Maximizing Your Deal
Here are five things firms look for in a candidate. Pay attention to these and you will be able to command the highest price for your business.
- Production – most firms will not give “deals” to fourth or fifth quintile producers unless the production is greater than $300K. Bonuses are based on the “trailing twelve” months of production, not last year, not a projection for this year and not what you think you’ll be doing in five years.
- Fee-based business – brokerage firms make more money on fees than they do on transactional business with far less risk and overhead. The prospective firm is buying your business as well as you and this is the most desirable kind of business.
- Clean U-4 – if yours isn’t clean, be up front about it. The prospective new firm is going to find out before they can hire you. The same holds for your credit history and arrest record. If you try to hide something, people always wonder what else might pop up later. Minor dings can be overcome.
- Focused business – be able to explain what you do, how you do it and how you plan to keep growing in the future. (i.e.: have a business plan)
- Portability – selling proprietary products may endear you to your current firm but they often make you harder to move. Besides, most proprietary products underperform – so why are you subjecting your clients to them anyway?
Be prepared when you decide to seriously look. You’re a salesperson – know your product (your business).
- Know what you want – don’t bring new demands every time you come to the table.
- Know what you bring to the table – what are your proven strengths (not what you think they’ll be in the future)?
- Be reasonable – if you’re really worth it you can get a lot but it helps to know what is doable before you meet with a manager. Most of the stories you hear from other brokers are exaggerated. (Hard to believe, isn’t it?)
- Use a Recruiter – you reduce your value by walking through the door by yourself.
- Deal Components – learn the options.
- Recent Deals – what’s been offered lately?