10 Mistakes New Brokers Make
By Avishai Ben-Tovim, VP Sales & Business Development, Leverate Good entrepreneurs learn from their mistakes. Great entrepreneurs though, learn from the mistakes others have made before them. No matter how shrewd of a business person you might be, every entrepreneurial venture is bound to have mishaps, mistakes and missteps and starting a Forex brokerage is […]
By Avishai Ben-Tovim, VP Sales & Business Development, Leverate
Good entrepreneurs learn from their mistakes. Great entrepreneurs though, learn from the mistakes others have made before them. No matter how shrewd of a business person you might be, every entrepreneurial venture is bound to have mishaps, mistakes and missteps and starting a Forex brokerage is no exception. Keep an eye on these 10 most common mistakes made by Forex brokers when starting their own business, so you can do your best to avoid them.
- Entrepreneurs going into the Fx brokerage business assume that Forex is a fast cash business and don’t allocate enough start-up capital as reserves thinking that they’ll be cruising along by the end of the first quarter.
2. Along the same lines, a lot of brokers don’t allocate enough funds for their initial marketing campaign, which include not only outbound marketing, but a way to manage the inbound traffic generated by the result of the campaigns, from capable sales personnel to tech support.
3. Not considering a realistic growth curve may prove to be a pitfall whether you grow too fast or too slow. Some brokers may think that they will grow fast and commit to goals with liquidity providers for example and not deliver, causing terms initially agreed upon to be reverted. Other brokers may start up with a three-person team and not plan ahead for growth, being unable to attend to clients and the everyday operation when they grow too fast too soon.
4. Trying to cut corners when it comes to regulation can prove fatal. The easiest regulatory jurisdiction may not always be the correct one for your business.
“The fifth mistake that certain new brokers make is not having redundancy on systems and providers. A lot of brokers get approved by a banking provider and pop open the champagne celebrating their going live, but six months down the line, the provider terminates the relationship and they are left like sitting ducks. Make sure you have back up providers and systems in place” – Avishai Ben-Tovim
6. Thinking that regulators are your enemy. Regulation provides the base for growth and regulators are the front-facing people. The best way to allow regulation to work for you instead of against you is to learn about regulation and to have a good relationship with regulators and treat them as partners.
7. Advertising without a branding umbrella can make your company waste marketing funds because your messages are not being delivered as part of one bigger picture. Think of what your brand wants to represent, what your message will be, and design all your advertising media, from your website to online and offline ads, according to that message.
8. Thinking a sales strategy translates equally into every region you do business in. Every country is different and cultural differences must be taken into consideration when approaching traders, which means that every new market you intend to open requires to be seen through a different glass.
9. Not training your sales staff to represent your brand. A broker may decide to hire the top sales person from one of its biggest competitors, a true star who will close any deal that comes his way, but never take the time to make sure the sales superstar speaks the language of the company and that his sales strategy is aligned with that of the brand.
10. Have a budget for IT and tech support. You want your systems up and running smoothly at all times so your top-line-personnel can do their job. You also want capable tech support personnel, after all, these are the people who will appease the dissatisfied customers who are the ones capable of ruining your company’s reputation with bad reviews.
Starting a new business is an exciting adventure. Keep these points in mind so you can ride the wave to success learning from where others have failed.