Can a real estate brokerage both grow and scale at the same time?
The short answer? Yes.
The longer response however is that while both can be done, ideally it is better to focus on one process at a time as they each require different skill sets.
In this post, we’re going to tackle the differences between scaling and growing real estate brokerages. We’re also going to list some of the steps brokers can take when attempting either of these activities.
What is business growth?
Attractcapital.com defines business growth as:
“…a stage where the business reaches the point for expansion and seeks additional options to generate more profit. It is a function of the business lifecycle, industry growth trends, and the owners’ desire for equity value creation.”
Growing implies a desire to become bigger, take up more market share, and generate increased revenue.
Growth characteristics include:
– increase in revenue
– increase in market share
– increase in human resources
– increase in operating expenses
What is scaling?
Investopedia.com defines the scalability of a business as:
“…a company’s ability to grow without being hampered by its structure or available resources when faced with increased production.”
It is relatively easy to scale brokerages thanks to the ever-growing adoption of technology across the industry.
Tech makes customer acquisition faster than before and using resources like digital advertising real estate agents can reach target audiences quickly. Low operating overheads and no physical inventory also contribute to rapid growth.
In a nutshell, scaling is all about implementing more streamlined processes that boost operational efficiency.
Scale characteristics include:
– Increased revenue and cash flow
– Revenue growing faster than expenses
– Streamlined operations thanks to technology adoption
– Brokerage gains outpacing losses
Steps to take to grow a brokerage
In order to efficiently grow your brokerage, there must be a strategy. Here are steps you can implement to encourage growth:
1. Quantify growth in your own terms
Write down the metrics you’d like to see as part of your brokerage’s growth plan. What does success look like in numbers i.e. homes sold per year, revenue made, etc.?
2. Hire a real estate marketing agent
Every brokerage is in the business of selling. Bring on board a marketing expert to coach and train your agents on the nuances of selling.
3. Get expert advice
Sit down with other brokers who have successfully grown their businesses. Subscribe to newsletters and podcasts by industry leaders. Learn as much as you can.
Steps to take to scale a brokerage
Scaling requires diligence and focuses a lot more on internal processes and systems.
1. Build a strong brand image
Before scaling your brokerage ensure that you have a strong brand image. What’s your reputation like in the industry? Invest in branding campaigns. Get your brand before as many people as possible.
2. Establish an all-star team of agents and advisors
You’re only going to be as strong as your people. Advisors will assist with strategy and top talent will run with the vision.
3. Upgrade your technology
In our digital-centric world, having the right suite of management tools that allow for the measurement of progress will enable you to scale faster than competitors.
Do you need more help with brokerage scaling and growing?
Real Estate Back Ops (REBO) is one of the Nation’s most reliable brokerage service providers. We assist with growth through M&As, commission structure design, transaction management, valuations, and ancillary revenue plans. Contact us for more information.