Wheeler Business Consulting:
Does a strong market create complacency?
My daily interactions with professionals in the commercial equipment leasing and finance industry confirm that the industry is doing well. Portfolios continue to grow and asset performance is strong. Recent surveys of industry participants indicate that production and personal incomes continue to rise. Participants throughout the industry are thriving. However, there are concerns:
- Is the organization doing well because of the general market? Or because the organization is building a superior team?
- Is the organization prepared for even a slight bump in the economy? Is the organization sustainable over the long term?
- Is the current production really superior? Or are peers outperforming the organization?
- Is the organization building a quality portfolio based upon current conditions, or more normal historical outcomes? Is the organization being paid for the risk it is assuming?
- Is the organization capable of developing superior talent or is its team average and just "good enough" in today's environment?
Whether I am helping a management team create a strategic business plan or coaching an individual originator, the above questions continue to be raised on an organizational and personal basis.
Many clients are attacking these concerns head-on. Management teams are developing long-term plans for 2025. Professionals are thinking boldly about how individual activities can enhance their value. Savvy professionals understand that they must capitalize on the current opportunities in order to prepare for the future; and that knowledge is power in all economies.
A Case in Point: I have worked with many groups of originators in 2019. Many are
above-average producers for their company and have incomes well into the six figures. Many are in the small-ticket arena with the vast majority of their transactions adjudicated through an application-only platform (up to several hundred thousand dollars). Many of these originators avoid transactions that require full-disclosure adjudication. During group discussion sessions it is quickly revealed that one of the reasons that many of these top producers avoid full-disclosure transactions is that they have little or no understanding of financial statement analysis. Business has been so strong during the last few years that even veterans in the industry have flourished without a financial analysis foundation. Many of these originators, even with 5 to 7 years' experience, have created long-lasting, self-imposed limitations. Long-term sustainable success requires the ability to work transactions requiring full financial disclosure. The best relationships are built with a thorough understanding of each client's financial condition; and the willingness to provide meaningful solutions based upon an accurate understanding of each client's financial needs.
Although I am an advocate of strong application-only programs, the expanded capabilities of these programs have created complacency for some organizations and professionals. The strongest participants have taken the time and energy to fully understand the risk and rewards associated with the commercial equipment leasing and finance industry. Ignorance is never bliss. Knowledge is power. Fully understanding every aspect of the business is the means to sustainability.
Wheeler Business Consulting works with management teams to further develop their human capital, to identify and strengthen weak links within the organization, and to improve overall efficiencies.
Wheeler Business Consulting works with banks, independents, captives, origination companies, and investors in the equipment leasing and finance arena. We provide training, strategic planning, and acquisition services. Scott Wheeler is available to discuss your long-term strategy, to assist your staff to maximize outcomes, and to better position your organization in the market.
Comments and suggestions are always welcome.
Scott A. Wheeler CLFP
Wheeler Business Consulting LLC