After a few years, many agents dream of starting their own real estate business. Independence allows you to make business decisions and, in the process, grow in confidence.
However, many real estate agents struggle to work out the right time to leap into freedom. Right now, with a softening market, it can be daunting for those of you considering to move out on your own.
So, when’s the best time to start your own agency?
The short answer is “When you feel ready.”
In my experience, many agents who transition to working for themselves find the change far easier than they’d expected.
Key reasons why sales agents choose to start their own agency include:
- You want to keep more of your commissions. The obvious one!
- You want more control over your income and the decision-making process.
- You’re tired of being held back, especially if you know the real estate industry inside out.
However, you need to prepare for success.
Top tips when starting your own real estate business
1. Build on your existing client base
Whether you’ve been working for a major franchise or an independent agency, no doubt you’ve built up a healthy client list and client relationships. People buy from people and those clients will continue to be your clients. In fact, becoming your own boss is likely to boost your credibility in their eyes, as they’re now dealing with ‘the boss’.
2. Have financial reserves
We recommend that you have access to at least $50K for the first six months of your independent operation. This will ensure you have enough to cover both your business and personal needs until you settle your first deal
3. Don’t fear the market
Although the media is spreading gloom and doom, this market is what we ‘more experienced’ agents regard as ‘normal’.
In fact, a buoyant market can give agents a false sense of security. A more realistic market will test your skills in winning listings and negotiating. If you’re a competent agent, you have nothing to fear.
4. Choose a less restrictive real estate agency model
Rather than spend hundreds of thousands of dollars buying into a major franchise with all the bells and whistles (that you pay for but might not need), consider being independent, or choosing a model that gives you the essentials while leaving most of the operations to your discretion.
5. Prepare a business plan and marketing budget
Using your previous experience, set some goals and expected cash flow. You’ll be more motivated to succeed when you can see your targets at a glance.
6. It’s what you save that counts
This is my mantra. It’s sensible for all agencies to contain operational costs. When you’re starting out on your own, it’s even more critical. So think about running the leanest operation possible, especially in the first two years.
Software: You can find many low-cost software solutions available now compared with a few years ago; e.g. A decent CRM or property management system should cost you only a few hundred dollars a month.
Marketing: Today, marketing is all about thinking local (where your customers live, work and play). It’s far easier to target active sellers in your neighbourhoods than ever before with search engine and social media advertising.
Office space: Consider forgoing a physical office and instead work from home, in a co-working space or from a serviced office. This gives you the flexibility to expand your team when you need to without being locked into a long-term expensive office rental. And you’ll save the cost of office furniture and equipment, kitchen supplies and utilities.
Virtual staff: If you choose to run a team in your real estate agency, consider using virtual assistants, who can free you from the day-to-day admin so you can concentrate on revenue-producing activities.
Are you ready to start your own real estate agency?
Our advice is: if you feel ready to go out on your own, and you have access to financial reserves, then don’t hesitate. In our experience, competent real estate agents who choose to start their own business grow both personally and professionally.