From “Practice” to “Business”

Are You a Business Owner?

Many real estate agents think of themselves as business owners, but most are not.

How so? In the same way that Steve Jobs didn’t run the Genius Bar, Jeff Bezos doesn’t pack and ship your Amazon packages, and Elon Musk will not be building your new Tesla Model 3.

So when I hear real estate agents who write contracts, show houses, take pictures, run the termite report to the attorney (and do everything else that is required to get a deal done) call themselves business owners, I question if they understand what it means to own a business.  If you’re your own chief cook and bottle washer, you don’t own a business, you own a job.

Delegation = Evolution

Building a business means building an organization, and building an organization feels risky to most of us because we’ve convinced ourselves that to delegate to others surely means our service level decreases. At every agent’s core is a salesperson, not a manager, and the idea of organization is downright scary.

But the last time I checked, there are only 24 hours in a day, seven days in a week, and one spring sales season per year. And while we are at it, we should acknowledge that our market is cyclical and the days of bidding wars, escalating prices, and cheap money will end.

In order to capture as much value from the good market as possible, we need to size up and grow our capacity, as well as our efficiency. Being a one person band is less expensive, but ignoring the leverage that a well-oiled team can provide leaves money on the table.

To truly transform your job into a business, you have to be willing to delegate tasks to others, because there is only so much time available to maximize success in the seasonal and cyclical business of real estate sales.

Paving the Way for Agents to Build Businesses

Gary Keller’s widely lauded publication, The Millionaire Real Estate Agent (MREA), remains the most relevant treatise on team building in real estate sales today. The book lays out a clear progression from “lone wolf” agent to CEO of a dynamic real estate sales organization. It discusses not only the roles of each individual on a high-functioning team, but the order in which each hire is made.

When One South Realty Group opened in 2008, Keller Williams was just becoming known in our marketplace. The Keller model, including the MREA teachings, were not known as well as they are today, especially in RVA.

Despite this, One South unknowingly evolved almost exactly down the pathway that the MREA prescribed by allowing our agents to leverage specific organizational roles relating to marketing and transactional support. In effect, our version of the MREA model allowed all of the One South agents to function as a de facto team.

Our first hire was a transaction-focused administrator to help agents manage their transactions. Almost immediately thereafter we hired an administrative assistant to create property brochures, send e-blasts, and help run our marketing efforts. Next we hired a Managing Broker as a 24/7 resource to agents who needed help getting their deals across the goal line, and finally, we brought aboard a business consultant to take team building to the next level.

We had, organically and independently, replicated and built upon Keller’s recipe for success based on our own observations on what agents need to be successful.

(Full disclosure, I do work for this brokerage. But even fuller disclosure, my coworkers and I genuinely believe that we have created a unique model that is unmatched in its ability to put agents on the path to business ownership.)

So You Read the MREA — Big Deal.

Well, we differ in one important way — we built a team for you.

Instead of requiring our agents to bear the risk of team development — salaries, management, training — we built a team that all of our agents can plug into. These services are delivered in an ‘on-demand’ manner, meaning it is pay when you sell, not pay when you don’t sell. The agent is able to focus on income producing activities, and he/she is not responsible for hiring, firing, salaries, benefits, training, HR, or any other aspect of employee management.

To put this benefit in perspective, an agent would have to spend close to $100,000 to maintain two full time employees in order to deliver the same level of service that we provide as a part of our standard contract with our agents.

It has served all of us well. What all of this means is that any agent who is invited to join us knows that they will pretty much never have to worry about the most difficult and stressful aspects of building a real estate practice into a real estate business. They can spend their time on what they got into the business to do — help people navigate the increasingly complicated world of real estate brokerage.