To avoid risks, simply don’t do something. That’s clearly the easiest way to avoid risks, right? It makes sense, but in avoiding the risks, you may also be avoiding making the best decisions for your life.
Becoming a real estate business owner obviously entails more risks than not being a business owner, but risk equals reward – it’s as simple as that.
In the world of finance, higher interest rates are paid to investors when funds are employed in higher-risk ventures, and vice versa. So it is in the world of business – play it absolutely safe and you can expect proportional results. This does not mean you need to shoot for the top reward in all situations and be reckless in your risk-taking. It’s about balanced decisions based on understanding the risks and being prepared to accept the possible outcomes.
Fear is probably the biggest impediment to progress. What I mean by this is that agents often feel so much fear about stepping up to business ownership that it stops them from proceeding. An acronym I like for FEAR is False Evidence Appearing Real. So if you feel fearful of opening your own enterprise (and practically all agents are) then it may be productive to identify what the specific items are that make you feel that way.
Fear can be a paralysing emotion, and generally has a negative effect if not faced. However, for the most part, if we look back at what we were once fearful of, we find that we’ve moved beyond that fear and it no longer applies. This is typically what will happen if you plan to open a business. Feel the fear and then do it anyway – the fearful perception is always greater than the actual situation.
Let’s talk about specifics: so you’d love to have your own business, but you are afraid. The very first thing you should know is that you are completely normal. Whenever we step into unfamiliar territory fear arises. However, we can break it down into understandable chunks and take a look at what we may be feeling concerned about.
Q. Are you the first person to have opened a business?
A. Well, of course not, so that means it can be done.
A branded real estate group that allows agents to keep 100 per cent of their commission is experiencing rapid growth as agents embrace the company’s innovative business model.
The One Agency real estate group has been steadily gaining popularity since opening its doors in 2008 and now has more than 120 offices across Australia and New Zealand.
The group is on target to reach 160 offices by the end of June this year, placing it within the top 10 networks in the country.
One Agency founder and CEO, Paul Davies, launched the unique business model after more than 30 years’ experience as a real estate business owner of franchise and independent agencies.
“In the real estate industry, it’s almost impossible as an independent agency to compete with the big franchises in your local marketplace,” Mr Davies said.
“But buying into an established franchise is both constraining and costly, so I set out to create a model that helped business owners to keep as much of their profit in their own back pocket and one that allows them to choose how they operate and grow,” he said.
The market has been very strong in most major centres across the country and, as ever with an extended robust period, there will come a time when the market slows down. There is a real possibility ahead for reduced activity, reduced prices, reduced stock and perhaps also pressure on fees, or, in the worst possible scenario, pressure on all four.
There’s a tremendous unpredictability with business and business owners need to be prepared for that unpredictability. A sustainable business, to me, is one that has a healthy profit margin so that it can weather variations in income.
Some agencies have got into bad habits during the boom years by paying attention to the wrong part of the balance sheet. When things are going well and the market is at its peak, it’s easy to get over- excited by strong sales figures and then lose sight of the simple fact business success is measured by profits, not revenues.
You need to plan ahead to remain sustainable throughout the tougher years; whether it’s a global upset or a market turnaround, we know that the market will change.
Agencies need to put their operating costs under a microscope because, for the bulk of agencies across Australia, their businesses aren’t set up to be run economically. They’re set up to maximise income. Of course, that’s relevant and very important, but what’s left after you’ve paid your operating costs is the only measure of success.
I think one reason this problem occurs is that many people who become principals are well versed in listing and selling but lack business management experience. The lesson for principals is to do more than just focus on where the next deal is coming from; you also need to calculate what it costs to create those deals. If you discover your margins are too small, you should consider cutting costs. That could include reducing your staffing levels, sub-leasing part of your premises or even doing away with your expensive shop front.
One Agency Founder & CEO, Paul Davies, and Head of Australasian Membership John Stewart discuss the challenges agents face with traditional franchise models and the importance of brand in this REB video interview.
