Lending support Featured

7:00pm EDT February 12, 2006
With the low interest rates that have prevailed over the past several years and a hot housing market, mortgage brokers and lenders have enjoyed a brisk business and strong demand for their services.

It comes as little surprise, then, that Jeff Herr left a large mortgage broker in Cincinnati to start his own firm with two partners. And it’s no shock that the business quickly shot into the stratosphere, given the contacts that Herr, president of Coldstream Financial Services Inc., and his partners had and the surging demand for mortgage products.

Nice problem to have, but Herr says the opportunity for writing mortgages in a hot market meant Coldstream had to ramp up its recruitment and training program to meet the need for sales representatives and for managers to guide them. So Coldstream teamed with Miami University to identify prime candidates for its sales force and formulate an intensive and comprehensive training program to prepare them.

In 2003, its first year, Coldstream posted sales of $935,000. With 70 employees now, Herr forecasts 2005 sales of $6.4 million and a need for more mortgage pros.

Smart Business spoke with Herr about finding the right people to staff a quickly growing organization.

What’s been the most challenging aspect of fast growth?
You have to develop your talent internally in order to manage the growth. It gets to a point where the individuals who are business partners can’t be the only people managing 70 people.

Being able to develop the people within our organization very quickly to manage the growth, that’s one of the toughest things. We had to develop a training program for the people who were doing the training, and that came at us a little faster than what we thought.

We thought at the time the three of us could manage this thing until we got a lot larger, but what we realized was that the only way we were going to be able to do that was to work 24/7. We really had to find the individuals within our organization because we knew we didn’t want to hire from outside our organization.

How did you prepare those people?
We had to create a training program for the managers. We had to lay out everything that we did on a daily and weekly basis and how to conduct sales meetings, exactly A to Z what’s done.

That had to be all scripted out. Just like when we go out into the public and make a call, everything is scripted out because we want to have a consistency with our business.

How have you approached the sales talent development issue?
We believe, for the most part, there really isn’t formalized training with many of our contemporaries. So that was the one way we wanted to stand out. And the individuals we attracted to our organization, we wanted to make sure they fit a certain mold.

What we decided to do was, rather than try to solicit mortgage professionals from other companies in the Cincinnati market, we wanted to go out and find college graduates, primarily with business degrees with a focus on finance, and mold them through our training program, where they would learn the Coldstream way of doing things versus hiring somebody who had been doing loans for somebody else and comes in under different expectations.

How did you set up the training program for your salespeople?
Instead of hiring them and (having them) shadow a salesperson, which many companies have as their training programs, we wanted to set up a lengthy program that would take two years, where the first part is what we call a mortgage boot camp, a three-month program.

Instead of hiring one or two individuals at a time, we decided to get large training classes. Our first class had 22 individuals. That’s something that had never been done in the Cincinnati market.

How do you select the right candidates out of Miami University for your sales staff?
We start to weed through the graduates. We want to make contact with everyone that’s involved in finance. We contact everyone by letter and suggest that we’re interested in meeting with them.

The first step is a half-hour interview. We’re looking for individuals who have had previous work experience. Not necessarily sales experience, but we think it’s important that they’ve worked, particularly people who have worked their way through college.

It takes a tough mindset to do that, so we look for those types of individuals.

How do you persuade recruits to come to work for you?
Although when someone comes ... on the training program, they’re pretty much on a salary plus bonus arrangement, they do have the potential to move into commission sales.

So when they’re choosing us, as opposed to a Fortune 500 company, one of the things that I believe is attractive is that within a short period of time, if they have the right work ethic ... then they have the potential to earn a six-figure income within their first 12 months of employment.

How to reach: Coldstream Financial Services Inc., www.coldstreamfinancial.com