Mega Agent Expansion
How do you grow your business when you live in a state that has more cows than people? For Adam Hergenrother, Keller Williams associate, owner of the Hergenrother Realty Group (HRG) and operating principal of the Green Mountain (Vt.) market center, the answer lies in expansion – across office, state and maybe even international borders. Adam Hergenrother shares how he gained market share in multiple markets through Mega Agent Expansion.
As an expansion agent and member of the KW Mega Agent Expansion program, Hergenrother has built a real estate business across multiple markets in eight states including Chicago, Connecticut, Maine, Miami, Minnesota, New Hampshire and North Dakota. And he’s just getting started!
Hergenrother began his real estate career in 2006 and quickly found himself among the top three producers in Vermont. ¬The desire for a new challenge pushed him to open his fi rst expansion team in Portland, Maine, in 2011.
“Really, I expanded because I was bored,” he says. “I also had a limit to what I could do here, although I was limited in my thinking more than anything. ¬The money was great, but I didn’t want a box in my life that controlled me.”
That first expansion office predated the introduction of the Mega Agent Expansion Explorer Level, which meant Hergenrother got to help quite literally write the book on it.
“I was privileged enough to be able to help write the Explorer Level content,” he says. “As soon as it became available in 2014, that’s when we joined.” As an expansion pioneer, Hergenrother first had to clear the hurdle of misconceptions. “The largest challenge when we first launched was people understanding what we were doing,” he says.
“Expansion and franchising are common in other industries, and today, the Keller Williams University (KWU) course Expansion Systems Orientation breaks it down for the real estate industry. I wish I had the model when I first started because my initial challenge was being accepted into new market centers. It was a scarcity mentality. I quickly realized that if people were getting that upset about it, there’s something there. I believe that there’s always a way, so I asked myself what my next move was and kept going.”
Launching the second market in 2012 proved an easier feat because the model was already in place, and it also gave Hergenrother the opportunity to prove that there was plenty of business to go around and that he would expand the market share of the market center. “The exact opposite of what people thought was going to happen happened,” he says. “People thought we were going to take business from them, but instead we became a model for team building.” To those agents who are ready to make the leap into expansion, Hergenrother offers some tips.
Knowing the Right Time
“If you’re making above $100,000 net income for your business, you should be ready to expand,” he says. “People in more populated areas can expand so easily. It’s only 15 minutes to another office, so it’s a really logical step for expansion. It’s so much harder jumping state lines. I only did it because I had to, which is why I’ve learned things that most people never will, like how to operate within different state boundaries from a tax perspective, MLS, boards and licensing. It makes expansion through the country now a lot easier because we’ve adapted how to do that.”
People Are the Investment in Your Business
His next piece of advice centers on one of the driving tenets of his business. “People are the number one investment in your organization,” he says. “¬The key to expanding is to make sure you have a strong foundation. You need a killer admin team, and you’re going to have to pay them more than you normally would. You have to see people as an investment, not an expense. ¬The minute you start seeing them as an investment opportunity, you’ll build a strong foundation for your hub, and you need that caliber of a leader on your admin team to expand to that next level and hire your listing specialist and your buyer agent.”
Pull the Bow Back Before You Let the Arrow Go
Hergenrother references Gary Keller’s triangle of leads, listings and leverage, pointing out that it’s often the latter leg that gets neglected. “Agents are good at sales and running salespeople but terrible about understanding leverage and people on the admin side,” he says. “You ask someone what their listing scripts are, and they can recite them immediately, but when you ask someone what their interview questions are and do they have those scripted out, they don’t. Today, I can script leveraging better than listings.”
When agents struggle in expansion, lack of leverage often appears to be the culprit, according to Hergenrother.
“You say you want to be a CEO, and you could tap into years of experience for your admin support, but people take that for granted, and six months in, they say they’re trying to build a team but can’t get admin help,” he says. “You have to slow down. You have to pull the bow back before you let the arrow go. Instead of grabbing the arrow and running with it, you have to stop for a second and then let it fly.”
HRG's tagline is “where CEOs are made,” and for Hergenrother, that role involves shouldering the bulk of the leverage.
“Wouldn’t the CEO be the one person who needs to put all your time into leverage?” he asks. “People intellectually understand that, but do you live that way? Does your calendar reflect that? Is it ingrained in you viscerally so you make decisions based on leverage? Every time you hire someone, you’re giving someone an opportunity to grow personally and professionally and helping their families grow personally and professionally as well.”
Coaching Is Not Training – You Need Both
When it comes to his own personal and professional growth, Hergenrother has taken part in KW MAPS Mastery Coaching for the past two years.
“Coaching is one of those things where for a while I thought it had to be from someone who was smarter or better than me,” he says. “But training is different than coaching. Training you can get from someone who has experience. Coaching comes from accountability, from someone who will ask the questions you may not ask yourself, so you discover what you need to focus on to grow the business and your life to the largest possible place.”
Don’t Ignore that Winter Is Coming
Having expansion offices throughout the country goes a long way toward mitigating the slow-down that brutal New England winters can bring, but over the years, Hergenrother developed strategies to counteract the seasonal downswing. The first requires overcoming an annual bout of institutional amnesia.
“Every winter, it slows down, but people seem to forget or think it’s going to be different,” he says. “It’s like pretending summer doesn’t come. A lot of agents don’t prepare financially for it. They forget the experiences they want to and relive the ones they want to.”
By remembering that winter looms ahead, agents can work to offset its effects. “First, tighten your finances going into it,” Hergenrother says. “Eliminate any expenses you’re not getting a four-to-one return on. Make sure you have a minimum of three to four months of reserves after taxes. Second, know your numbers. If in the summer it takes 30 dials to get five closings, you know winter has fewer buyers, so it may take 150 dials to get the same five sales. Take each month as if it’s playing into the next season. So if you know it slows down 25 percent in winter, you need to play at that same level in fall so you’re already prepared for it.”
Keeping the focus on the numbers goes back to something Hergenrother relies on across his expansion business. “When you have a large organization of salespeople, you have to move from emotional conversations to numeric conversations,” he says. “Words have different meanings to everyone, but everyone is clear what 10 means. You create a common language in numbers to hold each other accountable.” Accountability and commitment come up again and again when Hergenrother discusses successful expansion. “With expansion, people ask, ‘How do I know when to do it?’” he says. “If you’re committed to doing it, get it and put your foot on the gas.”
After expanding his real estate business, Hergenrother moved into other ventures, including a construction company and a capital firm, employing KW models and systems. “Once you get going with ESO, there are a plethora of ways to expand, so it’s about finding what you’re good at,” he says. “We broke away from building CEOs to trying a different model and didn’t end up liking it. Our team is all about leveraging and giving opportunities, so we went back to the model that made sense for us. If you kill it in new construction or commercial, find your niche in expansion and surround yourself with people who love doing that too, because you’ll stay in it longer and your passion will be stronger.”
This article originally appeared in OutFront, a Keller Williams publication.