By pushing their businesses across state lines and international borders, Keller Williams’ teams have proven that a career in real estate has no limitations. And, while it is an incredible, viable financial opportunity, there’s no escaping the truth: Expansion is hard. Taking a working model and implementing it in a new market is the ultimate test for any business. The good news – agents who are expanding today have the luxury of studying the path and progress of those who have gone before them.
If the prospect of expansion excites you, you’ve found the right place. Today, we’re sharing what some of our top expansion agents say you’ll need to know to be prepared for the road ahead.
Expansion Starts Now
Expansion isn’t something you wait around to do; it’s something that is built over time. That means if you want to build a business without limits, you have to start now. Begin by asking yourself: How scalable are the core activities within my business?
This is really important when it comes to lead generation.
Popular lead generation activities (commonly referrals, repeat clients, and your sphere) will keep your business anchored in one spot. On the other hand, lead generation activities that don’t require your personality, history, or direct input are inherently expandable because anyone can do it. This absolutely DOES NOT mean throwing your working lead sources out the window (other agents will gladly take those orphaned leads off your hands). It simply means that you must be intentional with how you’re adding names to your database.
The same goes for every other essential system and process within your business. Always ask, “If it can’t be leveraged through people or technology, then why am I doing it?”
Start Small, Stay Profitable
Successful expansionists dominate their own market before moving into someone else’s and have a strong hub keeping them afloat. Even airtight businesses can take on water under the stress.
Gary Keller, co-founder and chairman of Keller Williams, often recalls his own experiences while expanding his business. He says that the expansion department at KWRI lost money for seven years before turning a profit. The company as a whole, however, was always in the black. That’s because his model was so successful in the Austin market that it was able to finance all of his losses, enabling him to continue pushing toward success.
Don’t expect your experiences to differ from his. Before you decide to open up a second location, build a proof of concept in your own market by taking it over. Then, start the process again by implementing your model somewhere else (preferably somewhere close by so you can continue to iron out the kinks). Above all, stay positive and let your success propel you forward!
Reinvest Your Earnings
Expansionists don’t always live a lavish lifestyle. Opening new locations means committing to reinvesting a good portion of your income back into your business – probably more than ever before.
This means that you should expect to keep the lifestyle you have now, or even lower it, so you can continue to invest money into your professional future. When you have profit left over, instead of buying a new car, eating at a nice restaurant, or adding a second bedroom to your home, you’ll be putting it back into the activities that drive your business’s success.
If you haven’t already, build up a healthy reserve. The rule of thumb for any business is to have three months of operating expenses on hand at all times. But expanding businesses will want more.
More cash means more flexibility and a greater chance of survival. With the proper resources, you will be able to test new opportunities in ways that other businesses can’t. Moreover, you’ll have a safety net to fall back on while testing the viability of your expansion model.
People Lead the Way
A debate has been circulating among expansionists for quite some time: Does expansion begin with leads or talent?
In an ideal world, you would expand with both. But if you could only choose one, leading expansion agents say you should go with talent.
As we’ve alluded to previously, when you expand, things are going to break. Up until now, you’ve run your business. You’ve put in the hours, generated the leads, hired and trained the talent – all while plugging leaks as they’ve sprung. But, when you expand, you make that someone else’s job – and you won’t physically be there to see it through.
The quality of the leadership you bring on board will make or break the effort. They’ll make sure the things that don’t work, work. And, they’ll make sure the things that do work make you look like a certified genius. You’ll definitely want to have the right person on board before getting started.
The downside is that top talent is incredibly hard to come by. However, you’ve got one thing working to your advantage: Talent is attracted to opportunity. By already committing to a vision that includes a massive business operating out of multiple markets, you’ve created opportunity where someone else can succeed. You’re on the cutting edge of the industry, and that’s attractive to highly motivated, highly talented people. Before expanding, you’re flexing that vision while looking for the right person to join you on your adventure.