Four women gather around a table discussing the economies of scale for their business Last Friday, I blogged about how Ford Motor Company dominated the auto industry in the 1910s by cutting costs so much that they could sell cars for less than 1/4 as much as competitors could.

    I pointed out how this was likely to happen in the real estate and mortgage industries too at some point, and I received feedback stating our service-oriented businesses are unlike manufacturing, so cost-cutting and economies of scale are harder to achieve.


    Even though we are a service business, there are massive efficiencies that can be gained from scale – allowing us to offer lower rates, discounted commissions and/or concierge services without impairing cash flow.

    And this is something we ALL have to be conscious of if we want to survive past our current “boom.”

    I discuss this below, focusing primarily on “economies of scale.”


    This is probably the biggest efficiency/scale factor, as smart companies are employing technology at an amazingly fast pace to both improve client experiences and to reduce workloads for their staff.

    At JVM, we now spend almost $700,000 per year on technology – and it is working for us and our clients in every way.

    For those of you who might wonder how we spend so much money, here is a list of some of the tech that we now employ:

    JVM’s Tech: Adobe Acrobat; Adobe Creative Suite; Adobe Photoshop; ADP Payroll; Agentology (; Asana; Azure; Blend; CalculateStuff (website calculator); Calendly; Camtasia; Candor; Canva; CardTapp app; CINC; Consumer Connect; DocuSign; Domo; Dropbox; Encompass; Eventbrite; Front; Google Marketing Suite; GoToWebinar; Grammarly; Homebot; Hoopla; Hootsuite; Informa; JotForm; KensieMae; Lattice; Lessonly; ListReports; LoanBeam; LogMeIn; Microsoft Office 365 Suite; MMI; Mortgage Coach; Moz; Nitro; Optimal Blue; OSI; Outreach; Parachute IT Server Maintenance; Parachute IT Desktop Services; Pardot; Power BI; Reach150; Recruiterbox; RingCentral; RoboForm; Sales Boomerang; Salesforce; Sendoso; ServiceLink; Snagit; Survey Anyplace; MS Teams; TextExpander; Todoist; Toggl; Trendgraphix; Updater; Vaunt; Wistia; SiteGround; Zendesk Chat; Zoom

    The point of all this though is that our tech costs are mostly fixed and do not increase in proportion to our growth.


    We also spend about $700,000 per year on admin and marketing, and these costs too are mostly fixed.


    In years past, we would have been delighted to close 1,000 loans over the course of a year, but now we will be very disappointed if we close fewer than 2,000 loans.

    Our mostly fixed tech, admin and marketing costs add up to a total of $1.4 million.

    $1.4 million divided by 1,000 loans = $1,400 of fixed expenses per loan that have to covered by revenues.

    $1.4 million divided by 2,000 loans = $700 of fixed expenses per loan (about half of what we used to have to cover).

    This type of scaling opportunity of course extends to many other parts of our company but I focus on tech, admin and marketing only to keep things simple.

    Our plan is to continue to scale in this manner in order to truly become the “Ford Motor Company” of the mortgage industry – where we can offer lower rates and better service than anyone by a huge margin.

    I harp on this so much b/c another downturn/correction will hit at some point, and those of us who are not getting ready now will be in a world of hurt.

    In my truly humble opinion, I think owners and team leaders should focus on tech, efficiencies and concierge services now, despite our boom times, before it is too late.

    And individual agents and loan officers need to align with owners and team leads who can best help them take advantage of those same efficiencies.

    Anyone just focusing on the present will go the way of Studebaker, DeSoto, Packard and many other now defunct firms.

    Jay Voorhees
    Founder/Broker | JVM Lending
    (855) 855-4491 | DRE# 1197176, NMLS# 310167

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