Factoring 202
Gauging Success with Business Development
Factoring 202
Gauging Your Success in Business Development
The business of becoming a factoring broker/consultant is a business opportunity like many others. As business opportunities go, however, few can actually compare with that of factoring consultant.
As part of America’s business finance community of lenders, factors are unique in the way they actively solicit referral business and also by the method in which they compensate for a referral. It is these industry characteristics that, for certain types of entrepreneurs, open the door for a true “business opportunity,” especially for those with the necessary skills, allowing them to enter and succeed as business consultants specializing in alternative commercial finance products.
For those who possess the skillsets needed to succeed as an industry consultant or who are willing to train and develop them, a successful industry entry is more than possible, and this is an entry that can mean a dramatic change in lifestyle.
Gauging Your Success in Business Development
Plain and simple, success as a commercial finance consultant (CFC) means, at least for most, a significant lifestyle change. For example, you will never again worry about job loss. As a CFC, you control your own destiny, working the hours you want and from any location you desire. A few years ago, a Princeton University study found that success in business that generated a certain level of income had a direct relationship with the “happiness” of that person. The amount of income identified as that benchmark was $75,000 earned each year.
So, how does the $75,000 come into play? The Princeton researchers found that incomes lower than $75,000 per year did not cause sadness itself but made people feel more grounded in the problems they already had. The study found, for example, that among divorced people, about 51% who made less than $1,000 a month reported feeling sad or stressed the previous day, while only 24% of those divorced and earning more than $3,000 a month reported the same level of sadness. Most people will agree having money has a significant effect on a person’s general happiness and well-being.
What It Takes to Earn $100,000 per Year as a Consultant
While Princeton researchers peg the “happiness factor” at $75,000, industry-wide, success as a freelance factoring Broker / Commercial Finance Consultant has routinely been gauged at earnings of $100,000 or more per year. For those familiar with the business development side of the industry, that figure is considered as a “right of passage” for professional, full-time consultants. So, what does it actually take to earn $100,000 per Year as a factoring broker? With a standard commission rate of 10% of the factoring fees earned, you will be required to refer clients to factors that will finance between $2,000,000 and $3,000,000 of receivables monthly in total. For example, 20-30 clients factoring $100,000 in invoices per month will get you, the broker of record, to the magic $100,000 mark. As a successful factoring and alternative commercial finance consultant, you will, of course, refer all types of clients. Some will be very small clients who will be factoring just $20,000 to $30,000 per month, while others will be much larger, factoring $200,000 to $500,000 per month or more. The mix is irrelevant. Your goal is $2,000,000 per month or more in total receivables factored to reach this goal.
Unparalleled Income Security
Another significant benefit of success as a commercial finance consultant is income security. Unlike most professions, such as real estate agent, where commissions are paid just once on a sale, factoring commissions paid to brokers are residual and life of account. It is not unusual, for example, for a broker to earn commissions on a referred account for three years, five years, seven years, or even longer. Such income streams paid on a residual basis through factoring represent solid passive income you can count on month after month and year after year in many cases.
Working From Any Location
One of the most appealing characteristics of becoming a factoring broker / commercial finance consultant is that you can operate from virtually any geographic location, and rest assured, many brokers do, and this is especially true of those practitioners who generate a majority of their business from consultative selling through networking and relationship building. Can you, for example, work and generate a prospective client or two from the pleasurable comforts of a cruise ship while vacationing in the Caribbean? Absolutely. Can you rent an apartment and spend the cold winters in Florida or California and the hot summers in the Pacific Northwest or New England? Without question. Can you travel the U.S. in an RV writing a business blog, meeting business owners, and referring clients? You certainly can. Realistically, so long as you have a laptop computer, you can work from anywhere you can get internet access and meet business owners, bankers, accountants, etc.
Almost Any Lifestyle You Can Imagine
So success as a factoring consultant and reaching that magic $100,000 per-year mark means a lifestyle change for most and a lifestyle that few can imagine. Job security, income security, and the ability to work from any place on the planet are a recipe for happiness found in very few other professions. What makes the business of commercial finance consulting so appealing is that these attributes are obtainable by anyone willing to put forth the effort and develop the skill sets necessary for success.