If you’re an agent working for a principal, you may have already considered setting up business for yourself.
You won’t be the first person to walk down this path, and with the new year on its way, maybe it’s time to reconsider your goals. You don’t have to do it alone: there are plenty of options out there to help you get started.
A smart businessperson is someone who gathers as much information as possible and then makes an informed decision. There are potentially lots of experienced people out there to learn from, people just like me, so make use of them and ask a lot of questions. I have been involved in the set-up of more than 150 agents in their own businesses so far. Business ownership is really not as complicated nor as difficult as you might expect. These days, learning how to operate a business is like having to drive from Sydney to Melbourne at night. You don’t need headlights that can illuminate 800 kilometres: you only need them to guide you for the next 100 metres, as that’s all you need to see at any one time.
If you can list and sell, you can have your very own business – I’ll go on to explain why I firmly believe this. The truth is that in practically all cases, a vendor will list with a person, not an organisation or brand. The agent is the brand. Joining a brand gives individuals agents a great ‘real estate vehicle’ to drive and promote themselves and their services. But it’s always up to the individual agent as to how successful they will be. No organisation or brand can do it for you, which is really exciting if you consider that you can be a great success if you apply effort and skill, because at the end of the day it’s within your power and control.
Did you start the new year with a promise to look at your career path as a real estate agent? Have you considered opening your own business?
The hardest element to decision making is making the decision; that’s why so many people put it off. If you’re considering becoming a real estate business owner and want to take charge of your future, stop procrastinating! Once you’ve made the decision, that’s the hardest bit done. I really mean it, because once the decision is made, you just need to work out how to move forward and there’s plenty of help and options out there.
Making a decision is actually the first reward: you’ll notice that you feel lighter and less stressed. The indecision is over. You’ve challenged yourself and won. The reward is now being set firmly on the path to self-satisfaction, fulfilment and to having control of your future.
Positive decision-making in your career path leads to the ability to achieve the long-term goals of financial prosperity, health and happiness. It’s also been known for many years that having and meeting short-term goals actually has positive psychological effects that improve your performance and learning capacity. More recently, it’s also been demonstrated that successfully achieving short-term goals leads to more positive thinking and more likelihood of success in achieving those long-term goals.
I’m a great believer in taking small steps, achieving small victories along the way, and as a result of that strengthening your confidence. If we repeat those small successes then the larger successes will certainly follow. Likewise, the more you extend yourself, the more rewards will come your way. In life I have noticed that wherever you apply your focus and energy, that is where the results show up, whether that’s your new business, your health, your relationships or whatever. Therefore you have the opportunity for great rewards, based on a great effort, and one will equal the other. Here are some other rewards you can expect:
Is a shopfront essential to succeed in real estate business?
The notion of running a real estate business without a shopfront wouldn’t have existed 10-15 years ago, because if you wanted to open your own real estate business back then, the first thing you did was choose an area and secure a shop.
I’m not anti-shopfronts, I’m just against the costs of shopfronts, especially if the task at hand can be achieved without one. I’ve met a lot of agents – and I was one of them – who find that meeting their monthly business operating costs are a constant pressure.
Vendors know that buyers in the market to purchase don’t actually walk into shops to buy real estate, and agents can’t possibly rely on it. Potential buyers search on the internet, see signboards on properties, and are targeted by savvy client-focused agents.
A fast-growing Australian network has made its first move overseas and has hinted at further foreign expansion.
One Agency has opened two New Zealand offices – one in Wellington and another in Warkworth.
The network said it is also planning to shortly launch in Auckland, Christchurch, Dunedin and Pukekohe.
The New Zealand expansion is being led by John Stewart, who was general manager of First National Real Estate New Zealand between 2007 and 2012.
“One Agency promotes itself solely via social media and, while for the past seven years focus has been on the rollout in Australia, over time increasing numbers of New Zealanders became aware of the model and expressed interest in it,” Mr Stewart told REB.
