For real estate principals, especially those who have recently launched their own agency, changing your self-perception from sales professional to business owner, can be challenging.
This is particularly the case for real estate agencies working individually.
But the fact is, whether you’re a team of two or a team of 200, if you’re running the show, you need to broaden your mindset, by thinking of yourself as a manager, and your agency as the business you need to manage.
According to John Knight, Managing Director of Business Depot, in order to give your agency the best chance of success, principals must master the arts of managing people, and managing finance.
While different in their approaches, both are equally important contributors to business growth and development.
Leading the team
“Leadership is more about the EQ (emotional intelligence) than the IQ,” says Mr Knight.
“For me leadership is about pushing people up to be the best that they can be, it is the ability to have courageous tough conversations while still displaying empathy and compassion for the person, not just the role.
“Real estate businesses are people businesses more than anything else. Principals must empower their team to achieve if they want to have a successful business. I love the old adage, you need everyone on the bus, they need to have somewhere to drive to and have someone at the wheel.”
Regardless of the size of the team, once people are involved, leadership is important to your success.
“Culture is king in business and a strong leader is responsible for culture. How they lead and manage their team and their business creates an environment where success is the norm, courageous conversations are encouraged and the team are engaged.”
Good leadership means a more stable, more efficient and more productive team – and this directly impacts your bottomline.
Which brings us to finance. Without a well-developed understanding of your own financial position, you could soon find the wheels of your bus start to fall off – no matter how positive the culture is within.
“Nothing paints a picture of reality more than your financial position – it is the single point of truth because you either have the money/wealth or you don’t.
“So often we see agents writing half a million dollars of GCI and more but still have no money in the bank.
“Every individual also needs to think of themselves as a business. If you can get into this headspace you will start to make decisions on your affairs with a broader view and longer term focus.
“Budgeting is key, as is understanding your ‘balance sheet’ or net worth position.”
In the real estate industry you would be naive not to expect some turbulence in your earnings – especially for business owners and commission only sales agents.
Mr Knight says if you don’t account for ‘rainy days’, your situation can turn dire pretty quickly.
“The right decision at the wrong time is just as harmful as the wrong decision at any time. It still amazes me how many people don’t like to talk about profit.
“They are often comfortable talking about cash because it is simple to see how much cash you have in the bank but profit is more important. You don’t get cash in the bank if you don’t have profits first!
“My catch-cry for the industry is: sales are vanity, profits are sanity and cash is reality. They are all important and you cannot have one without the other.”
John Knight will provide a deeper insight into how individuals can think of themselves as a business, plus other tips and tricks, at the REIQ’s Round 3 Zone Events, for more info visit REIQ.com/zone3