,000 off of
that and help my expenses and pay them then that's
a pretty good Roi for me. So one to
one and a half times if someone's just starting a brokerage and
and they're opening up their shop.
How much money should they have set aside for training
alone? What does that look like? What would be that
number? You know? Okay. So for us we had five figures
to six figures set aside just for training just for
training alone. Yeah, and so it's it's what
I would say for someone that wants to start a brokerage if there's
100,000 or less of equity capital
Partner up with a bigger broker.
Partner up with a bigger broker immediately. Learn how
that person works and how that person trains build a
book. And now you have Revenue coming in from your renewals.
And then you have X amount of money to
start building out the right way if all you have is time anyway,
and you're starting a brokerage, what's the difference?
Right, like do just do it the right way and start
six seven months lower.
So what's the biggest mistake of freshman broker
can do when they start off in this industry?
Calling themselves a funder, right?
Tricking people that they're not a broker and I
think ultimately, you know marketing the wrong way, right? But
what is marketing look like so for me marketing the
wrong way looks like email blasting the world without
understanding who your email blasting cold calling the
world message dropping the world.
Setting out this huge net in the masses that you don't even
know what you're trying to catch and then what comes back in is hate
Fus. Why'd you
call me? I'm not even a business. Hey, I'm in this industry. Why'd you
email me?
And that person really has the worst start ever right
versus methodically sitting down and saying hey,
here's my dollar amount. This is what I have to start with.
This is what I need to make monthly.
And then backing into that equation. So if
I need to make X monthly how many deals do I need to close? Okay,
so I need to close this many deals. How many phone calls I
need to make for that to turn into x amount of applications to
x amount of closed deals. And once you have a formula down that
you're executing on that's when you build out
most people don't have a set formula when they're starting out
and that'll just Crush any business. So let's
talk about finding Financial products. I mean,
you sell Financial products how much of the sale is about
priced versus other factors.
So I think every sale starts out.
In the consumer's mind
the business owners mind as price anyone shopping.
Anytime looks at Price first, so that's evident. Right?
I think what it boils down to is understanding first why
the client needs the money?
And then understanding from there how often they turn their profit
and what their profit margins look like and understand
their affordability and then you can start to
discuss different products.
Where price may be irrelevant depending on exactly what they're
executing on and so it's really important to find out a
story and what a person's looking to do and build out
what that business plan and blueprint
looks like with the funding so that you can back into
it and sometimes something that looks expensive doesn't seem
so expensive anymore when it's played out and practicality.
So how important is relationship selling
relationships selling is the most important? I
think that in a world where everyone is offering pretty
much in and around the same thing, right?
People go with who they trust and who they like and who
heard them and who didn't over talk them and who
didn't try to shove money down there throat, right? And and
so that's what we tell our folks and our staff
is to make sure that you're hearing someone and really
have an 80/20 rule where 80% of
the time that person is talking and 20%
of the time you're talking you really need to be listening the
majority of that phone call and absorbing what the person is saying
to be able to help the right way.
So for a broker, that's that's just starting in
this industry. How much can a broker
make their first year?
I think a broker can make six figures in their first year selling
the right way and and
building the right.
Model, I think it's really difficult to make seven figures.
In your first year in a brokerage unless you're investing.
250 to 400,000 up front
and creating a bigger start for
yourself. If you're talking about a soul broker or two person shop starting.
You know, it's probably gonna be a six-figure shop. If you're selling the
right way and you're not overcharging clients
and you're not banging people over the head with heavy closing
costs and stuff, which is pretty round upon these days. So so in making
sure I continue to say and doing it the right way. That's how
much you would make are there folks that can make that kind
of money doing it the wrong way. Yes,
is it short lived double? Yes.
So let's talk about training. I mean that is like
the key thing that we've heard time and time again that people
like Brokers aren't properly trained. That's right.
So what would you say is the right
way to train a broker? Like what specific things would you
say? Hey a broker should have X Y
and Z in order to succeed in this business. Yeah. So
I think a college degrees are
relevant.
Right. I don't think that actually matters for this
type of business because there's other types of certifications and training
that give you the knowledge to succeed in this business, right but
I think in general a broker should have definitive General
product knowledge in and around you know,
the
The five six popular products in the space, which is
SBA Loans business lines of credit equipment financing
merchant cash advance.
term loans and accounts receivable financing
and so people should understand those products all
the terminology in and around those products
the pricing the commission's how they work how
defaults work in those products, right? That is a ton of
knowledge in general from there understanding who
buys that kind of paper. That's a whole
another week's weeks of training and understanding
who fits and buys that kind of paper.
We have really.
Good technology in-house that Aid our folks
and to looking at that right but there's lots to be a general understanding of
it and then from there understanding reading
financials.
That's a whole separate thing. Right? So we have classes in-house
that I hold for my folks about how to read financials and
we look at tax returns and beat and and balance sheets
and profit and loss statements aging accounts receivable and
payables the debt schedules and understanding how we're supposed to
be looking at this so you can have an educated conversation with someone about their
assets and actually suggest something that they don't even know
they qualify for you can save someone's life that way right. So
it's really important to have that general knowledge and
Education First so Brokers starting out. It's products.
Credit terminology and what banks buy
those are like the four main main
things you absolutely must need to know and then financially, I
mean how much should a broker spend on
continuing education?
five figures a year
for each person right per person. So for
us depending on your size brokerage, it's a six-figure spend,
but that spend you
should be seeing.
A jump in your production from your
people right where you should be justifying this
spend. It's not blind. So you should see our
people are executing today and then how they sell six
months from now and 12 months from now and see that difference where
you understand that what you're doing is providing a benefit in
general. You're seeing an Roi on that regardless and that person is taking
what they're learning and transferring it
into other areas of their life and negotiate their home differently than negotiate
their car differently. They speak to their spouses differently. It's like a
real benefit for like their whole life to have this continued training. Is
there anything else you want to say about training and about the industry in general?
I do I think I think just really keeping training for a mind is
something that everyone really needs to focus on I want
everyone to really focus on what the spfa certification
is doing because I think that's a foundational training that
that we know for a fact different state
senators and governors are looking well upon
and so it's giving the right info that
the industry needs and so folks that are new ex.
This thing should continue to focus on that certification. My
team has been doing it and is doing
another one March 1st, just to continue to keep everything fresh
and these things happen yearly. So it's
not something that you need to let slip and I think
if someone's doing that and they're operating the right way with full
disclosures in mind, then you'll have
a successful business.
So Jerry, thank you so much for coming in. Nobody. Thank
you, man, and I know this information is gonna
be very very helpful for people watching. So again, thank
you so much for joining. Thank you.