I enjoy success stories; that’s why I love jumping on Entrepreneur Magazine’s site or Fast Company to get inspiration from those who have achieved, especially those who have gone out on their own. It is safe to say that we are living in very interesting times for entrepreneurs.
Real estate is an industry built on entrepreneurs. We are largely responsible for our own success, and our hard work is what drives business. I recently came across an old article that I had bookmarked. It had a great line: “How did we go from a nation of corporate drones to a nation of entrepreneurs?” The article cites many reasons, including the Civil Rights and Women’s movements, changes in lending laws and the boom of franchising opportunities. The internet and social media allowed for small businesses to be on a level playing field with Corporate America and ever-evolving technology allowed for incredible home-office productivity.
Obviously the amazing stories of Steve Jobs, Bill Gates, Mark Zuckerberg and Mark Cuban and his Shark Tank continue to fuel a start-up mentality that sees 543,000 new businesses start a month, according to Yahoo. Today, almost every college offers courses in entrepreneurship, and many even offer a degree.
But this shift also comes at a time where we are surrounded by highly visible, yet unprofitable companies. Uber, Lyft, Peloton and WeWork are the current poster children. In fact, Goldman Sachs recently shared that just 24 percent of companies going public in 2019 will show positive net income for the year.
So why is it that we hear so much about these sparkly, new companies that have yet to turn a profit, and not as much about steady, profitable companies? Think Johnson & Johnson, American Express or FedEx. There is a great deal to be said for long-term stability and profitability.
Over the years, the drivers of profitability in real estate have obviously changed. REAL Trends recently shared their top five:
- Team productivity
- eLead program
- Coaching and training programs
- Ancillary services
- Technology platform
Think about how each of these that has changed in the last five years, or even 10. Think about the investment required to be successful. This is why I have so much respect for the successful broker/owners who drive our industry. They have had to run their businesses with ethics and integrity to attract clients and agents, while also taking on financial risk. They constantly navigate changing times, market shifts and rising costs of manpower and technology. They have built firms that have stood the test of time and maintain long-term profitability.
As president and CEO of Realogy Expansion Brands, I always strongly encourage our broker/owners to share their successes and use their profitable status as retention and recruiting vehicles.
Profitability should not be taken for granted. It is a badge to be worn proudly as it showcases stability, market strength, business savviness and so many other positive attributes. Profitability is also an incredibly powerful recruiting and retention tool, especially in highly competitive local markets where upstarts and competitors are sacrificing it with the hopes of building for the future.
Of course, I am not urging broker/owners to wave around their balance sheets, but I do think it is important that they run toward success, and not away from it. Embrace the term “profitable” and utilize it in your marketing and recruiting materials, and make sure your agents know how they benefit from being part of a profitable firm. Profitability allows you to invest in new tools while reinvesting in those that already work. It provides a cushion to test new ideas to be ahead of the curve. Profitability also allows for different ways to grow marketshare. The list of potential advantages is plentiful. Make sure your agents know how to weave the word “profitable” into their listing presentations and farming activities. After all, consumers want to know they are working with a successful firm.
Let your agents feel the pride, and take a moment to congratulate yourself for your entrepreneurial spirit and successes!