Tag Archives: real estate franchise

One Agency Blog Worklife Balance Become A Free Agent
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Agents can become principals more easily with addition of new services

One Agency has added two new services to their turnkey solution, to make it easier than ever for agents to set up their own businesses, and keep more of their gross income.

One Agency founder and CEO Paul Davies said the group’s 620-plus agents and new recruits can now outsource their trust accounting and compliance, as well as their social media marketing to trusted, high-quality providers.

“A major obstacle that holds agents back from going out on their own is having to manage their own trust accounting and compliance. So we’ve solved that problem by establishing an alliance with Think Cloud Solutions, which can manage those crucial back-office tasks on behalf of the new business owner,” he said.

“Another issue is that some agents feel overwhelmed by the thought of having to handle their own social media. So we’ve solved that problem too, through an alliance with Bespoke Media, which can provide business owners with all the content they’d ever need”.

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Franchise free real estate group adds more members

One of the industry’s biggest groups continues to expand, with new members highly motivated to join a group that doesn’t charge franchise fees or insist on restrictive rules.

One Agency now has over 600 agents in Australasia, after recruiting four more in the past month – Elli Birnie (Brighton-Le-Sands, NSW), Jeff Chang (Parramatta, NSW), Hazel McGinty (Gosnells, WA) and Samantha Richards, (Toronto, NSW).

Furthermore, several of One Agency’s existing licensees in New Zealand have expanded their businesses by taking on new territories including Renate and Daniel Ochse in the Far North have expanded into Napier, while Ian Croft in Pukekohe has expanded into Papatoetoe.

Jeff Chang, who won RateMyAgent’s agent of the year for Parramatta in 2020, has moved from agent to principal after seven years in the industry.

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Industry experts reveal the hidden costs of establishing your own brand

While having your name over the door can be an enticing prospect, three industry experts say many principals underestimate the financial and emotional costs of establishing a brand. 

And, as it takes time and energy from the core business, principals should consider all their options before striking out on their own. 

Why principals are jumping ship 

Over the past few decades, the franchise model had come to dominate the Australian real estate industry. Many principals joined the big groups lured by the brand recognition and support that came with a long-established name. 

Then the internet changed the rules of the game. As a result, more principals question the franchise system, and look into going it alone. 

After all, nobody wants to pay commissions to head office and surrender a lot of control if they get little perceived value in return. 

Starting from scratch 

Nic Fren, former Real Estate agent and now, founder of Bespoke Media Group, outlined some of the initial expenses principals face building a brand from the ground up. 

“A branding kit complete with logo and colour palettes is between $10,000 and $15,000 to create,” he said. 

“A good website costs a minimum of $5,000. On top of this, comes flags, A-frames, signage, shop front and the like – so it’s easy to see how it soon stacks up.”

All these costs need to be paid before your business turns a dollar. Then it takes at least six months to discover if you are going to get a return on this investment.

And while choosing logos and fonts might be exciting at first, it eats up valuable time and headspace that should be spent winning new clients. 

“The last thing you want to do as a business owner is worry about how your newsletter templates look.”

Time is money 

Tristin Hanna, co-founder of brand and design consultancy Thursday Design, said a brand roll-out can take up to a year to complete, once all touch-points are considered.  It therefore requires a commitment to both time and budget to be delivered effectively.

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Why making more sales in 2021 is less important than you think

Have you got a goal for 2021? If not, let me suggest a goal for you – one that might take you by surprise.

No, don’t aim to make more sales in 2021. Instead, set yourself the goal of making more profits.

Last year was crazy. But it wasn’t completely unexpected – because if you study history, you know crises happen from time to time. Sooner or later, another one will occur. Maybe next year; maybe next decade. Nobody knows. All we know is that another crisis is coming.

So in 2021, whether you’re an agent or a principal, your goal should be to become more profitable. That way, no matter what happens in your local market, your business will be sustainable.

