Many agents have a goal to try their hand at business ownership, and there are many reasons for this.
Usually, they don’t discuss their plans with their current principal, opting to take the leap – whether that’s a franchise, done-for-you model or an independent business – on their own.
What they often find out down the track though, is that there’s more to running a business than the joy of autonomy and keeping all the cash.
They quickly find out there are a whole range of skills they don’t have, that they probably never thought they’d need, that are essential for running a business – human resources, writing procedures, admin, finance and payroll, to name just a few.
By then, it’s too late. They’re well into the deep end and all they can do is try to swim, though they’re more likely to be treading water.
This doesn’t mean the agent won’t be successful, but they may be doing three times more work to achieve similar net results as they’re used to (with a lot of the work being in areas they don’t excel in).
For a lot of people, when they first start in real estate, they depend on their principal for many things – training, credibility, teaching the craft, helping them sign key clients or close a landmark sale.
And they’re grateful for that, but after a while they assume the principal has nothing else to give.
Often, that’s a false assumption.
Having a structured conversation with your principal about your goals can help you better understand what it is you actually want, and how to achieve it.
Perhaps it’s better technology, better support for agents or a better client experience that you’re looking for. You may not have to go out on your own to achieve that.
Agents might be fearful that by talking to their boss, they could lose their job, they might be embarrassed to expose themselves and their private ambitions.
But most principals won’t sack an agent for being aspirational. They’ll welcome it!
The principal will most likely try hard to find ways to keep you involved in the company, while ensuring you are fulfilled as an agent.
A good principal will be thinking: how do we nurture this opportunity rather than have this person go down the road and become a competitor (assuming you’re culturally aligned)?
It also gives the agent a chance to properly think about all the things they need to do before they start a business. They can begin to develop a clearer picture about what they want for the future.
Remember though, these things take time.
One of the traps for agents who do have the discussion is thinking that they need a decision on the spot, and when they don’t get one, make rash decisions.
You’ve been thinking about it a long time, but this approach may have a lot less notice for the principal.
When it comes to the conversation itself, you could put it like this:
“I’m happy in my job, I appreciate what you’ve done, but I want to seek your input on a goal that I have in opening an office or sharing in ownership of an office. I’m not shopping around. I really do respect you and I am looking for your input on this. I don’t need an answer right away, but I’d like to start the conversation about creating a pathway or framework for me to achieve this.”
That way, your principal knows what’s coming, they can process it, and you can set up another meeting in the near future.
Once you have your second meeting, you should have a good idea about whether or not there’s going to be an option suitable for both parties.
If there’s not, you can create a road map from there – but it can be done in a professional and respectful way.
Regardless of the outcome, talking to your principal before going out on your own can help you avoid legal and ethical pitfalls, gain valuable business advice, and maintain positive relationships with your former employer and colleagues.
Your contract likely includes clauses that restrict you from certain activities, such as soliciting or accepting clients nurtured whilst at your former employer, or competing with them in certain ways.
Speaking with your principal can help you understand the terms of your contract and ensure that you are not violating any agreements.
Laws and regulations can also vary by jurisdiction, so it’s important to make sure you comply before venturing out on our own.
Your principal can help you navigate these issues and make sure you are operating within legal and ethical boundaries.
If the conversation goes well, even if you do go out on your own, your principal can pass on their wealth of knowledge, and provide you with valuable advice for starting your own business.
They may be able to provide insights on best practices for marketing, networking, and building a client base.
There are myriad benefits for taking this step the right way and having that discussion with your principal, but perhaps the biggest advantage is relationship maintenance.
A sudden exit can damage relationships with former colleagues and clients, as well as your principal.
Having an open conversation will ensure that if you do leave, you do so on good terms and maintain positive relationships.
Everyone has their eyes open.
