Master the Basics of Business Before You Expand

I’m not much of a coffee connoisseur, but I like to grab a Starbucks coffee now and again just much as as the next person – especially when I travel. This week, I was in Wilmington, NC to teach Limitless: Personal Growth Through Business Success and inevitably I grabbed a Venit dark roast on my way to class. It could have been a Starbucks in Ohio or a Starbucks in Vermont. You know what I’m talking about here, right? Your Starbucks experience is exactly the same no matter where you go. And that’s exactly how consumers like it. Hell, that’s even how baristas like it! A great barista in my small Vermont town, could still crush it at a Starbucks in NYC. Why? Because the system, models, tools, culture, etc. is established, transferable, teachable, and duplicatable.

Sounds a lot like real estate expansion. Expansion is nothing more than a system, model, tool, and culture that can take a real estate business from one market and transfer that success to another market. Expansion (which we originally called Duplication about eight years ago) is when a real estate business owner expands their business and network outside of their local market. Think of expansion as a team without geographic borders.

It’s actually not a new concept to other types of businesses – franchises like Starbucks or Orangetheory Fitness, or other businesses like State Farm, Verizon, or Toyota – have been “expanding” for years. It’s not even a new concept for real estate brokerages (Century 21, Keller Williams, Coldwell Banker, etc.). However, it is a very new idea for real estate teams.

What happened for me years ago, and what is happening for other Realtors, is the desire to get out of production and start to build a sustainable and scalable business that doesn’t rely solely on one individual having a job. Selling real estate was an entry point for me into the business world. It fueled my entrepreneurial spirit and gave me a framework for building wealth, which I then translated into a building a business.

I actively sold real estate from 2006-2011. However, because I was in a geographically challenged area, I would always be limited to a certain size business because of the wonderful (and small) state that I live in. We have approximately 2,700 real estate transactions per year – yes, you read that right. 2,700 transactions for the entire state. I don’t like to be limited, so when Gary Keller introduced me to the idea of expansion and floated the idea of expanding my team beyond the borders of Vermont, I was in.

The key to doing this is to spend the time and resources to establish a foundation of administrative services, operations, and lead generation that can scale. And yeah, it’s not easy (or cheap!). If you’re starting from ground zero with nothing but your entrepreneurial drive and your database, then it’s going to be 5-7 year journey of building, breaking, failing, failing again, iterating, and building some more before you finally breakthrough. But it can be done!

People get into real estate for the freedom, but it’s actually the freedom that causes them to fail.  Real estate teams offer an alternative to an individual agent that allows them to plug into a proven system and model that will accelerate their success (discipline, even “forced” discipline equals success). Expansion businesses, like Hergenrother Realty Group, take it one step further and offer an alternative to a leader or real estate rainmaker that allows them to plug into a massive network and system that also accelerates their growth and success – just at a different level. It allows these leaders to build a business within a business. I have partnered with some incredible CEOs who are leading and growing our expansion network in 14 different states. They get the benefit of years of research, trial and error, and a proven platform to plug into. I get the benefit of building a business by building other leaders. The real estate industry is varied and expansion offers yet another option for entrepreneurs (and intraprenuers) to succeed.

For me, being an agent was a means to an end: building leaders, who would in turn help me build businesses.

What about you? Who are you? Where do you find joy?

If you’re like me and it’s about building leaders, then at a certain point, you will start looking to grow a team, hire administrative staff and sales professionals, and begin to leverage your way out of working in the business, to working on the business. Great! Now the real work begins. And whether you want to expand outside of your current city or state, or if you just want to dominate your local market, or if you want to try expansion and realize that it’s ultimately not for you, the foundation is the same.

Expansion is kind of a sexy thing right now. Big is better, right? Not when it comes to business. I see too many people just adding agents to teams (I learned from this mistake too!), or opening a new location where they like to vacation, or expanding into the next state over while their original location is still not profitable or running at full capacity. One step at at time! I am speaking from experience (and a lot of failing forward) here. Why not learn from my mistakes and grow faster?

The number one thing you must do, whether or not you ever expand, is master the basics of business and build a solid foundation. The Millionaire Real Estate Agent (MREA) is the bible of team building. Don’t reinvent the wheel! Success is simple (i.e. follow the model in MREA), but not easy. Entrepreneurs get, well, too entrepreneurial and think they should get creative, or that it’s different in their market, or they are going to try it this way. Sure, go ahead. Give it a try. But ultimately, it will just slow you down. Building your team slowly and methodically is not that fun, it’s really boring sometimes. Master the boredom! Put one foot in front of the other. Hire administrative help. Hire a buyer’s agent. Maybe two or three. Add additional operational support. Leverage to a listing agent. Lead.

Once your team has proven production (without you doing the majority of transactions), has duplicatable and scalable operations, systems, marketing, and lead generation, and has maintained a 30% profit margin, then, and only then, should you start to look for where to take your business next. And maybe you’ll reach that level of working on the business and decide to take a sabbatical, or start a property management company, or focus on launching your non-profit. When you’re working on the business, you have options. But you’ve got to master the basics of business first.

Where are you at in your real estate business? New to real estate? Looking to leverage? Ready to grow your team? Interested in expanding? Get started right. Read MREA. And then get to the next Expansion Systems Orientation class. Let’s slow down (just a little) and start putting the building blocks in place.

 

 

 

 

 

 

 

 

 

 

 

 

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