With the ever-changing nature of the real estate industry, there are more opportunities for entrepreneurs to build and grow a successful business. Now more than ever, agents, teams and associate brokers are interested in launching a startup brokerage.
Opening a startup allows you to establish new and innovative concepts within your brokerage to attract like-minded professionals who are aligned with your values and business objectives.
Here are the key steps to take when launching your startup plans:
Choose a recognized and trusted brand to support your business
In Canada, there are a significant number of brokerages competing for business. Depending on the province in which you are setting up your business, franchise brands represent more than 50 per cent of all brokerages. Canadians identify with brands they know and value and want to work with trusted advisors. Partnering with a reputable franchisor can provide your startup with significant brand awareness and marketing support, as well as systems and proprietary tools that can help with recruiting and consumer outreach – often more effectively than independent firms due to depth and scale.
Start creating a business plan early
Establishing a business plan is a critical step in your ownership process. Your business plan is the foundation of a successful business, allowing you to set clear goals, including financial and operational objectives. Your business plan allows you to outline your plans for accomplishing your goals, while keeping your business and your team on track along the way.
Seek guidance from industry experts
Gain insights on building a business by seeking expertise from industry professionals. Many experienced franchisors are generous with their knowledge and are willing to offer support and guidance to help you establish your business and succeed in the industry. Find a mentor who shares similar values and objectives and learn from their experiences. If you need help finding a mentor, reach out to your franchisor who can make connections and offer resources.
Find your Unique Value Proposition
Your Unique Value Proposition makes your business stand out from your competition. Having a well developed value proposition allows you to identify your niche opportunities. Determine what is missing from the market and what unique value you can offer your sales team. Ask yourself key questions such as, how can I provide support to my team? What training and networking opportunities can I offer to help my sales representatives maximize their career potential? Which marketing, lead generation and CRM tools can I provide to increase productivity?
Determine your startup costs
There are significant expenses that need to be paid to open the doors and sustain your business in the early months. As a new brokerage owner, it is important to have access to capital to open and carry the brokerage expenses for up to 12 months before realizing a profit. Forecast a minimum of 16 months from opening day and determine the number of agents you will require paying fees, and what productivity needs to look like, to offset the brokerage overhead.
Develop a competitive agent compensation plan
Your agent compensation plan can attract sales professionals to your team and can give you a competitive edge against similar brokerages. Establish a well-thought-out compensation plan that benefits both you and your sales team. Be creative with your model but resist the race to the bottom in fees charged, as there are a significant number of low-fee or low-service model brokerages in this space. Instead, focus on developing a strong value proposition that justifies fees paid.
Establish a strong support team
Hiring a strong team of business professionals for your new brokerage is an important step to take to ensure your business is set up for success. Recruit knowledgeable, experienced managers and support staff to make up your initial team, as they are critical to your brokerage operations.
Find an office space that empowers your sales team
When choosing a business location, think about factors such as visibility for signage, ease of access, parking and tenant mix. You should also consider what is important to your sales team, and what tools and amenities they will need to succeed. Many new owners envision their brokerage to be a hub for agent collaboration, training and social interaction. Office spaces should be strategically located where sales professionals can build their network and include multi-functional open floor plans, modern design and an emphasis on technology.
Jim Morris is a director of business development at Royal LePage Canada. He has worked closely with the Royal LePage network for 10 years, focusing on expanding the brand in Western Canada. Jim has worked with dozens of startups, providing them with guidance and support to plan and grow their business. Email Jim.
