The Discipline to Say No [Small Business Feature]

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A couple months ago the Mortgage Broker News asked me to write an article geared towards mortgage brokers to be published in the CMP Magazine. You can check out the full article as it originally appeared in CMP Magazine Issue 9.4 on Page 19 of 68 emag.

I got thinking, the advice I had for other mortgage brokers who might be getting their start in the mortgage industry would be the same advice I would give any small business owner. As First Foundation deals with a lot of small business owners, I figured I would post "The Discipline to Say No" on the #OwnGrowProtect Blog as well. Enjoy!

The Discipline to Say No
Image from CMP Magazine Article.

The Rule of 80/20 Applied

Regardless of what you call it, the Paleto Principle, the Law of the Vital Few or the Rule of 80/20, the understanding that 80% of the effects come from 20% of the causes should be a driving force behind how you manage and grow your mortgage business.

In 2006, I had been operating a profitable delivery company for just over 3 years, I had 8 full time drivers and serviced around 50 restaurant clients. My biggest problem… How do you grow a business when you are already working at full capacity? Taking on more restaurants meant taking on more drivers, more drivers meant more headache, more headache meant more stress (not necessarily more money). I was starting to burn out and was looking for answers when I heard the rule of 80/20 described this way…

“80% of your income comes from 20% of your clients”.

What have I got to lose? I decided to test this theory out in a very practical way. I dropped from 50(ish) restaurants down to 6 and cut my staff from 8 down to 3, figuring that taking a 20% pay cut would be worth eliminating around 80% of the hassle. As it turned out, after 6 months of tracking the money, my ability to service my best clients more efficiently actually generated 20% more income! I was making more money, running a tighter team, providing better customer service with less stress in my life. How was this a bad idea?

I started brokering in 2007 in Regina, a time when the mortgage fairy was liberally distributing mortgage applications to everyone. Simply having a broker’s licence gave you the ability to print money. My first couple years were nice, then 2009 showed up… a complete market pull back from the American crash of 2008. The deals were no longer flowing like they once were. It was at this time when I decided to revisit the 80/20 rule and figured why not apply it proactively?

“I did two things, first I looked for a strategic advantage in the marketplace and then I looked internally at my own numbers to see where my 20% was."

Most of the advertising being done by other mortgage companies seemed to outline every mortgage product imaginable in a single ad space. I realized that most brokerages wanted to be everything to everyone and took a generalist mindset leaving an opportunity to market myself as more of a specialist.

I went back and looked at all the mortgages I funded from 2007 to early 2009 and compared types of funded deals to applications taken that didn’t fund. I found that overall I was funding roughly a quarter of applications while I was only closing 9% of “B deals” compared to 60% of mortgages for first time homebuyers.

It was at this time I decided to get really specific and focus all my efforts on targeting first time home buyers using social media and content marketing. My experience had already taught me that the key to effectively reaching your ideal client is to make yourself completely available to them while making yourself unavailable to everyone else.

To target the right clients, you have to say no to the wrong clients.

I stopped doing B deals, rental clients, self-employed clients, commercial files and reverse mortgages so that I could work with needy first time home buyers. Sure, it was hard to turn away business at the beginning and it was hard to get past the idea that turning away business was a good business strategy, but it actually turned out a lot better than I had anticipated. Here is what I noticed over the next couple of years.

By becoming a specialist, I no longer wasted time with the wrong clients, rather I focused all my time securing the right clients. And when I secured the right clients, I was able to spend more time with them and provide an amazing customer service experience which in turn led to referrals. Now, the real magic happens when you get referrals from referrals, It’s like pushing a snowball down a steep hill. Growth is exponential.

By the end of 2012 I had more than doubled my income and was closing over 55% of the applications I received (up from 25%) while maintaining a 95% funding ratio at my top lenders. By specializing, not only was I dealing with more consistent client, I was a more effective broker. How was this a bad idea?

In 2013 my brokerage was acquired by First Foundation and I took a position as the executive editor of the #OwnGrowProtect blog and principal broker in Saskatchewan. And now in 2014, I am pleased to have recently accepted a position as VP of Sales and Marketing at First Foundation.

"I have come to believe that we are defined not only by what we choose to do, but also by what we choose not to do."

It was when I turned away over 80% of my wrong restaurant clients to better serve my right clients that my delivery business took the next step. It was when I realized that I was effective with first time home buyers and stopped doing business with everyone else that my mortgage business doubled in efficiency.

What about your business, are you a generalist or a specialist? The specialist has the discipline to say no.


If you are a small business owner and would like to talk about marketing or marketing strategy, I would love to have a coffee with you! Contact me anytime.


I am wearing a kilt right now. I have consumed coffee today. Family Man. Innovator. Follow me on Twitter @kiltedbroker | Formerly the Executive Editor of the First Foundation #OwnGrowProtect…

Learn more about Jackson Middleton