Of course, one way to increase your profits is to win more listings. But it’s also possible to make more money while making fewer sales.

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How switching real estate brands gave me the value I was looking for

Back in 1997 when I first became principal, it made sense to join a long-established franchise group. They provided me with the tools I needed for my business to grow and succeed. And it did, as my agency quickly became one of the leading franchise offices for this national brand. 

But that was then – and the internet has completely reshaped the property landscape in the subsequent years.

Everything’s online. And not just the homes we sell and rent, but also all the technology, systems, forms and documents you need to run your business successfully.

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How to move past your fear and become a principal

Five years ago, I was where you are now. Nervous and fearful about making the step up to principal, even though I had 15 years of being a successful agent under my belt.

But, at nearly 50 years old, this was my ‘now or never’ moment – and I didn’t want to live a life full of regret. So I gathered my courage and leapt.

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The biggest lesson I’ve learned from this crisis

For a moment, I want you to imagine it’s 2019 – back when none of us had heard the term ‘coronavirus’.

It was a golden time, right? Well, no, it wasn’t, it was a tough year for many. My group, One Agency, has more than 150 licensees across Australasia, and when I visited our principals and agents, I saw just how many of them were operating in tough real estate markets.

Some, though, were thriving. Why? Because they’d built businesses designed not for summer but winter.

Fast forward 12 months and those principals and agents are still doing well, despite COVID.

That leads on to the biggest lesson I’ve learned from this crisis: you can never predict what will happen to your local market or the wider economy. So you need to build a business that can do well in any environment. How? By doing these three things:

  • Protect your revenue
  • Minimise your costs
  • Master your mindset

How to protect your revenue

Sales revenue is unpredictable, because you have no control over whether your local market goes up, down or sideways.

Property management revenue, though, is largely predictable, because rents are much less volatile than sales prices and volumes. That’s why every agency with a rent roll is safer.

Big or small, even one-person agencies can build rent rolls – you just outsource the different property management functions to freelance staff. One Agency has businesses of every size, including several solo operators, who do sales while managing more than 50 properties.

How to reduce your costs

You have limited control over your revenue, but you have complete control over your costs.

Remember: it’s not what you make, it’s what you keep that counts. That’s why you need to minimise your fixed costs and take a close look at your variable costs. Some ideas include:

  • Move from expensive main street premises to a cheaper, less visible office, or virtual office – these days, a strong digital presence is much more important than a strong physical presence
  • Send some tasks offshore – outsourcing will not only save you money, it will also make it easier for you to scale up and down when your revenue rises and falls
  • Refinance your debts – interest rates are at record lows, so you could potentially save thousands of dollars per year by investigating current lower-rate loans
  • Hold your group accountable – if you work with a branded group, research the market to see if you can find a group that will give you the same service for lower fees, as there is no such thing as a best brand, only a best operator

How to master your mindset

During my decades in real estate, I’ve learned that the market always turns – for better and worse.

You need to build a mindset that can handle these ups and downs. You can’t allow your mood to go up and down in tandem with the market, because that’s not sustainable.

When the market is booming, you need to remain level-headed; when the market is tanking, you need to remain optimistic.

Have a plan, work the plan and reset as necessary. A strategy with a goal keeps you focused.

So work hard on yourself. Hang out with positive people. Read personal development books. Take care of your physical and mental health. If you’re feeling down, don’t be afraid to ask for help.

Andrew Reeves
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Your 5-step guide to transitioning from agent to principal

Do you want to step up from agent to business owner? If so, let me explain exactly how to do it. The process is simple, although it does require a lot of hard work and sacrifices.

By way of background, I started my business in 2013; four years later, it was named One Agency International Office of the Year. By the time I sold my business in 2020, it had two offices, 20 staff, 420 properties under management and annual GCI of $3 million. So the five-step process I’m about to share really does work.

