Real estate teams have been around for years, yet there are still misconceptions of why and how to start one, as well as whether they are profitable for the team leader. Some agents just want some extra help during their busiest months and don’t want to take on the management and leadership responsibilities that come with hiring, training and coaching agents on their team, as well as staff members. Other team leaders want to scale their businesses on purpose to maximize opportunities and expand markets, hiring partners, buyer’s agents, social media marketing professionals and transaction closing coordinators. It is so important to have clarity in what your real reasons are to decide to start and build a team.
Here are some helpful points when considering starting and scaling up a team:
- Focus on being profitable first. At the end of the day, your business needs to make a profit, not just churn out lots of sales and high volume. Those stats are fantastic for our egos, but I’m more impressed with how much money an agent earned. Paying yourself first and making sure you are growing your brand and business while remaining profitable are key to your long-term success.
- Know your reason (your motivation) for starting a team. Is it to scale and double or triple production with year-after-year growth and profits, or do you just need some help to manage your time and make more money for yourself? It is vitally important to answer this question honestly. Don’t just start a team because it seems like the trendy way to sell real estate. Have a deliberate, on-purpose business plan to how you are going to start and grow your team. If you act hastily and hire a bunch of people without a plan, you can end up spending months undoing a bad hire that at the time seemed like the best decision. This can also hurt your brand and derail you from months of selling because you are cleaning up the mess of a bad hire. Know your reasons and motivation to starting a team and design the model first.
- Have short- and long-term plans. Starting a team doesn’t happen overnight. You must have a plan, and, depending on your current production, it may not be feasible now to add buyer’s agents until you have enough leads in your system. If you’re looking big-picture, start by hiring part-time help to leverage your time. I recommend a person who can offer all-in-one assistance that can manage listings, social media marketing and assist with closings. This gives you the ability to go on more appointments and leverage your time to get more accomplished. Once you have built that, and it’s clear you have about $10 million in consistent sales, you are ready to bring on a buyer’s agent. Remember you must make money first.
- Attract talent. Once you are ready and have a plan, attract talent to your team with a culture of success, opportunities, compensation and incentives. Once you hire the right people on purpose, provide them with a written job description. This should include how they are going to generate business for themselves and your team. It is important to lay the groundwork that you will provide tools, training and leads, but there is an expectation that they will need to generate a certain amount of new business to the team each month.
- Use a trial period. While I know you are anxious to get your team up and successful quickly, it pays to take it slow and try out perspective agents that want to join your team on a trial basis. Prior to making a big announcement and officially signing them on, refer a couple leads to see how they conduct business. Have them hold open houses for you and see how well they convert leads. Once you know they are a good fit, you can then have them join. Trial periods will tell you everything you need to know about the candidate. Hopefully they turn out positive, but, if you don’t like what you see, you haven’t invested too much time or money into the relationship.
- Put it in writing. Create and sign a written agreement with terms of pay, referral fees, incentives, and an exit clause in the case of termination. Ask your broker for help or hire a coach to help you determine what terms and conditions need to be included. Seek advice of your attorney if creating an agreement to make sure you have covered all areas. This will make sure everyone is on the same page and in alignment before you enter into this important business relationship.
To help you navigate whether starting a team is the right course for you to grow your real estate business, email firstname.lastname@example.org to obtain my FREE “Questionnaire Template for Starting a Team.”
Sherri Johnson is CEO and founder of Sherri Johnson Coaching & Consulting. With 20 years of experience in real estate, Johnson offers coaching, consulting and keynotes, and is a national speaker for the Homes.com Secrets of Top Selling Agents tour. For more information, please contact email@example.com or 844-989-2600 (toll free) or visit www.sherrijohnson.com.