Before the pandemic, while working for a direct funder I created a mastermind group for 5 ISO(loan broker) companies in the South Florida area that allowed the owners of these ISOs to learn some valuable information from their peers. Some of the most valuable I will share to provide some insight into the possibilities to grow your ISO business within a mastermind group.
How It Started
The idea for the mastermind started from the desire to help these ISO owners grow their businesses and learn all the things that worked as well as their pain points. This could lead to a better understanding of how to work with them more efficiently to fund more deals. I had past experience in participating in mastermind groups from my time as a Regional Business Consultant for a franchise so I thought to present the idea to a few of the ISO owners that I knew the best in the local South Florida area.
This was prior to the pandemic lockdowns so we wanted to all be close enough to meet in person.
The goals and plans for the mastermind group were discussed and finalized at the beginning to make sure everyone was committed for at least 6 months.
We initially did a group phone call to get everyone introduced to each other.
Then once everyone agreed, we had an NDA signed in order to make sure everyone was comfortable enough to share as much information as they wanted to with the group without any sensitive information being shared outside the group. General information like that mentioned in this article was fine.
We had an attorney amongst the members which made getting the NDA done easier. Even within the south Florida area, these owners didn’t see themselves as competitors given the market that they all competed was the whole country.
Process
We planned to hold one in-person meeting at one group member’s location every other month. The first one was held at Mass Capital Access. I won’t get into the names of other companies or members. Mass Capital at the time had a relatively large operation going, with over 30 people in the Florida office funding a high volume. They also opened a New Jersey office later.
At the beginning of the meeting, setting rules were important.
Everyone’s buy-in was needed before going forward to make sure the meetings ran smoothly.
We started off with everyone talking about what are the key questions they had for the group so they ensured they are getting something out of this process.
Takeaways
As the meeting went on, a couple of things were most prominent that came up from almost everyone, hiring and leads. These were the two biggest problems faced by these owners regardless of their experience in business lending.
1) Without being able to find the right people, they couldn’t grow and scale.
2) If they weren’t improving on the number of quality leads and data, they couldn’t reach the goals they had.
This may sound simple to some, but these were veteran business loan brokers running their companies for several years.
Problems with hiring included some thinking it was their geography in southwest Miami that lacked the quality candidates they desired. Another had a similar experience that resulted in them actually moving further north from Miami.
Another issue was how they were finding applicants. Some used the typical job search engines like Careerbuilder and others used Craigslist and LinkedIn. The job description and compensation weighed heavily in actually getting interviews.
A problem with many that were hired is they would just work for the base salary that was provided, even though it was low, without making much effort for the commission. Those types didn’t last long at all.
As for leads, this is every broker’s issue. Good or bad leads are subjective as long as the contact information is connected at a high percentage. Most agreed that once they have confidence in that aspect, then it’s the salesperson’s job to make the most out of the leads.
Still, there are varying levels of the quality of leads.
Some of the characteristics include if that person has expressed interest directly, how recent is the interest, are they prequalified in terms of revenue and business type among other data, and many more data points that are prioritized by brokers.
The mastermind group members discussed these two issues and much more at length at this meeting.
Conclusion
We had several more monthly calls for the group which was productive. However, at the 6-month mark, one owner was moving from the area. Another was traveling overseas for the foreseeable future, so the group was discontinued.
It is not easy to keep a mastermind group together for long periods of time. I know they all felt the group was productive and helpful but it ran its course for the small number of people involved.
Maybe a larger number could withstand a few dropping out over time. The return on investment has to be such that the members stay committed. The members really need to connect on a personal level as well to form a tighter group.
I have seen mastermind groups turn into lifelong business partners and friendships that shook up a franchise so there are powerful possibilities( more on why you need and how to create a mastermind group).
Creating a mastermind and keeping it together in the alternative finance space could do wonders for those group members.
If you are an ISO Manager for a Funder it might be something to consider.
If you own a loan broker business it is certainly something to consider.
Either way, be cognizant of two of the major issues ISOs face still today, finding the right people and finding quality leads.
