Starting your own brokerage: Insights from those who have taken the leap

Every year, millions of people around the world take the big leap and start their own business.

For some, it becomes the most rewarding decision of their lives. For others, it simply results in frustration and financial strain.

It may be that you’re considering ditching your full-time salary and taking the plunge — but before you hand in your resignation and print your first business cards for a new brokerage, it’s worth taking advice from those who’ve already been through it.

I spoke to several leading entrepreneurs from the property finance broker world in order to get their advice on going it alone.

Most people wait too long to make the jump. The reality is that you will never feel fully ready.

Timing is everything — or is it?

Having watched England v Ghana in the World Cup ‘patiently’ playing it from side to side waiting for the right time to strike, the question arose as to whether there is ever an optimal time to ‘go for it’. In that match, no one seemed to find the answer.

At the start of our careers, we can feel too inexperienced; at the mid-point we may have children and a mortgage; and in the later stages we may just feel too old to make a big change.

As Matt Martin at Align put it: “Most people wait too long to make the jump. They want everything perfectly packaged and in place before the time is right. The reality is that you will never feel fully ready. If you believe in yourself and those you are setting up with, then just go for it!"

Building a ‘little black book’

Property finance is a relationship-oriented business, and there are literally thousands of other brokers with entrenched relationships with borrowers and lenders competing for a finite number of deals

With that in mind, one assumes you would need a large amount of contacts before giving up a salary.

Not necessarily, according to the experience of Danny Nota. When he started Hybrid Financial he had “no prior experience as a broker and no ‘little black book’ of clients.

“Business was painfully slow in the beginning but, looking back, I’m glad I weathered the storm.”

Facing up to the reality

Is the grass actually greener when you make the jump? Before making a move, it’s worth looking at the daily life of business founders, especially in the early stages.

One aspect that many do not consider is the amount of time needed for non-core business tasks. Running a brokerage is not just about deal closings and ‘making it rain’.

As Chris Borwick at Capital B explained: "Nobody warns you how much headspace the admin and compliance side eats up — you're doing things you never even thought about when you were employed.”

Setting up a new business is “not for the faint hearted”, according to Adam Stiles at Helix Structure Finance. Aside from anything else, from now on you’ll always be the one dealing with the printer issues.

Nobody warns you how much headspace the admin and compliance side eats up.

On the clock, round the clock

Ever since ‘Blackberry culture’ changed our lives forever, there has been growing awareness of the difficulty in separating work and home life.

Callum Taylor at Portway put it this way: “I think the greatest thing that you are not aware of when you’re employed is the pressure and inability to switch off.

“Holidays where you actually switch off, evenings and weekends relaxing with the family or friends are tough — in my experience you find your mind wandering and always on the job.”

From infancy to maturity

Anyone that’s ever been a new parent can testify (if they have the energy) that it’s an exhausting 24/7 gig. There’s a parallel for founders of new businesses, suggested Saam Lowni from Merryoaks: “Founding a business and growing it from scratch is very much like having a baby. It’s incredibly fragile and needs constant attention and nurturing — without those you will struggle.”

But surely when you close your first deal all the pain suddenly becomes worthwhile?

As Ian Pask, who set up the eponymous Pask and Pask, cautioned: “The reality is that everything tends to take longer, cost more and depend more heavily on people supporting you than you first expect.”

That first deal may be a lot further down the line than you initially thought.

Indeed, the ever-increasing amount of time that property finance deals actually take to close seems to be a major issue on the lips of many in the market.

Pick your partner wisely

At recent Property Lawyers Lunch Club and Developers Lunch Club events (the latter sponsored by BLEND), I’ve heard property lawyers and property developers saying that everything seems to be taking much longer to get over the line at the moment.

We are working in an environment of increased development costs, squeezed sales prices and painfully slow planning periods.

The pain of slow deal closing times is likely to be felt the hardest by new business founders who are reliant on their completions for much-needed income.

This is where the choice of lending partner becomes increasingly important for brokers.

In a market where transactions are taking longer and borrowers need certainty quickly, the lenders that stand out are not always those with the cheapest headline rate, but those who understand the structure, give clear feedback early and remain consistent through the life of the deal.

For new brokerage firms trying to build their own reputation, working with lenders who are commercial, responsive and transparent can determine whether a deal actually completes.

Reaping the rewards

If it works out, the financial upside is a powerful and obvious benefit of going it alone. As an employee, your income is capped by your salary. As a business owner, your earnings are limited only by how much value you can create.

Many entrepreneurs eventually out-earn what they ever could have achieved in traditional employment, building not just an income but genuine long-term wealth through the value of the business itself.

But financial returns are not the only benefit, nor is the sense of freedom that comes from working for oneself. Personal fulfilment can be another huge reward, especially when a deal does eventually come together.

As Chris Borwick explained: “When a deal completes and it's entirely yours, the feeling is completely different.

“The freedom to build something on your own terms, make your own decisions and shape your own future is something you simply can't put a price on. I wouldn't swap that for a salary and a boss again — not for anything."

On the lender side, Yann Murciano of BLEND gave his insight into the idea of delayed gratification being ultimately rewarding.

“Starting BLEND was a big jump for me, moving from being an employee in a large bank to building something on my own. One thing people often underestimate is that it takes longer than expected to build a high-quality business, particularly in property finance where reputation matters so much.

“But when it works, seeing a team come together, perform and build something with you is incredibly rewarding.”

When a deal completes and it's entirely yours, the feeling is completely different.

Tips from the top

New founders can get pulled, pushed and poked in all directions — it can feel like being a business version of Stretch Armstrong. It’s easy to say don’t get stretched too thinly and offer advice to delegate where you can, but when cash flow is scarce the thought of paying others to help you is not high on the agenda.

However, as Saul Conway at AS Financial explained, it’s a good idea to prepare for the need to delegate. "It’s important to have a plan to reduce the founder’s workload and influence within three years, making the business more operationally independent and efficient.”

So what characteristics differentiate those entrepreneurs who succeed in the property finance world and those who do not?

We have already seen that a bulging black book is not a required passport, but certainly the quantity and quality of your relationships will be a massive determining factor in whether your new brokering business rises or falls.

Those who can create and maintain better relationships seem to be those whose businesses survive and thrive.

As Ian Pask said: "The property finance world is ultimately about people and relationships rather than simply deals and numbers. Building trust consistently over time is what creates long-term opportunities.”

This idea is also supported by Vishal Patel, principal at Prideview, who suggested: "Genuine relationships, reputation and consistent execution are what generate long-term returns and repeat business.

"In property and finance, I believe the real differentiator is the likeability and trust factor. People ultimately do business with people they enjoy working with and trust to deliver.”

A tip from Vishal is to pick up the phone or meet face to face, rather than using email, as this can be helpful for fostering better relationships.

Ian Pask also highlighted “the importance of resilience, not just in terms of strategy, but in having the ability to stay steady when things do not go to plan”.

Building trust consistently over time is what creates long-term opportunities.

An appetite for risk

Obviously, the contributors to this article have all succeeded in setting up thriving businesses. Those whose businesses have gone under or are not going great guns (and there are indeed many) may of course give a very different take on going it alone.

With half of new businesses not getting past the three-year mark, it seems there’s an equal chance of financial suicide and success. But that’s just a statistic. Another is that businesses founded in 2023 had a 93.4% survival rate after a year, so maybe it’s not all doom and gloom.

Ultimately it comes down to how much risk each of us is willing to take — the common thread between all my interviewees though, is that they have no regrets.