Push past the plateau

Getting to a fork in the road is common in life and in business. But what happens when the path you chose didn’t get you to the place you thought it would? Mark McLeod examines how to structure your business for growth.

A logical path often leads to an illogical outcome. What does that mean?

Let me explain.

Our rich industry data shows a high percentage of agents will plateau in their fourth or fifth year in the industry.

This is where the illogical outcomes start.

Logically, a business that has been in the market a while should be growing.

You would have more past sales and, if handled well, these should lead to more referrals.

You have conducted more open homes and this has logically connected you to more members of your community.

Your market understanding should be higher and community involvement deeper than when you started.

All of the above should logically contribute to a growing business.

Yet many plateau at this point, which is utterly illogical.

It starts with the understanding that our industry is one of the few where your success starts to create your failure.

You push hard to gather stock, but when you get it capacity kicks in, and it draws you away from the activities you did to achieve it.

More importantly, more agents know how to make sales but struggle to understand how to build a real estate business.

The two are unrelated.

A mature real estate business has a built-in compounding effect.

Stock creates opportunities – in some markets as high as a multiple of seven.

It allows you to meet and further develop relationships and increase your database.

However, rarely an investment in time and money matches the growth of businesses, and the first capacity challenge now presents itself.

As much as many try to prevent capacity once it is reached, there is only a relatively small percentage that continue upwards with significant growth.

There is a new skill required here. You need to understand how to create and develop business structures that include team members and outsourcing.

In some cases, there may be relatively small amounts of investment compared to turnover.

So what is required?

1. An ability to delegate tasks to staff, team members or completely outsource. Our Ray White Concierge business provides support to many of our agents to execute processes for ongoing growth.

2. The development of leadership skills. As teams grow, professional job descriptions are required and allocated growth tasks across all team members or partner programs.

3. To allocate sufficient funds to support the strong development of the platform beyond the short-term focus and instant return mentality.

I’ve always said if you can swim in one metre of water, you can swim in 20m of water. Every market has sufficient turnover for growth to be endless.

The only question is, do you take the logical path or continue towards the illogical outcome?

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Mark McLeod

Mark McLeod is the Ray White Group's Chief Strategy Officer for Real Estate. He works alongside agents and businesses across Australia, helping them reach their ultimate potential to achieve success.