What should real estate businesses do today to make themselves sustainable for the future? Paul Davies gives his opinion.
The market has been very strong in most major centres across the country, and as ever with an extended robust period, there will come a time where the market slows down. There is a real possibility ahead for reduced activity, reduced prices and perhaps also pressure on fees, or in the worst possible scenario, pressure on all three.
There’s a tremendous unpredictability with business and business owners need to be prepared for that unpredictability. A sustainable business to me is one that has a healthy profit margin so that it can weather variations in income.
Some agencies have gotten into bad habits during the boom years by paying attention to the wrong part of the balance sheet.
When things are going great and the market is at its peak, it’s easy to get over excited by strong sales figures and then lose sight of the simple fact that, business success is measured by profits and not revenues.
ONE big congratulations to One Agency Launceston for taking out the Small Agency of the Year Award at the 2015 REIT Awards for Excellence last Sunday.
The REIT Awards for Excellence aims to encourage, recognise and promote excellence and best practice in the real estate profession.
Leading the industry in Tasmania , One Agency Launcestonhave nearly 100 years of combined real estate experience. Using innovative marketing and a dynamic, energetic and vibrant team, their Launceston real estate business has expanded rapidly in size. The father and son team joined One Agency in July 2011 and have grown to a team of 10 including a property management division.
Your belief in your own capability to run a business is the single biggest factor in determining your business ownership future.
When I first considered going out on my own, I had a discussion with one of the partners in the business I was working in. He was an accountant and I told him I didn’t feel very confident about doing all the back-end compliance that was required. He told me I was right, and that I knew nothing about what was required.
But I did know one thing for sure: that I had this burning desire to do something for myself. I can remember thinking I’d hit an insurmountable wall and feeling completely hopeless, but the next thing he said changed everything forever. He told me that even though I was absolutely hopeless at admin and compliance, there were people in this world who knew what to do and that I could ask them.
That was the most liberating news I had ever heard. Of course there are, but why hadn’t I thought of that? Nevertheless, his simple advice has served me so many times over the years, when I’ve had inadequate experience. There have been plenty of times when my knowledge base has fallen way too short!
Running your own business is one of the most rewarding things you will ever do, but it’s also one of the hardest, especially if you’re not experienced.
I’ve been in real estate for more than 40 years, as a real estate sales agent and business owner. I worked for a boss for 13 years before I bit the bullet and became a principal.
Many people don’t realise that running a business is actually within their ability, dismissing the idea without properly exploring and understanding what it’s really about, before making an informed decision about whether or not it may suit them. But the fear of doing something is always greater than actually doing it and you don’t know that you can’t do something until you’ve tried.
As the founder and CEO of One Agency, I set agents up in their own businesses every day and I’d like to share with you some simple tips that I learned from my five businesses that could potentially save you a lot of time and money.
Are you wondering whether or not you should own a real estate business?
Well, here’s a simple question to ask yourself: are you working hard for someone else and giving away a big chunk of your commission?
If you’re an agent working for a principal, then you will have witnessed first hand what your boss has had to deal with in operating his or her business. No doubt you’ll have heard many complaints. The stress, worry and costs, right? You may think you’re better off being an employee. So you could just play it safe and stay working for your boss for the rest of your career. You could continue to give your hard work and loyalty to someone else. Or you could take the next step towards securing your financial future.
Reason 1: Security Does job and income security actually exist? Are you really secure when working for another agent? I don’t believe so.
We’ve all seen colleagues at some stage or another walking out the door with their personal belongings packed up in a box. They may have given years of their lives and their loyalty to the business. They’ve likely paid half of their commission or more to their boss, for the privilege of bringing in their own listings to the agency.
There are many different fee structures, depending on your experience and your agreement with the firm, but the bottom line is this: you are responsible for your own survival. You are responsible for both your expenses and your income, and you actually pay the real estate business a high price for the privilege of working under their banner and building their business.