First, you need at least five years of industry experience, so you understand the ins and outs of real estate. I had 14 years of experience when I opened my business, although, in hindsight, I realise I could’ve made the jump years earlier.

Second, you need to take advice from those who have been there and done that. An obvious way to do that is to join a group. I think I would’ve been successful if I’d gone out as an independent, but it would’ve been harder and taken longer. By joining a group, I was given all the back-end support I needed, which allowed me to focus on growing my business and maximising my profits. Another thing I did was seek outside support – I used a business coach and a property management consultant to become a better principal.

Third, you need to focus on building a rent roll. A rent roll is the foundation of your business. It gives you consistent income, which allows you to get through different kinds of markets. If you build a rent roll, you’ve always got a saleable asset. It also helps you in your local market, because it means more signs, more marketing and more exposure, which allows you to grow your brand. Whenever you sell a property to an investor, try to turn that buyer into a property management client.

Fourth, you need to remember the saying that One Agency founder and CEO Paul Davies has become famous for – it’s not what you make, it’s what you keep that counts. Profits are far more important than revenue. Always look for ways to minimise your costs, especially your fixed costs. (One reason I chose One Agency was because I didn’t have to pay commissions to head office.) Also, defend your income by building a rent roll.

Fifth, you need to see relationships as a form of currency. Our game is all about relationships, but they take time to build. The more people you get to know, and the more effort you invest in nurturing those relationships, the more clients and referrals you’ll attract.

One Agency Group Blog Why Are So Many Agents Leaving Real Estate
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Why Covid 19 has many agents thinking about leaving

Real estate has long been a ticket to easy money, of course the reality is VERY different.

Being part of a competitive industry that is subject to supply and demand market fluctuations means you have a fluctuating income. And, it can be challenging to stay on top of finances. As much as it is essential to prepare for rainy days, if you are not making a lot of money, this may not be possible.

The onset of Covid 19 and the economic and social implications of lockdown have brought the reality of this home to many.  Whilst some have re-evaluated their career choices and are considering leaving the industry, others took the opportunity to reflect on the way they operate in the industry.

While some people think that Agents keep every $ of commission they receive, the reality is very different. Whether you work within a franchised office, as a sole trader, or as a Principal, there are costs-for-doing business, and fee split responsibilities.  Whilst researching my book ‘How to Profit in Real Estate Business Ownership’ I found the cost to run many offices is as much as .90c in the dollar, leaving little margin for a rainy day.

During the lockdown period I spoke with many agents and business owners.

Rob Groat Real Estate Franchise
Real Estate Brand, Real Estate Franchise

Real Estate Franchise Principal Moves to One Agency

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Prior to joining One Agency in January 2016, Rob Groat owned a Ray White franchise.

He wanted to seek a break from the traditional real estate franchise model which was becoming restrictive, increasing in cost and less personal to work under.  

Rob, who has been in real estate since January 2003, and his business partner, Tom Paton, opened One Agency Albury Wodonga on the border of Victoria and NSW. The opportunity to gain full control of their business and yet have the support of modern technology and marketing – plus the fact that they retain 100% of commission – were both major draw cards in their decision to join One Agency.

“We briefly thought about starting up as an independent agency,” says Rob, “but the work and worry of setting up the support structures and systems soon ruled that out. After a good deal of research we just couldn’t find any negative reason to not want to join One Agency and we had no concerns from that point that this was the correct move to make for our business.”

Making the decision to commit to a new career move is often terrifying. With a supportive network of fellow One Agency members, however, Rob was both well informed and well prepared when it came to making the final choice. Before opening the Albury Wodonga agency, he said he spoke to “6 to 8 established offices [of One Agency]”, all in various areas of Australia. Along with One Agency’s efficient and streamlined setup, the initial process ran – asserts Rob – ‘smoothly’.

