Factoring finance brokers educate and profit!
Over the years I have found that the main opportunity we have with our introducers is not dissimilar to that of our direct clients. The main opportunity is education.
When you speak to an introducer you will find that most if not all have heard of factoring. However, only a small cross section of introducers have a handle on the implications that factoring has on a client’s cash flows and profitability.
I had a conversation with an introducer where I was asking him if he had ever structured a cash flow or factoring deal for one of his clients. His answer was, “I have been broking for 20 years and not once has a client ever asked me for factoring“. My next question was “Are most of your clients PAYG?” His answer was “No pretty much all of my clients are small businesses”. Now this introducer could almost be forgiven for this school boy error (the error being an assumption that a client will ask you for factoring or debtor finance), but when you think about how he may have been able to solve many of his client’s cash flow problems without using their property as security over the years then you may think again.
Another opportunity we have had with many introducers is their fixation on what a product like this would cost. The reality is that cost is only a minor opportunity in cash flow financing, when the focus should be more on what benefit the product will deliver to the client. Now I know you might be thinking that this might be just a sales tactic, but factoring and cash flow financing solutions (I am not fond of that cliché but will use it anyway) vary so greatly that having a clear picture of the client’s situation is tantamount to delivering competitive pricing and an appropriate product.
So in our divine wisdom I am putting the finishing touches on an introducer training programme that will aim to cure some of the education opportunities we have suffered over the years. The programme will be about going ‘forward to basics’, yes I say this because the ‘basics’ of cash flow financing need to be mastered by any introducer who wants to be able to serve his clients. The course will also of course cover many advanced structuring techniques as well so there will be value for newcomers and old hands.
The interesting thing is that there is not much available to introducers in terms of sales training for this type of product. I have heard of a company selling a similar type of product for around $10k. We are not going to charge our introducers for it as we will derive enormous productivity gains from our introducers being better trained.
I will send out an email to our introducers in early 2009 asking for people to register for the training course. If anybody out there has anything they would like to see in the course let me know and I will include it. The whole introducer community could benefit from this type of course. Given the seismic shift in the introducer market, this course will be timely.
You can email me at [email protected].
And yes I have replaced the word ‘issue’ in this article for the word ‘opportunity’.