How can Small Businesses Survive?- February 5th, 2020

Issue Nine: On Small Businesses Staying Relevant or Even Thriving In Spite of Massive Competitors

We’ve been writing a bit about the role of small business in our industry lately, and from what we’re hearing, you have strong feelings on the matter, too! We welcome your feedback or would love to hear from you if you’d like to participate here. Just contact me at

We talked here last week about the fact that, in spite of the highly-segmented nature of the mortgage and real estate industry, it feels like we may finally start to see a Zillow or someone similar start to try to bring it all together under one roof, so to speak. Until then, however, there’s still no true “end-to-end” technology or business model to be found. But instead of resting comfortably on the flawed “that’s the way it’s always been…ergo…that’s the way it always will be” argument, let’s look ahead to how the integral small businesses in the industry can remain relevant and thrive.

Let’s start with the reason small businesses can make it in the mortgage space. Reason number one that mortgage brokers, mini-correspondents, REALTORS and title agents remain valuable is that the home buying process is complex. The consumer needs a friendly face and knowledgeable advisor. Although some of the large, online retail lenders have done an admirable job filling that role in some places, budget cuts, centralization of staff, and strategy adjustments can change that quickly.

So, for those consumer-facing, smaller firms, what’s the next step? How about taking customer service to the next level? The good ones are already knowledgeable about the market and the rules and proactive when it comes to addressing client concerns. But there are all kinds of new technologies coming into existence that can make the trusted advisor more accessible. Even better, how about offering the client ways to have the simple questions answered 24/7, whether the advisor is available or not? If the advisor is the one that makes the tech available, the client won’t think less of him or her for not taking the call personally—not if they get their questions answered!

Another way small firms can improve the experience is to collaborate better. I’m not suggesting that rival real estate agents give each other choice listings. Rather, I’m suggesting that it’s the small business that often has to provide the hack or workaround when our dinosaur closing and settlement process bogs down, caught in a space where two technologies may not mesh perfectly. How often is it the REALTOR or the mortgage broker—or the title agent—that has to make an extra call or do a little yelling to get the transaction moving again, even when it’s not their fault for the breakdown?

Maybe it’s time that the small businesses work together a bit more to find and use technology or process that integrates or aligns better?

Finally, the small business in the mortgage industry, especially the trusted advisor, has a unique position. That small business is both subject to the whims of the Big Boys in many ways, and yet, sought after by the same large firms. Why? Because he or she is an amazing source for new and repeat business. If these small businesses find new ways to collaborate to leverage that power, who knows what kinds of great advances we could see to an otherwise disjointed process?

This is probably a topic we could write 20 articles about. And we may just do that! But in the interim, send us your thoughts about how small mortgage-related firms can remain relevant and even use their leverage in the space to improve things for the consumer. If there’s one thing we can bank on it’s this: quite a bit of the innovation in our space comes from the little guy. Sometimes, that innovation propels the small business to the next level. But it’s not hard to envision some major advances coming down the pike when the successful mom-and-pop firm or solo entrepreneur puts his or her mind to it!

Until Next Week,


P.S. We are always looking for feedback and contributors! If you would like to be featured in an upcoming LodeStar report, please contact me at

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