If you're not one of her 1 million YouTube subscribers or one of her 1.5 million Instagram followers, you may not be familiar with small business guru Codie Sanchez. However, for her fans and followers, she's a font of wisdom on acquisitions, operations and scale of everything from car washes to laundromats and other, as she calls them, "boring businesses."
Now we all know that real estate is anything but boring, but it's also a small business. While too many agents think of themselves as salespeople (or worse yet, order takers), the reality is that they're entrepreneurs and business owners.
Because many agents also work alone, it can become complicated to scale. There are only so many buyers you can work with at one time and provide solid service, so you move up to listings. That's one way of adding leverage.
At that point, you'll either need to begin outsourcing aspects of the transaction or bring in help, usually in the form of an administrative assistant. That adds additional leverage.
This is the point where people often get stuck. From here, you can become a team leader, a broker-owner, or a managing broker. You can start taking on additional leadership roles in the local, state, or national association. But everything you do to scale adds expenses, responsibilities, and complications, so you need to be ready.
Whether you're a new agent just starting out or a seasoned agent who's ready to grow, you're going to need to grow the right way, with a solid operation and good business habits. That's where Sanchez's PROMISE method comes into play. Here are her steps to building the foundation for scale.
Profit and protected margins
This is all about keeping track of what you're bringing in and what's going out. Here's where you need to get serious about bookkeeping, hire an accountant/tax advisor, and optimize your ownership structure. You need to control costs, especially the recurring costs you're committing to.
You need to know your numbers and have cash reserves for the unexpected. This is work you'll need to commit to over the long haul because it will always be important.
Recurring revenue
Small service businesses can create subscriptions and loyalty programs for recurring revenue. That's harder for real estate professionals since it may be years before a client transacts again. For this reason, many, if not most, real estate agents avoid the hard work of keeping up with clients after the closing. This is a mistake.
If you want to build scale, you've got to play the long game. That means your goal is to make every client a client for life. Reach out to them regularly with value-added information, updated CMAs and market insights that matter. Keep your CRM updated so that you're aware of life events that might lead to a transaction, like weddings, births, divorces, and job changes.
Online presence
This is about more than a bio on your brokerage's website. You should build an independent online presence through continuous content creation, whether that's a blog, a YouTube channel or a podcast. You need an SEO-optimized website and multi-channel social media platforms for distribution. These are not options any longer. They're essential.
Mouth-to-mouth marketing
A referral-based business turns every transaction into an opportunity to create deliriously happy cheerleaders for your business. That's exponential scale, because your sphere of influence (SOI) is compounded by the SOI of everyone you know. When you talk about your business, when you reach out regularly, when you ensure that whenever your friends, family members, or past clients meet someone who needs to buy or sell, they mention your name — that's how you build scale.
Interpersonal relationships
At first, this is about talking to your neighbors and friends. Later, it's about being visible in the community, whether that means sponsoring the Little League team, having a booth at the fair, or volunteering regularly. Everything you do and everywhere you go becomes an opportunity to have authentic, meaningful conversations that lead to leads.
Sales tiers and subscriptions
This is probably the hardest aspect to build into a real estate business, but it is possible. Look for ways to differentiate the service you provide in ways that will lead to ongoing and premium revenue. This might involve implementing property management services to develop reliable monthly income. It might involve upgraded, premium listing add-ons like clean-out, repair, staging or other tiered services.
Some brokerages provide opportunities for you to break up the traditional commission structure with an a la carte menu of services. This may allow you to serve more clients in less time and develop a more consistent income while honing your skills on specific aspects of the buy or sell transaction.
Expectation-setting
This is Sanchez's name for reviews and testimonials. Develop a consistent process for requesting, gathering and sharing these. They are the single most powerful, authentic and convincing form of marketing you can implement.
This is not a get-rich-quick plan, nor will it be easy. But cover your bases on all these counts and you'll build a business that's ready to grow and scale, just the way you want it.