Entrepreneurial Imperialism: EXIT Realty Maps Out Its Plan for Continued Expansion

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The big picture for EXIT Realty includes 1,000 franchises sold in North America by year’s end, plus 24,000 sales people recruited and $60 million in single level residuals paid out
By Maria Patterson

RISMEDIA, March 22 ? With the regional rights for 40 states granted in the United States, 550 real estate franchises sold, 13,000 sales representatives recruited and $35 million paid out in single-level residuals, Steve Morris ponders his next strategies in the building and stabilizing of EXIT Realty Corp. International. His perspectives are insightful, detailed and thought provoking, while his position is direct, assertive and positively aggressive. And although the EXIT success story is increasingly captivating the industry, thanks to the company?s ingenuity, magnetic pull and unique sense of flair, this CEO claims that we are witnessing just the tip of the iceberg.

Having kept the EXIT Formula a secret for 13 years, Steve Morris launched what is touted by many as the most revolutionary real estate concept in history in Toronto, Canada, on September 3rd, 1996. Bankers, investors and just about every broker on the block rejected this post-recession initiative but Morris persisted. Having taught a no-money down course for The Charles Givens Organization in the early ?90s across North America, Morris went back to the drawing board.

Steve Morris believes that failure is simply the need to change your approach. The fact that he was financially drained and had no bankers to back him meant nothing. He simply took a new angle of attack and the rest was history. His idea was potent and its time had come. Nothing could stop the doors of success from opening.

?The principle of leverage is based on both OPM (other people?s money) and OPE (other people?s energy) and if you?re going to build a business big you have to understand how to implement these ingredients effectively,? claims Morris. ?I lived in Canada and it was necessary to grow where I was potted. But the United States is almost ten times bigger, so entrepreneurial imperialism was the name of the game. In this regard the kindling wood for the fire was Canadian whereas the big logs were south of the border.?

In order to raise his own capital he proceeded to divide Canada into 32 districts of approximately 1 million in population each. He sold these rights to a cross section of top producers at the end of what appeared to be a never-ending recession. In 13 months he had the capital required to expand further.

?Windows of opportunity always open wide with every good idea,? Morris states as he relived the origination of his new corporation. ?The money exchange between Canada and the United States was a buck for a buck-and-a-half when we began, and this lasted for seven incredible years. This meant that every time I sold something in the U.S., I got paid $1.50 on my dollar. Needless to say, having no financial backing, we focused the majority of our concentration on American soil.

We sold some franchises in Canada but it was rather incidental by comparison to what was happening in the States. When you raise your own money, you have to focus on what is most important. Canada had to remain on the back burner momentarily to return to later when the timing was to our best advantage.?

The strategic plan included dropping a plumb line south from Lake Michigan straight down to the Gulf of Mexico. About 65% of the American population was east of that line. The east coast was therefore step one of a four-step plan to sell all of the regional (state) opportunities therein. While EXIT sold each state as a boundaried territory by population it became vitally important to sell the big ones first. The power triangle of New York, Texas and California was therefore step two.

The next prerequisite for success included those states located just below the Great Lakes. Finishing up through the Midwest was step four in this process. Most of this is now accomplished and the balance will be sold by the late spring of this year. That will mean 50 states? rights sold in five years?a clear indication of the receptiveness of EXIT Realty right across the country. According to Morris, the launch has been an incredible success.

Not only has the real estate industry had an overwhelming response to the EXIT Formula, but EXIT was also awarded a $250,000 grant from the Canadian government for the research and development initiated in the development of EXIT?s proprietary software program that pays out single-level residuals internationally, including retirement and beneficiary benefits.

With Morris at the helm, EXIT?s objectives are specific blueprints of action dedicated to jettison his corporation into being the largest and most productively successful in the industry. He very wisely and effectively has employed centralized control in the normally decentralized system of franchising. He also took full advantage of the fact that EXIT entered real estate after the introduction of the Internet. This was very important when systems and services, including a centrally controlled ancillary methodology, were introduced. The premise being that, at EXIT, everyone gets a ?piece of the action,? which ultimately translates into an impressive return on invested time, all things considered. The prime objective is that everyone in the company does well, not just a few executives at the top.

The big picture for EXIT Realty includes objectives of 1,000 franchises sold in North America by year end, plus 24,000 sales people recruited and $60 million in single level residuals paid out. With exponential growth this is not just possible it is most probable.

The passion that pours through the entire EXIT organization is overwhelming. With everyone having a vested interest in the growth of the corporation through single-level residuals, EXIT associates actually assist one another in order to achieve greater success. With EXIT you get paid to pass down your wisdom and this triggers an empathy factor that seems to be void elsewhere.

Morris claims that EXIT?s real business is people. He says that all teaching, training and coaching is geared to get the very best and most out of each individual through positive reinforcement. ?We set out deliberately to strengthen self image and to reduce inhibition through top drawer, high fidelity controlled input. Our salespeople are the mainframe of this corporation. We specialize in training them well.?

