If you were to use one word to describe this year that is almost over, what would it be? Exciting? Devastating? Complicated? Confusing? Challenging? Most would say thank goodness it’s finally over. Since the beginning of my career, I have always been fascinated by the process of how one year ends and the next begins. It is a time where one can reflect on the successes and accomplishments of the present year, while establishing a business plan and goals for the next year. It is really the only time we take a look back and forward at the same time.
Think back to a year ago, most brokers were filled with promise and hope that the real estate market would turn around in a positive way in 2008. That, as we know, was not the case, and the ongoing downturn left many brokers trying to play catch up by reducing expenses and rightsizing their operations. Some were forced to sell off assets to stay in business, and some decided not to stay in business, either voluntarily or otherwise. And some brokers were able to take advantage of the many growth opportunities presented.
Given the fact we expect 2009 to be another tough year, I have three pieces of advice I would like to share with brokers as you finalize your business plan and budgets:
- First and foremost, concentrate on what you can control. Plain and simple. Period. In other words, none of us has the ability to change the course of the overall economic scenario that will unfold in 2009, but you do have the ability to change your company, your size, and your model. And bigger is not necessarily better. Are these easy decisions to make? No. But they are necessary ones. There is no more “waiting game” to play. It’s time to make the decisions none of us thought we would have to make, proactively. I spoke to a very large and well respected broker owner this week. He told me he is in the process of downsizing all of his (many) offices, and closing a number of them. He has downsized to a skeleton staff that each manage and support multiple offices. He is doing it now to get ready for the next upturn. He believes offices will look different when we emerge, and I agree with him. Put your head down, focus only on your business.
- Dramatically reduce your average square feet per agent. 10 years ago the average square feet per agent in an office was in excess of 100. It needs to drop to between 10 and 20. That is a big drop, but it is where it needs to be. The office of the future needs to be a high tech drop in center, nothing more. Check out a company called @ Properties in Chicago, they seem to have figured it out. You can accomplish this in two ways, by recruiting in to your existing space, or by rightsizing your existing space. You decide. I know which way I would go. Making this change now will guarantee profitability in the future.
- Make a conscious decision to only allow full time agents. This is important not only for your business, but for the industry as a whole. Imagine a world a few years from now where the industry is filled with part time agents, working at other jobs, consumers have lost confidence in agents, in the industry. It becomes impossible to recruit new full time agents to your company, to the business. It is easy right now to turn a blind eye to agents getting a part time job. You hope they will still bring in a couple of sales, but we all know how unlikely that actually is, especially over an extended period of time. I call this prolonging the agony. And potentially ruining your business. This industry does not need 1.2M real estate agents, The industry needs full time productive agents to meet the needs of the new wave of consumers.
Personally, I will never, ever forget 2008.The thrill and the challenge of launching a new real estate brand this year will always be remembered as the opportunity of a lifetime for our entire team. It hasn’t been easy, but I know we wouldn’t change it for anything… well, almost anything. We worked, and continue to work under extreme pressure. Just like everyone else.
This year we spoke to many brokers across the country and beyond. Brokers who shared intimate details of their business with us, their fears, their challenges, their opportunities. Some of these brokers decided to join our network, all of them helped shape our value proposition, our service offering. Many people played a role in shaping and developing the brand and the launch. The list is long, but I am compelled to mention several…. Marc and Brian from 1000 Watt Consulting for guiding us through Web 2.0. The BHGRE Advisory Board, John Featherstone and team from RISMedia, Steve Murray from Real Trends. Walter Schild and the Genex team for building our sites on time and under budget, Brad Inman and all of the people at Inman News – you made our launch a success. Mike Staver, our business coach, our partners at Meredith Publishing, everyone at Realogy. Kevin and Pat from Domus Consulting, who were so instrumental in helping launch this blog, the team at Infinia, and Hugh Mansfield from Mansfield Communications for proving once again that long term relationships count.
Happy New Year, everyone! 2009 will no doubt be another very interesting year.