Are you gearing up to scale your real estate business? Are you feeling empowered to open a brokerage and train new recruits for success? Your future is exciting but you may feel a little apprehensive too. Here are some questions you should ask yourself before you decide to take the leap.
Do You Know Your Why?
What are your reasons for wanting to open a brokerage? Do you want to keep more of your money? Do you long to build a business that’s entirely in your control? Do you love your community and everyone in it? Do you have a heart for helping others grow and reach their goals? Do you thrive in positions of responsibility?
Whatever your reasons, be very clear about them from the beginning. When things go awry, as they sometimes do, knowing your ‘big why’ will help you navigate through challenges to the success on the other side.
Are You Ready to Commit?
While you might be working toward a lifestyle that means working less and earning more, it’s going to take some time to get there. Not everyone is made for management, so make sure you are ready for the challenge before you overburden yourself with responsibility.
Talk to other brokerage owners. Find out what to expect when you are running the show. The more you learn and prepare yourself to deal with difficult circumstances, the easier you’ll handle them as they occur.
In the beginning, you might need to work long hours as you deal with frustrating situations, and put out fires with your brokerage’s staff, agents, clients, and outsiders involved in your office’s transactions. Eventually, you’ll be able to hire others to take on some of the load. When you manage with positivity, success will come.
Are You Qualified?
In California, to open your own brokerage, you must be a licensed real estate broker. You can become a broker by completing two years of experience as a licensed real estate agent and taking the required broker training. Broker training can be completed in-person or through online learning.
Do You Have a Business Plan in Place?
There’s a lot to consider about how you want to run your brokerage, once it opens. Some things to ponder include:
- Will your office focus on a particular niche market?
- Do you have a location in mind?
- Have you decided to partner with a national or international brand, or will you develop your own company?
- How many agents and staff will you hire?
- What will the office culture be like?
- How will you recruit?
- Will you provide training and mentorship to new agents?
- What expenses will you incur?
- How many transactions will you aim to complete?
- How you compensate your agents?
Once you’ve decided what your business will look like, do some research to see if your proposed business will be viable in your area. For example, consider whether your potential niche and community are already saturated with brokerages and agents or whether there is room for growth.
Are You Financially Prepared to Own a Brokerage?
Owning a brokerage can be risky. You need to have savings and/or access to a line of credit while the company is moving toward turning a profit. It’s also wise to have a backup plan in place, in case of a crisis such as a sudden market downturn or a global pandemic as we’ve experienced since early 2020.
Give some careful thought to the expenses you may incur. These may include but are not limited to:
- Office space rental, lease, or purchase
- Office furniture
- Administrative staff
- Cleaning Staff
- Marketing and lead generation
- Marketing collateral such as websites, business cards, and signage
- Customer management system (CRM) for your office and/or for your agents
- Wireless networking and telephone costs
- Recruiting costs
- Costs associated with building your brand, such as office and/or agent websites
Before you take the next step to expand your business, consult professionals like your lawyer and your accountant, to make sure your plan is feasible and you are financially ready. Then the fun of building your brand and recruiting agents can begin. When you’re ready to take on new agents, make sure they get the best training possible.
Ensure Your New Recruits Get the Best Pre-License Training
At KW Real Estate Schools, we offer comprehensive pre-license training for real estate agents and brokers. Your agent candidates can choose from our interactive face-to-face Group Study or Fast Track independent learning programs. With our 1-Day Prep classes and one-on-on tutoring packages, students can feel confident sitting the California Real Estate Salesperson Exam.
Contact us today to find out how we can help you as a real estate brokerage owner.