Is your real estate business completely taking over your life? Are you able to provide top quality customer service in the midst of growing your client base? Are you able to grow your client base in the midst of feeling overwhelmed by the amount of business you already have?
Perhaps creating a real estate team composed of trusted, capable agent colleagues and administrative staff might be a potential solution.
Chris Pollinger, partner with Berman and Pollinger, suggests that agents ask themselves three question before creating a real estate team in hopes of determining the future profitability of such a team.
Here are Pollinger’s questions:
- What’s motivating you to start a team?
- The one answer that, according to Pollinger, can indicate the future success of a real estate team is that you have too much business to provide consistent, reliable, excellent customer service to all of your clients.
- First, hire a great administrative assistant to do all the checklist items so you can do 50% more income generating tasks.
- Are you willing to shift your mindset from a business operator to a business owner?
- As a business operator, your profit margin is likely 85%.
- As a business owner, you profit margin is likely 50%…AND…the more people on your team, the more your profit margin is likely to drop.
- Do you have enough financial reserves (money in the bank and/or a line of credit) to ensure your cash flow?
- As stated above, your first hire ought to be a great administrative assistant who is most likely to be a salaried member of your team, thus driving down your cash flow or profit margin. Make sure you have reserves to compensate for that salary.
- Your second hire likely ought to be a buyer’s agent when you have enough business and constant inventory to keep that buyer’s agent busy 3-5 days/week with open houses.
- Those open houses ought to be supplemental income to your buyer’s agent until that agent is closing 3-4 transactions/month, according to Pollinger.
- What “systems” are you currently using and are they effective?
- According to Pollinger, “profitable teams are run on systems.”
- Everything that is predictable and repeatable can be run by a system.
- Every checklist item can be run by a system.
- You as the team leader MUST retain full understanding and control of your team’s systems and processes.
Lastly, Pollinger reminds every real estate professional that every team member on your team is a reflection of you. “This is YOUR business and YOUR reputation on the line…” so create your team accordingly.