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How to Adapt and Scale your Brokerage Business

So things are ticking along quite nicely, and you are making money each month, but you feel in your bones that something is missing.

 

Only a true entrepreneur would be mad enough to start their own business and live a life of uncertainty, risk, and, sometimes, reward.

 

What could be missing?

 

Growth and diversification!

 

Albert Einstein famously said...

 

“If you always do what you always did, you will always get what you always got"

 

but Albert is wrong.

 

What he says only holds if the World around you does not change.

 

If regulators don’t muck around with leverage. If viruses don’t jump from bats to pangolins, to humans. If oil prices don’t go negative. If volatility doesn’t go to the stars and back. If Royals stop being Royal. If celebrities become politicians. If, if, if.

 

As businesses, we need to change all the time, Standing still is going backwards, so what should you do?

 

Well, I recommend a good dose of diversification to protect you from the bevy of black swans waiting around the river bend. 

 

If you can add more asset classes, types of clients, or new geographical regions, you have a better chance of staying alive and, dare I say it... growing.

 

You need to be brave, and you will make some horrible mistakes, but fear not!

 

Mistakes are just nature's way of helping you learn.

 

Be bold, and think the unthinkable, and some amazing ideas will emerge.

 

Be Bold Light Bulb

 

I would personally recommend that you have 3 or 4 new initiatives in the wings at any one time, with someone tasked to take each one and flesh it out. Some will wither on the vine; some will grow but then be proved to be rubbish, and some will be absolute gems.

 

All this brave talk then but...

 

What should a retail FX broker do?

 

I am going to help you here with a starter list, to get your creative juices flowing.

 

  1. Add index CFDs, commodities, bullion and major cryptos
  2. Target 3 sets of clients (very retail, professional, and money managers)
  3. Add some more Liquidity Providers to get better pricing across the larger asset class ranges - they are not all good at everything
  4. Review your technology partners. Are they as flexible and supportive as you need them to be?
  5. Employ a Business Intelligence tool to look deeply into your client activity. How much are you losing and how much more could you make with better A/B book modelling? Are latency traders taking you to the cleaners?
  6. Are there other parts of the World that you could easily sell into?
  7. What new trends are showing green shoots? Social, sentiment, copy trading, algo trading, correlations, etc

 

Good luck and may your failures be quick and your successes long!

 

All the best,

Tom

 

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