So, as an employee, you’re already running your own sub-business without getting the benefits of the business profit and without any control over your own financial future. My belief is that the only security you have in this world is the security of your own ability, and that is best applied to your own business, where you have complete control of your own future.
The key to delivering a successful listing presentation is to ditch rigid scripts and act like a doctor, according to one of the industry’s top coaches.
Tom Panos told One Agency’s annual conference that agents should avoid scripted presentations because these don’t allow any room for flexible interaction with the vendor.
Agents should also resist the temptation to use unstructured presentations because they are likely to omit important information, according to Mr Panos.
They should deliver presentations that are structured but not scripted, which allows them to react to anything the vendor says and ask the vendor questions.
Agents who want a competitive advantage have been urged to hit the phones on Saturdays and stop making life hard for buyers.
Harris Real Estate managing director Phil Harris said agents need to scrap for every advantage they can, because the margin between winning and losing listings is usually small.
“Every time you win a listing presentation, I guarantee you’ve only ever just won that listing by a little bit,” he told One Agency’s annual conference.
“And then when you lose a listing presentation and you feel absolutely depressed, I guarantee you only missed it by this much.”
Mr Harris said one way for agents to get an edge is to make five prospecting calls every Saturday.
We love hearing how well One Agency is received in the real estate industry.
Daniel Hayes posted this comment on Facebook in 2013.
“One Agency Model: this is the one to watch out for, the one that will dominate the Australian Real Estate Market in the next 5 years, because it’s fair.”
As digital marketing and cloud computing taps into the new media revolution, the traditional franchising model is looking out dated, off the pace and out of step for independently minded entrepreneurs.
As the revolution transforms the small and medium business landscape, the traditional franchise model is in urgent need of a rethink.
Traditionally, entrepreneurs have taken one of three steps into self-managed small business: Start a new business from scratch, purchase an existing business, or buy into a franchise system.
Under the old laws of business, franchises afforded the perceived comfort of an established brand; a tried and tested product or service range; established operational procedures and processes; and, in some rare cases, the backing of big-budget marketing and advertising campaigns coming out of head office. All with guaranteed maximum financial reward by drawing a circle around your growth with postcodes, suburbs or products.
One Agency Launceston are in the news again after winning two new awards at the 2014 REIT Awards for Excellence last Thursday.
The REIT Awards for Excellence aims to encourage, recognise and promote excellence and best practice in the real estate profession.
One Agency newcomer Josh Hart won the Achievement Award. This 24 year-old was recruited into the industry straight from school and he has proven that age is no barrier. He joined One Agency earlier this year.
Daisy Richardson was awarded the Best Corporate Support Person, proving that her positive attitude and experience in customer service is highly valued in the industry. One big congratulations to both of you!
The bad news is that the good times won’t last forever. The good news is that the bad times can be turned to your advantage.
Real Estate Business explains in this exclusive report. A downturn is coming. When is impossible to say. But a slump has to happen sooner or later because property prices can’t keep rising forever.
Another sad fact is that not all offices will make it through that downturn. The boom years have attracted plenty of new players who have only known good times and who may have no real plan to cope with the bad. To quote Warren Buffett, “a rising tide lifts all boats, but it’s not until the tide goes out that you realise who’s been swimming naked.”
The worst time to prepare for a downturn is when one has already started. That’s why agencies need to start preparing now – right now – for the inevitable rainy day.
I’m sure you’ve noticed One Agency, the innovative real estate brand that’s come out of nowhere to shake up the established real estate franchise model in Australia.
One Agency CEO Paul Davies brings a lifetime of real estate experience to his new brand and has quickly built a following of very capable business leaders looking for change and innovation.
With the average real estate business in Australia reporting a profit of just 15 percent, Paul’s mission and dominating focus is to help establish competent real estate business owners into a business that is both effective and economical and you’ll hear him share the news that a number of One Agency business owners recording profits up to 85 percent after operating costs.
The raw attraction of One Agency is a proven business model that makes sense. By breaking away from the traditional real estate agency template, One Agency business owners get to keep much more of what they earn.
