Have you ever thought of starting your own real estate company, but just don’t know where to start?
Five years ago we were building a real estate business that was starting to thrive with a team of five agents and two full-time administrators. In essence, we had begun to build a brokerage inside of a brokerage. Through trial and error our team began to be streamlined, highly functional and profitable. We recognized what was happening and the next logical step was for us to open our own real estate company. At that point my business partner and I decided to take action on our vision: to own a real estate company.
We wanted to own a true business. We enjoyed our team concept, but we wanted to be more than just inspiring a team to higher production. We wanted to impact a much larger group of people and assist them in building thriving businesses, which in turn would allow us to grow and thrive as well.
Here are five critical steps to building a successful real estate brokerage:
1. Determine how you can serve and support others:
Just like in real estate sales, your potential client wants to learn about you and trust you before making a commitment to join your company. Reflect on what is important to you as a productive agent while researching what the true desires are of agents in your marketplace. Get really clear on your discoveries and be confident that you can deliver. Make sure the desire of the agents in your marketplace map to your skill-sets and vision.
2. Focus on your strengths, not your weaknesses:
Whether you’re a new independent or a new franchise brokerage, you are entering into a highly competitive environment. The biggest mistake is focusing on your competition. Determine your own strengths inside of the market, focus on extending and expanding them and deliver a valuable experience that can create the promise of a better future for agents.
3. Know your numbers:
The first thing you must do is a budget and pro-forma. Look out 12 months and project capital expenditures, monthly expenses and production. Key high level numbers to focus on are the following:
- Capital required
- Monthly expenses
- Total number of agents you will recruit
- Trajectory of agents joining each month
- Attrition of agents that join in the first year
- Average number of closings per agent
- Average sales price
- Average commission percentage per transaction
- Retained dollar percentage of commissions (or fees)
This will give you a solid foundation to work from. Remember, recruiting solves all problems.
4. Recruit and retain:
There is nothing more important in the real estate business. You must have a system to consistently recruit productive agents and a clear retention plan. Your responsibility on a daily basis is to transfer value to agents facilitating the production and growth they desire. When recruiting, remember you can’t create demand, you must go and be where the demand is and be the solution. Learn where your potential audience of new agents engages and interact with them there by demonstrating your value as a leader, not selling them. Enrol them into every possible experience they can have of you and your company to nurture these relationships further. Be their first choice.
5. Train and coach:
Realtors can find training anywhere, anytime and most of it is free. Be clear on what drives production. Establish platforms that will expand every aspect of the agents you are privileged to lead. Make sure that true coaching and leadership is wrapped around the training you deliver. Deliver more than content. Build context. Be different.
Building a real estate company has been the greatest business decision my partner and I have made in our careers. We are honoured to work with the people who have believed in our vision, with the biggest reward assisting in the growth of our agents personally and professionally. We get the privilege of participating in a group of committed people experiencing success and fulfilling their dreams.
Ryan Hodge is broker of record/owner of The Realty Firm in London, Ontario.
