If you are considering starting a real estate team or want to grow your existing team, it is important that you have a plan on how you are going to achieve growth. It is sometimes easy to make quick decisions that later cost you time, money and more frustration and headaches trying to offboard the wrong hires or break up a partner team.
Having goals to start or build your team are fantastic; however, timing, planned growth and most importantly profitability are key factors in making sure your business is healthy and ready to support additional team members. Here are some helpful points when considering starting and scaling up a team:
Type of Team Model
Are you interested in being the team rainmaker and hiring buyer and listing agents that work under your umbrella, or are you considering creating a team partnership with another agent, where you each are equally invested in the business and conduct all of the listing and selling? Each have hugely different responsibilities and of course pros and cons. In either event, ask yourself first: “Do I have enough business right now to sustain another person?”
If considering a partnership with a 50/50 arrangement, for it to make economic sense, your combined efforts need to dramatically increase the total production and income. Sometimes it seems like a great idea when you are dreaming it up together, but in the end, one person usually works more, spends more on advertising and carries the weight of bringing in more business to the “team.” Resentment builds, and both realize that they should have stayed single agents. So remember take your time to decide to partner with another agent. I always suggest a trial period where you do 5-10 transactions together. Go on several appointments with clients together to test each other out and make sure it is a good fit. A business divorce can cost you lost opportunities, derail you from months of business income and take a toll on you both emotionally and financially.
If you are starting a team as the “rainmaker,” you will want to ensure your current production in listings and leads is high enough to sustain adding team members. Write your plan and job description for each team member, outlining your expectations for listings, sales and their contribution to the team. Have a plan for how you are going to attract and recruit, as well as what the terms are for how you will compensate them.
In either case, commit your expectations to a written agreement so that everyone knows what to expect and how they will be paid before transacting business. Good intentions are great, but this is a business relationship, and the terms need to be in writing. Have your attorney, broker or coach review to help make sure all major points are covered. This will ensure everyone is on the same page at the beginning of the relationship.
Making sure you have a well-oiled machine that tracks leads, listings, sales and tasks is a must before starting or grow your team. The system is what ensures consistency with client customer service, as well as what allows for follow-up, communication and every process that you use to work in the business. Having the system in place prior to hiring people is much easier than trying to build it while you have agents on your team. Not having a system in place creates chaos and total disorganization. I suggest hiring an admin and social media coordinator first that can help with putting these systems in place.
Business Plan and Budget
Making sure you are profitable at the end of the day is the point. Whether you are team leader or partnering with another agent, you must make money, or none of it is worth the effort. Use QuickBooks and create a P&L statement. Establish a budget for marketing and business expenses. Too many agents don’t do this until after they hire people, and realize later that they aren’t making enough money and are working from a position of stress and fear. Making sure you have these financial systems in place first allows for you to grow your team at a solid, steady pace without stress.
Monthly Reviews and Communication
Check every 30 days to make sure you are hitting desired goals before making new hires. Managing and leading team members, or working with a partner, requires constant communication and tracking of actual progress. Share the numbers regularly to see if original goals are being achieved. Make necessary adjustments or changes as needed to ensure people know how they are doing and if the relationship is working out. The assessment reminds everyone what the original goals and outcomes were supposed to be, and gives everyone an opportunity to ask for feedback and determine what training or new systems are needed to help everyone operate more efficiently.
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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 and the Official Real Estate Coach for McKissock Learning and Real Estate Express. For more information, please contact email@example.com or 844-989-2600 (toll-free) or visit www.sherrijohnson.com.