Despite a smooth setup process and a supportive list of contacts, leaving a big agency like Ray White doesn’t come without an inevitable barrage of ‘what if’s?’ For Rob, it was a little under 5 years before he was finally able to put his desire to leave the company into action. Initially, fearing the enormity of setting up as an independent agency, he considered signing a new franchise. Fortunately, that changed when he was made aware of the One Agency brand and the freedom it would allow him as an agent and business owner.

Commission for real estate agents, Real Estate Brand, Real Estate Business, Real Estate Franchise

Independent, Licensee, Franchisee or Marketing Group?

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If you’re a real estate agent navigating the minefield of setting up your own real estate business, no doubt you’re considering which business model will suit you and your wallet best. Will it be Independent, Licensee, Franchisee or Marketing Group?

But what is most important? Is it choosing the right business model? Or is the individual agent and their ability to attract listings more critical? We believe that the agent is the most important and key element to success, so there’s no one correct choice as to which business model is right for you.

Some recent statistics on a REB+ article called ‘Employer of Choice’ recently showed that a majority of agents want to start as an independent agency rather than entering via an expensive and tightly controlled franchise. Given the choice, most agents want the freedom to run their own business in their own way.

At One Agency, that’s what we offer. We attract many highly successful real estate agents who want to secure their own financial future by setting up a real estate business. Most of them have looked at the figures for setting up an independent brand and know that it will cost them big bucks and put unnecessary strain on a new business starting up. They also understand that it’s likely to take far longer to establish themselves in the marketplace.

Real Estate Franchise
Real Estate Business, Real Estate Business Profit, Real Estate Franchise

Why Traditional Real Estate Franchise Models Are Outdated

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Running a franchise real estate business can be costly, but it’s almost impossible, as a new independent agency, to compete with the big franchises in the local marketplace. We’d go so far as to say franchise models are outdated.

Buying into established franchise models is an obvious way to get set up, but it’s both constraining and expensive.

Typically, if you run a franchise business, you are faced with brand restrictions and high costs. You’ll have to pay a percentage of your income to the franchise and they usually work on a penalty system. The more you make, the more you pay with multiple fees involved. 

There’s on-going reporting, operating parameters and expensive shop-front leases plus fit outs to be paid for. You must keep your expenses well under the expected income you can generate to have a profitable and sustainable business.

Commission for real estate agents, Job Security in Real Estate, Property Business Brand, Real Estate, Real Estate Commission, Real Estate Franchise

Real Estate Business – Is FEAR Holding You Back?

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As the Managing Director of One Agency I talk to a lot of real estate agents who are unhappy in their current situation.

Many are considering taking the leap into starting their own agency and the biggest hurdle in making that decision is often fear.

An acronym I like for FEAR is False Evidence Appearing Real. You may be sick of working for a principal who retains more than 50% of your hard earned commission, or you may be a principal who is sick of feeding the ever hungry franchise head office with your hard earned profits. What’s stopping you from taking control of your financial future?

If you are fearful of opening your own business or moving out from the constraints of a traditional franchise, it would be productive to identify what the specific items are, that make you feel that way.

You need to analyse each of those fears and determine if they are ‘real’ or not.

Fear is a paralysing emotion and generally doesn’t achieve anything much positive. That is of course unless it’s fear your personal safety, such as crossing a busy road, which is to be respected. However for the most part, when we look back at what we were once fearful of we often find that we have usually moved on and it no longer applies.  This is what typically happens if you plan to open a business, you feel the fear and then do it anyway, then wonder what it was you were fearful about in the first place! The perceived fear is ALWAYS greater than the actual situation, in other words, it’s never as bad as you think.

So let’s talk specifics.  You’d love to have your own business (and who wouldn’t like the freedom AND BENEFITS that brings?) but you are fearful. The first thing you should know is that you are completely normal. Totally and utterly normal.

Whenever we step into unfamiliar territory and take a leap of faith, we don’t know what may occur and therefore it makes sense to have certain amount of fear and trepidation. That’s to be expected and it’s perfectly understandable.