With fewer deals to go around, many markets experiencing a downshift and more agents than ever, it makes business sense to reach for the fundamentals. That’s why at Inman, we’re going Back to Basics with curated throwbacks to some of our most-read stories as well as new insights from agents in the field — all culminating in Inman’s Playbook for the Fall Market, a two-day virtual event that you should make plans to attend.
I frequently hear agents saying, “I need to hire a buyer’s agent so I can have more time to run the business.” In reality, that is not the way to effectively grow. Here are seven key steps for beginning to expand your business and propel it to the next level.
Lead with revenue
Although we are in difficult times and many businesses are shrinking, some sole agents are finding themselves in the position of having more business than they can effectively handle. The key to growth in any business is to lead with revenue: If you are not making money, you will not be able to afford to bring on the help you need.
Train tracks provide a good analogy: You cannot run a train until you have put the tracks in place. Unfortunately, many agents do not actually know if they are making money or not. Just being busy and closing a lot of deals does not mean you are profitable.
To determine whether or not you are actually producing a profit, I recommend you hire a bookkeeper to help keep track of your finances and produce the P&Ls and balance sheets you will need. While some agents have a financial background and can keep meaningful books themselves, most agents do not.
Additionally, while you might be able to do your own books, is that time well spent? Companies such as Streamlined Business Solutions can provide the support you need for a very reasonable amount, freeing you from low-dollar tasks so you can focus on activities that actually produce income.
Once you have determined you are producing profit, have a good flow of leads but are bottlenecked by day-to-day operations keeping you from effectively servicing your clients, then it is time to start looking for talent.
Start with an administrative assistant
While some may be thinking of hiring a buyer’s agent to pick up the slack with clients, that approach will bog you down in the minutia of your business and force you to spend an inordinate amount of time training your buyer’s agent and keeping them on track. The better approach is to hire an administrative assistant to take away the time-consuming tasks that keep you from spending more time with clients.
While some like to have control over all the details, my advice is, “Get over it.” While you may be a perfectionist, spending excessive amounts of time on tasks like brochures that get tossed is not the path forward. Your clients are more interested in you spending quality time with them than determining the font on your website.
Although you can have a voice in how the inside of your business is run, it is a far better use of your time to focus on activities that generate income instead of those activities that show up as expenses.
The key is hiring competent help — which, in most cases is not going to be cheap. While some may be tempted to look for bargain employees, that approach could end up hurting you in the long term. The critical fact is that a bad hire could permanently damage both your business and reputation and set you back months, if not years.
Develop a meaningful job description
The process begins with you understanding your strengths and weaknesses, likes and dislikes. It sounds simple, but an effective way of determining your future administrative assistant’s job description is to take a piece of paper, draw a line down the middle and write “Strengths” on one side and “Weaknesses” on the other side. Looking at all of the details required to run your business, put each task on the correct side of the page.
The Strengths side should include those activities that have historically produced the most significant income, while the Weakness side will have those low-dollar activities that keep you mired down. Once completed, the “Weakness” side of the page is your prospective assistant’s job description, and, when hiring, you must focus on finding a person who is competent in the areas in which you are weak.
Provide training
Once you have your new hire on board, I recommend you provide training to get them launched successfully. Programs such as “How to Find, Hire and Train the Perfect Real Estate Assistant” can be very helpful. The beauty of external training programs is that you can be off doing productive activities while your assistant is being trained.
Begin small
Some agents simply do not have the funds to bring on a full-time assistant. Our first assistant was hired part-time, but quickly grew into a full-time position. Our business also doubled that year, providing the resources to pay the increased salary. Some agents begin with virtual assistants, using companies such as Brivity, Upwork or Cyberbacker.
Set them free to work
Once you have hired and trained your assistant, let them do their job. There is no point in hiring someone and then micromanaging them. It took me a while to let go of some key pieces, but over time, my confidence grew and I discovered that others could do things better than I thought I could.
As your business volume grows, you should consider dividing your assistant’s role in two and hiring a transaction coordinator to focus solely on transaction-related details. Some agents choose to bring a transaction coordinator onto the team while others outsource to a fee-based third-party provider. This is the area in which most agents fail and pull back from ever growing their business.
I’ve repeatedly heard agents say, “I cannot trust anyone to do the important details.” Ultimately, this literally means they are committing to working 24/7 with no breaks or true vacations, will hit a ceiling in their business and run the risk of completely burning out.
Determine whether you need licensed or unlicensed help
As your business grows, you may discover that your assistant(s) need to do tasks that only licensed agents can perform. In our case, we determined early on that licensed assistants were the way to go. While this varies from state to state, you need to make sure that all activities requiring a real estate license are done by those who qualify, especially those activities rotating around transaction management.
Once you have an assistant and transaction coordinator in place and effectively working, at that point you can determine if you still need help with your buyers. Even then, instead of hiring a buyer’s agent per se, you should start with a showing assistant. This approach provides a higher level of control and removes the need for you to train someone in the full complexities of writing contracts and more.
Carl Medford is CEO of The Medford Team.
