If you’ve decided to open your own real estate agency, here are five things you need to know.
1. Weigh the Pros and Cons
You are a go getter who’s willing to take on massive risk for potentially huge rewards, right? (If not, stop reading now.) It goes without saying, you’ll need to work long hours, even more than you did as an agent. But there are some perks to owning your own agency too.
Pros: You are your own boss; increased earning potential; hiring staff/agents that fit your ideal; and flexibility to work when and how you want.
Cons: Time, effort, and investment are increased tenfold; the potential losses/expenses are high, especially in the beginning; managing other people’s time is now a priority; and failure is on you.
Take a hard look at your own personality before taking on this challenge because failure could mean you lose a lot of money or potentially damage your real estate reputation.
Ask yourself…
- Are you a leader or a boss?
- Do you need to be in charge/control at all times?
- Are you well organized?
- Do you have connections in the industry?
- Are you communication skills strong?
- Do you want or need a partner to succeed?
If your answers lean toward no or maybe, you might consider opening an agency versus becoming a broker-owner.
2. Business Plan
A business plan helps to define your overall business and financial goals, both short- and long-term. It often includes mission, vision, and value statements; company name; target market and branding; unique selling proposition; finances; and document retention, storage, and security. The Small Business Administration has resources to help you craft a business plan and even offers free templates.
3. Location, Location, Location
If there’s one thing you know, location can make or break a real estate agency’s success. However, a physical office space isn’t the be-all-end-all it used to be. The virtual work environment trend we’ve experienced over the past few years has turned the “work location” on its head. Offering your agents and employees an option is something you to deliberate.
Which office should I choose, virtual or physical?
A virtual office can be less expensive because agents are responsible for their own computers, phone, furniture, utilities, etc. This option also allows for commissions to be split lower between the broker and agent.
A physical office location allows you expense many costs, including furniture, copiers, computers, office supplies, phone systems, and more. This setup allows for a higher commission split between brokers and agent.
4. Your Team
It would be difficult to run your agency on your own. That’s where a team comes in handy. In addition to agents, you’ll also need to hire the right employees, including administrative staff, office manager, HR department, IT staff, a bookkeeper, sales associates (unlicensed), and maybe more. In addition to staff, you may need outside consultants, such as a Certified Public Accountant (CPA), managed service provider for your website and email solutions, and a real estate attorney.
When you’re first starting out, think about the tasks you can outsource before hiring full time. This will help you to keep costs low while identifying your needs.
5. Marketing and Lead Generation
Fortunately, agents are your “on-the-ground” marketing team. But you are going to need more than people to get the word out; you’ll need a comprehensive marketing plan. You will need traditional marketing materials, such as brochure, website, business cards, flyers, signage, and more. You’ll also need a consistent marketing message to create a buzz around your unique selling proposition. Constant Contact provides agents with a Real Estate Marketing Plan: 5 Must-Have Strategies for Agents that you can download for free.
In addition to marketing, a lead-generation funnel will help drive new leads your way automatically. The funnel describes how buyers and sellers find your services, such as online search, real estate apps, local online business listings, and more. A CRM tool can automate the process and present leads quickly to your agents. Some of the top real estate CRM tools can be found in this article “The Best Real Estate CRM of 2022” from Forbes.
A lot goes into starting a new agency. We can help you get your ducks in a row before unlocking that door to opportunity. Give us a call.
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