The 2020-2021 housing boom made it difficult for brokers to organize their agents and file the right paperwork, but now the industry has a bigger problem on its hands. What was once a hot real estate market had suddenly turned cold overnight, leading to an economic downturn.
While a 2008-style collapse is unlikely, brokers still have to navigate this decline intelligently. An impact on the housing market may disrupt available funds, but it doesn’t have to affect business management. There are still many effective strategies available to cash-strapped brokerages.
As an already established business, you don’t have to worry about startup capital. Your focus should be placed on maximizing productivity while prioritizing the well-being of your agents.
How to Manage Your Real Estate Brokerage in 7 Steps
Learning how to manage any business can take time and patience to master, even if you have experience leading a team.
Here are 7 steps you should take to run your brokerage effectively.
1. Create or Revise Your Business Plan
A business plan is a document that describes your brokerage’s activities and goals. Startups create these plans to attract outside investors, so you may have skipped this step if you didn’t apply for a loan. If you do have a plan, question whether your document is still relevant.
A typical business plan will include the following elements:
- Executive Summary
Includes a mission statement and info about the company’s employees (agents and administrative staff), operations, leadership, and location.
- Products and Services
As a brokerage, you’ll state the services you offer (buying and selling homes for clients). If you’re in a niche (corporate), discuss that niche here.
- Market Analysis
Brokers should review their market and its customers regularly if they want to keep up with consumer demands. This section also analyses your market share.
- Marketing Strategy
This section looks at how you’ll attract and keep your customer base. Marketing channels, campaigns, and media types should be described here.
- Financial Planning
Your financial statements, balance sheets, business targets, and estimates are applicable here. Describe potential investors or loan types, if applicable.
Every brokerage needs a budget to avoid overspending. Include costs related to your marketing, tools, research, staff, office building, and anything else you’ll need.
With a business plan in place, you’ve already identified your customers, marketing strategy, and finances. Plus, you’ll have an up-to-date document you can use if you need additional funding.
2. Build or Rebuild Your Infrastructure
Whether you’re starting from scratch or picking up where you left off, you need to take note of your current infrastructure if you want to improve. The first step is checking if your license is up for renewal, as you won’t be able to operate legally without it.
Then ask yourself this question:
“Do you really want to run a brokerage, or would you rather go independent?”
Most of your business plan can still apply to an independent broker, but you need to be okay with managing a company before renewing your lease, buying an office, or building an LLC.
Once you’re comfortable moving forward, take a look at your infrastructure for improvements:
- Business Entity
Most brokers opt for an LLC, but you aren’t limited to this structure. Regardless of what you pick, become familiar with its tax structure and documents.
- Real Estate Tools
Real estate tools can automate tasks and streamline business management. For example, Paperless Pipeline’s real estate transaction management software can record transactions, send emails, and create customized checklists.
From logos to fonts to colors, your brand tells clients who you are and what you do. Your brand should appear in all of your marketing materials. Create a branding policy filled with best practices, so agents can refer to it for their own advertisements.
- Marketing Materials
This section has some overlap with “real estate tools” because CRM and email database software can help find warm leads. However, this section also includes your marketing funnel and offline ad materials, like direct mail postcards.
- Team Members
Your brokerage needs agents, administrative staff, social media marketers, and much more. Decide who you still need to hire to manage your operation.
Working on the fundamentals now will save you time in the future. However, you’ll need to stay organized in the long-term if you hope to manage your business effectively in the here and now.
3. Stay Organized Daily to Limit Stress
Getting organized is one thing. Staying that way is another. Procrastination is common because there are so many little things to do. But as these little tasks pile up, it becomes impossible to focus on the essentials. The answer to this problem is daily goal setting and documentation.
Brokerages should create goals based on the SMART goal-setting method. SMART goals are specific, measurable, achievable, relevant, and time-bound, which makes them motivating.
To continue to set your brokerage up for success, set daily goals based around:
- Trends in the Real Estate Industry: What’s popular in your niche and other niches?
- Small Real-Estate Milestones: What goals can I set to motivate agents?
