There are always standout real estate principals who are ‘smashing it’ in one way or another, regardless of whether it is a tough market or not. John Knight pinpoints what these top principals are doing that makes the difference in their business success.
If you are a business leader or owner, clarity on what is working is just as important as knowing what is not working. Challenge yourself to better your business every day and you will be ‘smashing it’ too.
These are some of the things we see principals doing that are achieving great results:
EQUAL IMPORTANCE GIVEN TO RECRUITMENT AND RETENTION
When the team is engaged, business becomes so much easier to manage.
Recruitment is important for growth, but continually losing employees out the back door is a waste. Great real estate principals invest in the team and make a concerted effort to ensure everyone is on the bus, facing the front and knowing where they are going.
FOCUS ON BEING A LEAN MACHINE IN GOOD TIMES AND TOUGH TIMES
Smart principals tighten their belt in the good times so they can be opportunistic in the tough times. Running a lean machine with a low breakeven point – the difference between your known fixed costs and known fixed income – reduces risk if the market turns, and makes you more profit in the good times. A continuous improvement focus and a culture that does not tolerate waste is one way to do this.
NOT TOLERATING NON-PERFORMANCE
Usually this starts with everyone in the business knowing what is considered ‘performance’ and how to measure it. Great principals don’t work on gut feel to judge business performance – they know their numbers and know who is not performing. This doesn’t mean they are sacking everyone who doesn’t reach budget; it means they hold everyone accountable and are always working on raising the bar.
Principals of great real estate businesses understand and appreciate the importance of transparent, authentic and consistent leadership. Leading by example (whether they sell or not) is a great start. They don’t pretend to know it all, and invest in non-technical skills too, both their own and their team’s.
EXPLORE PARTNERSHIPS TO GET INCREMENTAL PROFITS
More and more I am seeing great results from introducing employees into equity, whether legal or notional, and entering into new partnerships that better target a segment of their market or add a new dynamic. The difference between success and failure with this, though, stems from the transparency with which they enter the partnership and the clarity of the arrangement. Shareholder or partnership agreements are essential.
EMPOWER THE INDIVIDUAL AND MOTIVATE THE TEAM
Great real estate principals have an uncanny ability to balance the focus between the individual and the team. A great team wants the business as a whole to succeed as much, if not more, than themselves as individuals. This only happens when there is a strong foundational layer around the acceptable behaviours of the office and collaboration between divisions is the norm.
VPA RECOVERED UPFRONT
I know I sound like a broken record talking about the importance of recovering VPA upfront, but it is critical to keep your business efficient – especially if tougher times are around the corner. A culture of ‘no free rides’ means everyone pays their way and reduces the financial exposure of your business.
I still love what I call the ‘POD’-style structures, where your top sales agents team up with PAs or sales associates (whatever you want to call them) to improve leverage and better deliver on your customer needs. Think of it as taking a smaller piece of a much bigger pie by honing in and matching roles with skills. The lead agent gets leverage and the associates or PAs learn from the best.