This article was originally posted by Jacob Aldridge.
Every real estate business moves through the same business lifecycle. While we move at different speeds, our journey is predictable – so if we can identify where we are, we can more quickly determine what we need to do to grow our business and move forward into the most profitable and relaxed phases of business ownership.
All of this week, I’ve been discussing the Lifecycle of a Real Estate Business with Kevin Turner on the Real Estate UNCUT podcast. This lifecycle understanding is the result of my 17 years working with Principals in real estate businesses around Australia, plus extended research into the experience of business owners in different industries around the world.
4 cycles within the larger cycle
To make it easier to identify where in the business lifecycle your real estate business is, I have broken the journey into 4 smaller cycles: Start Up, Scale Up, Step Up, and Sell Up.
It takes many years to traverse this journey, and most businesses don’t actually make it through to Scale Up. If you’ve ever felt stuck in your business, unclear of the way forward, or blaming yourself for being a failure – chances are your business is simply in one of the low points on this journey and that’s a perfectly normal emotional response.
Unfortunately for many real estate Principals, their training, coaching, or franchisor mentoring fails to take these emotional steps into account.
The one thing every business has in common is the Start-Up phase of their journey.
- The very beginning is marked by excitement and enthusiasm
- Over the first 3 – 12 months, this slowly gives way to uncertainty and anxiousness as the reality of business ownership and leading a team become clear.
- At the end of Start-Up, businesses face a speedbump – fail to gain enough momentum, and instead of moving past the speedbump they will find themselves stuck in the ‘Trough of Sorrow’.
Listen to the podcast and download the summary to learn the common mistakes and top priorities in Start-Up.
Barely half of all new real estate businesses actually make it through to the Scale-Up phase.
- Those who do feel their confidence building, and then shift into a lengthy period of relaxed growth
- Over time – possibly 5 – 10 years – the business grows until you reach the euphoria of achieving your business goals
- But quickly thereafter, frustration starts to build as the business takes on a life of its own
- The middle part of Scale Up can be a good time to sell your Rent Roll
Listen to the podcast and download the summary to learn the common mistakes and top priorities in Scale Up.
Principals in Step Up have generally lost their mojo. They remember the ‘good old days’ and long to return.
- Overwhelm and disillusionment in this cycle may make you want to give up
- I call this ‘Step Up’ because that’s what you need to do – step up to the new challenges, to get re-energised and optimistic about your business again
Listen to the podcast and download the summary to learn the common mistakes and top priorities in Step Up.
Only the most successful businesses make it through to Step Up, and many of those don’t survive through to the Sell Up phase. At this point, you have the choice to Sell your business … or reinvest to move into another growth period. How does it feel?
- Hopeful anticipation as you seek your new vision
- Pride for a job well down,
- and Fulfilment … or a desire for something more.
Listen to the podcast and download the summary to learn the common mistakes and top priorities in Sell Up.
are you copying the wrong homework?
I think it’s important to share this information because of a business concept I call ‘Copying the Wrong Homework’, which I think is rife in the real estate industry for both salespeople and principals. This happens when you look at a successful agent or agency who is in a different point on their journey and try to copy what they’re doing.
Because of the abundant training our industry is fortunate to have, this becomes an issue:
- Most speakers you see at conferences are in Scale-Up – they’re relaxed, growth is coming easily, and they have the time and profit margin to invest in many things including holidays. (Sell Up presenters are also around, but it’s a lot rarer for businesses to make it that far so they are few and far between).
- Nobody wants to hear a Start Up agent lamenting how many hundred phone calls they made this week for 2 appraisals or the jaded Principal who has been in business 15+ years and lost their mojo.
- So I hear very few Start Up or Step Up stories. And the principals who are in that part of the cycle feel like they’re doing something wrong, and they’re bad at what they do, as opposed to being in a perfectly normal place that others like them have faced and survived.