With goals that initially appeared unimaginable, Steve Morris takes the position that his bottom line objective is 100,000 sales people. He leads the pack by flying across the continent weekly to conduct high-potency, super-charged seminars outlining the ?EXIT Formula? and its incredible potential.

According to Morris, the EXIT Formula has accelerated real estate into a three-dimensional business. The missing link of sponsoring has been strategically implemented to create a future for real estate salespeople that was simply never available before. Now, each individual can multiply themselves and magnify their return on invested time with sponsoring. At EXIT, they indeed get a piece of the action.

EXIT Realty Corp. International pays out all sponsoring bonuses generated across the continent. This year, EXIT intends to implement e-Business, whereby these bonuses will be deposited directly into the bank accounts of each sponsor for the transactions that were generated by those that they have introduced into the company. This means instant financial gratification.

Sponsoring at EXIT is not a profit-sharing mechanism. Sponsoring as a process is part of the mainframe of the corporation and, as such, functions spontaneously as transactions close. This has nothing to do with broker profitability. When a transaction closes, the individual who sponsored in the agent who generated that transaction gets promptly rewarded. Head office orchestrates the entire program automatically. Those who assist management by introducing salespeople who get recruited, are paid directly, immediately and efficiently. Again, the system is not contingent on broker profitability. It is a function of EXIT?s head office. The commitment for payout is absolute.

Morris claims that the weakest link in real estate brokerage has always been the inability of management to recruit. He states that a sales manager should have two points of focus in order to be successful; being a good talent scout and being a good coach. Having managed for 29 years in this industry, he fully understands the components necessary to build and stabilize effectively. Having interviewed thousands of sales managers, brokers and franchisees, the need to overhaul, enhance and refine this industry became strongly evident.

Management inhibition, the Ach-illes Heel of real estate, could only be rectified by putting the whole sales force in charge of the process. One person in charge of the most important job in the brokerage was not enough. ?Over 94 percent of all managers in this industry are inhibited to recruit effectively, according to my 20-year study,? says Morris. ?They?re failing miserably, and that?s just not good enough. If you want to rectify this situation and actually turn real estate into a profitable business that is truly good for everyone, you have to rearrange the furniture.?

EXIT?s Formula of paying an amount equivalent to 10% of the gross production of those sponsored into the corporation changes the whole picture. EXIT associates can now duplicate themselves by introducing other salespeople to management, thereby assisting in the recruiting process. They get paid their 10% bonuses from head office on the closing of the transaction up to the point where the new recruit grosses $100,000 each year. In other words, the bonus maximizes at $10,000 annually per recruit and is paid out residually for as long as the recruit stays with the company. Associates simply get 10% off the top for as long as they stay with EXIT. This translates into a 7% Residual Retirement Plan and a 5% Residual Beneficiary Plan. The system is designed to be unlimited in its scope and opportunity.

Since EXIT associates can sponsor anywhere throughout North America and receive the same perpetual benefits, individual as well as corporate leverage is multiplied. Every associate has a vested interest in the growth of each brokerage. They can all derive 10% residuals by assisting management throughout the country. Everyone works arm in arm. ?For the most part, a salesperson specializes in getting autographs for a living,? claims Morris. ?Each time they get someone to sign on the dotted line they are that much closer to pay day. Sponsoring is simply a new avenue of autographs. When you get a customer?s autograph and you sell a house, your bills get paid. When you get a salesperson?s autograph, through sponsoring, your future is created.?

John Farrell of EXIT Realty Homeward Bound in upstate New York, ranked ninth across the entire nation for Century 21. He now flourishes with EXIT generating over 200 sales annually while listing and sponsoring. Farrell breaks records each and every year, twice in a row winning EXIT?s Iron Man of Real Estate Award, the prestigious Tri-Real-A-Thon designation. Farrell sets an unimaginable pace. His smile tells the whole story.

EXIT is attracting some of the very finest in the industry. Russ Fitzpatrick, broker owner of EXIT Team Realty in Florida has built a huge operation of over 225 salespeople with the EXIT Formula. He moves with a tempo that is hard to match and walks tall with EXIT?s Top Broker Award. ?I?ve never had more fun in my life,? states Fitzpatrick. ?I?m in total control of my destiny with this formula. It?s changed my whole perspective on what true success really means.?

The big picture for Steve Morris, as he sits like an old general perusing his troops, is really much broader. He claims with absolute resolve that he is determined to outflank the competition in every area of their endeavors. ?Internationally we will achieve 250,000 agents with the EXIT Formula. That is our top line objective.?

He has surrounded himself with a superb executive staff, implemented a unique methodology and he incorporates a keen vision that certainly will have a profound effect in the real estate business as we know it. Heads are turning, the momentum is building and there is no question that EXIT signs seem to be everywhere.

For more information, visit www.exitrealty.com

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