By Penn Javdan
Smaller brokerages trying to establish a foothold in the Canadian real estate market face unique pressures from several directions. They must compete with larger, better established brokerages and face all the familiar terrors of a start-up business.
But one thing that a new or developing brokerage has in its favour is the chance to create a fresh blueprint, with complete control of its own destiny and a chance to pursue uncharted possibilities. This is something that larger, more bureaucratic brokerages might not be able to offer. In the large brokerage context, rules, processes and expectations are largely entrenched. Innovation and risk are considered less than desirable.
With a smaller brokerage just starting out, a strategic blueprint serves not only as a roadmap, it also offsets some of the risks and challenges that come with the beginnings of any business.
Make no mistake. A blueprint is more than just a mission statement or an outline of ideas. It is not a jumble of dreams.
It is the codification of a discipline, the recognition of a diligent practice and the architecture of excellence. All to sew the seeds of a real estate empire.
Here five key elements to securing a strong foothold in the real estate market that every shareholder or broker/owner must take the time to conceive, plan, articulate and execute.
1. Business structure:
The bottom line of any successful business relationship consists of appreciating just that – relationships. In the real estate context, this means relationships between all relevant stakeholders: brokers, sales reps, clients, support staff, legal and marketing staff, suppliers and even the media. Formulate the interaction between these stakeholders explicitly.
How will decisions be made? How will they be effectively communicated to the workforce? Will there be an overarching marketing approach that the brokerage can guide agents to perform, or will it be a free for all, with each agent left to their own devices?
Set the benchmark expectations early on, communicate them clearly and assign people responsible specifically to the role of ensuring this structure remains intact. How are changes to be considered, approved and implemented? Relate this to the daily operations, not just some abstract mission statement on a website. This includes a robust communications policy, both internal and external. Lack of transparency kills time and time kills all deals.
2. Client care:
Everybody knows that real estate is a commission-based business. But few people know just how psychology motivates us. The best way to train your employees is not just to reward them handsomely, but train them to understand that their performance incentives are only as good as the extent to which they ingrain incentives in their clients or potential clients.
One way to do this is to create a client care program. Formulate policies and procedures that facilitate the entrepreneurial spirit of each agent, but that also guides them in how to deliver superior customer service from both a transactional and a branding standpoint.
3. Quality control:
If you can’t see down the line, you can’t see. There are good times and there are bad times. Having a robust quality control program in place helps to ensure people are doing their jobs to mitigate the risk of poor performance, but it is also helpful in crisis management contexts. To prevent the flood, you must build a dam.
4. Market research:
Leverage research that extends beyond the MLS. The MLS is a tool, nothing more, nothing less. Understand your client and make sure your agents understand the market in which they are active or aim to be active. One way to do this is to acquire the right software or periodic training for agents to learn about just how powerful research can be. It’s all about foresight.
5. Human resources.
Take this as seriously as you do your sales numbers. Often, both agents and owners of brokerages want the bottom line without being too interested in the deeply embedded elements that lead them there. They ask which deal or client will make them the most money, but they sometimes stop short of going deeper, understanding the people who work for them.
Steve Jobs once said it doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do. Now, this doesn’t have to be taken too literally, but the point is to understand who is actually working for you. What is their psychology, their personality? Are they focused just on closing a deal, consequences be damned, or will they help build your brand and the strength of your company well into the future?
Ask yourself who are they as human beings before asking yourself what they can do for you as employees. If you ask only about numbers, you can bet you are going to have problems down the line.
One way to deal with this is to create a mentor program between senior and junior agents. Mentors can not only train their more junior peers on how to perform from a sales standpoint, they can also show them what it’s taken to build the reputation they’ve acquired during a sustained effort over the years. This not only shows junior agents the ropes, it further ingrains in them the confidence, drive and culture of being a top salesperson.
Finally, a word about empire. It is important not to get bogged down by the bureaucracy that can come from theories, no matter how grand they are. But it is equally important not to dismiss them as abstract fantasies. The idea of empire in this title has been used somewhat playfully, but one thing that stands out in this concept is to learn from the past.
Model the successes of those who came before. These models can be sourced anywhere. In fact, learning how to build a business can sometimes be best understood from less direct sources. For instance, brokerages can (and should) learn about the successes of non-real estate businesses. The purpose is not merely to build a successful business. It’s not enough for a brokerage to plough through the competition. It must stand the test of time. Part of that involves building a legacy of quality that anyone can appreciate.