Planning For The Future

Planning For The Future

Set ranges instead of specific goals that encumber you

BY DAVE HERSHMAN | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

I have been in the mortgage industry for almost 40 years. Among many other things, this makes me old. And for all these decades I have been saying that the one constant we have in the mortgage industry is change. This year, with the onset of the COVID pandemic, we have taken the concept of change to another level. But the constant of change remains the same.

For example, many ask me questions like – what does the average loan officer make in this industry? I answer with this – there is no average loan officer. Some make $20,000 and some make $900,000. You can’t get a statistical average from two ends that are not in the same stratosphere.

Likewise, there is no average year in the industry. It is either feast or famine. It used to be we have a refinance boom for a year every decade or so. Now it seems the cycles happen much more frequently. I am actually tired of telling people -- you may never see rates go lower than this -- and being wrong.

So how do you plan for this chaos? With a very open mind. Long ago I abandoned the static numbers approach to planning. What is the static numbers approach? Here are some examples:

• I will do $20 million in volume next year

• I will make $150,000 next year

• My company will make $1 million in profit next year.

Long ago I abandoned these statics for ranges. For example, instead of saying that I will do $20,000 million in volume next year, I might say:

• My low target is $16 million in volume next year (Conditions, no refinances – moderate sales volume)

• My medium target is $20 million in volume next year (Conditions, moderate refinances – moderate sales volume)

• My “reach” target is $24 million in volume next year (Conditions, good refinance volume, strong sales volume)

Obviously, this is a simplistic example. The volumes are not likely to be symmetrical and they don’t have to be limited to three scenarios. And this is only part of the equation. We have started with the results, but not the actions necessary to get us to the results. Want to attain your "reach” goals? What actions are you willing to take? And how do you hit the high end if an assumption changes?

In my business planning exercise, I always try to take a look back because that gives me a hint about the future. I ask my students two questions:

• What factor(s) hampered you last year?

• If you had a “do-over” what would you do differently about these factors?

The answers to these questions will give you a good idea of what needs to change for the year coming up. You can’t go forward without looking back and making adjustments, because you can’t plan for the future with a blank slate.

As good as the business was this year, I sincerely hope that we never ever again have a year like we are having in 2020. But it is just a reminder that the new year will bring new challenges. To be ready for these challenges we must drill down and assess where we have been, where we are now and where we want to go. Most of all, we need to be ready for just about anything to happen. Because anything could happen.

Dave Hershman, senior vice-president of sales for Weichert Financial Services, has published seven books.