- Pivoting and Reinvention: What small change can I make to stand out?
- Market Targets and Niches: How can I appeal to my market more effectively?
- Networking and Leadership: How can I do better by my agents today?
If your thinking cap is always on, you’ll stay ahead of the curb. At the same time, taking care of daily business tasks can help you become more efficient and allows you to delegate easier.
4. Never Stop Improving and Changing
SMART goals are also applicable to significant changes in your professional and business life. Company management isn’t just about the small things; it’s about preparing for the big shifts. If you optimize your business now, you’ll only have to make small tweaks when the time comes.
To prepare for large industry changes, you need to invest heavily in your staff. However, you also play a big role in deciding the future of your brokerage, so take time for your own needs.
You can invest in yourself and your brokerage by applying the following:
- Onboarding Packages
If you plan on sponsoring new agents, prepare an onboarding package that accumulates them into your brokerage. A well-trained employee is more likely to stay longer, work harder, and be productive, which is a win-win for your team.
- Continuing Education
Create time to coach or consult your agents on industry and self-development topics, like managing money and real estate trends. Encourage agents to learn on their off-time by offering a stipend for online courses and seminars.
- Referral Strategy
Most of your agents know other agents or have worked with other professionals that could benefit your own brokerage. A referral program can help you and your other agents build their network and potentially allow you to corner the market.
- Content Strategy
Content marketing is an inexpensive way to bring more eyes to your business. Develop a content marketing strategy that includes a blog and another video or audio content form. Encourage your agents to write their own content by paying them.
- Work-Life Balance
Working non-stop will lead to burnout and make you miss out on other opportunities. Don’t forget to spend time with your loved ones and get out of the office once in a while. Speak to your staff about the importance of a work-life balance.
When the happiness of your employees comes first, business management becomes less of a complicated task. However, you can’t run a productive workplace without communication.
5. Be Transparent and Trust Your Staff
Micromanagers are the bane of an employee’s existence. Not only does it prove to your staff that you don’t trust them, but mistakes happen more often when we know we’re being watched.
But the negatives don’t stop there. Micromanagement isn’t scalable, often leads to burnout (for managers and team), and increases employee turnover rate. It also makes your agents more dependent on you because they aren’t told how to complete a task to your specifications.
While effective onboarding can fix part of this problem, transparency takes care of the rest. If you communicate effectively with your staff and create an open-door policy for questions, your team won’t be afraid of making mistakes. Plus, your team will feel comfortable speaking to you.
Building a good relationship with your agents, employees, clients, contractors, and partners is essential for business success. Hence, clear communication is necessary for sustainability.
6. Create Brainstorming Opportunities
When you build a trusting work environment, you open up the floor to incredible ideas. If your agents know they won’t be reprimanded for acknowledging a business initiative isn’t working, they’re more willing to help out. After all, your agents also want to work more efficiently.
Schedule a weekly brainstorming session where your team can express their opinions without judgment. Many of these comments will provide insight into your company’s culture.
Here are a few sample questions you can use at your next brainstorming session:
- What tools do you need to attract more leads?
- How can we help our clients feel more valued?
- How can I help you (employees) feel more engaged?
- What approach should we take for an X marketing campaign?
- How can we improve our next open house?
The value of a brainstorming session doesn’t just stop at the ideas brought to the table. Agents will feel more engaged and valued if you listen to their opinions and apply their suggestions.
7. Develop a Flexible and Adaptive Mindset
We talked a lot about change, but not everyone accepts it with open arms. As a leader, you have to be flexible and show a willingness to be criticized, or you may be left behind. Your agents need to be able to put their trust in you when something bad or unexpected happens.
Staying cool under pressure isn’t easy, so you’ll have to develop these skills as you scale. In real estate, markets can turn on a dime, and trends come and go. If you can manage your own emotions during these times, your employees will follow you and trust in your methods.
There’s no doubt that running any business is difficult. However, brokers can run a successful brokerage if they revisit their business plan, rebuild their infrastructure, stay organized, and invest in their employees. But above all else, they need to keep an adaptable mindset.