It has always surprised me how top producing agents fail to run their business as a business once they achieve a certain growth. As a single agent, making your first $500,000 in GCI is a great achievement but the real challenge starts when you start growing and bringing people on your team to create a real business that can grow.
To overcome those challenges, you must first understand the reasons that might cause failure and take the necessary steps to prevent them.
Here are the reasons why real estate businesses fail based on my experience with top producing real estate agents and teams.
1. Failure to Build a Good Team
Without a doubt, failing to choose right members for your team is the #1 reason your real estate business might fail. A successful real estate business starts with having the right people on the team and making sure they are happy where they are.
Yes, recruiting is a complex task that takes lots of time and effort but when you have done a good job the results will definitely pay off.
However, if you can’t manage to build a good team, your individual sales success won’t be enough to keep your business going.
At Goodfellow Coaching and Consulting, we have achieved amazing results with elite real estate teams by implementing recruiting and HR systems. The teams have not only attracted talented employees to their team but they also have received the best performance from every team member they have brought on.
2. Creating Unreasonable Compensation Plans
Having a good compensation plan is essential to attract talent to your company BUT many team leaders are making the mistake of giving away too much. They give so much that it becomes impossible to operate a profitable business. You should create a balance between making money and keeping your team members happy at the same.
Your business won’t survive without great people on your team. But if you are not protecting your margins, having those superstars won’t help you much.
An executive real estate coach would be the best resource to create a compensation plan and put systems in place to maximize your profitability.
3. Lack of Planning
Some real estate business owners try to operate their business on feeling and don’t care much about the facts.
Not having a business plan in place is one of the biggest causes of disappointment in the real estate industry. The market is highly competitive and businesses can’t survive without creating a strategic business plan that includes sales and expense forecasts, marketing plans, and competitor analysis.
This October’s Mastery Summit will feature special sessions where top Realtors will discover ideas on how to achieve scalable and sustainable growth.
4. Poor Management
Your team needs you to lead the way so they can work towards the organizational objective. To be able to do that, you need to acquire the necessary leadership skills. No one is born as a great leader. You can teach yourself and improve your management skills.
Reading books on leadership and attending industry events such as Mastery Summit are great ways to strengthen your leadership skills.