Don’t be a bottleneck: Getting leverage for your real estate business
- Ali Spicer
- Feb 20, 2018
- 4 min read
If you’re looking for growth in your real estate business, there are a lot of ways to achieve that. There is no one path to reaching your business goals. There are, however, some core principles that can be molded to your style and approach, and are essential to fostering that growth. One of those principles is: leverage.
At some point in your journey to build the real estate business you dream of you’re going to become a bottleneck. That’s right, you’ll become a bottleneck on your own business. Why? Because there is only one of you, there are only 24 hours in a day, and there are dozens of different balls that must be kept in the air to run a successful real estate business. One human cannot successfully conceptualize, organized and execute everything that must be done, at the high level at which it must be done, and build a thriving, successful business. Balls. Will. DROP. It’s that simple.
If we agree that leverage is essential, the next question is: how do you get it? You can hire someone to do just about anything, so you’re virtually unlimited in WHAT you can use the leverage for. (If you’re so inclined, you can hire someone to do cartwheels across your office all day to inspire you to keep working hard. Whatever floats your boat.) HOW you get leverage, however, is a bit more streamlined. There are two main options.
Employees
One option is to take on a part or full-time employee. There are many significant implications to taking on employees, so if you feel this might be the path for you, you should do your research fully and completely before going down this road.
One implication is that whether you produce or not—whether you’re closing deals or nearly starving—you will pay this employee their full, agreed upon wage. Additionally, there are tax requirements and a host of other consideration.
While taking on employees offers you the most flexibility with regard to what specific tasks your employee can complete each day, it offers you the least flexibility financially, and it’s also a significant time commitment to train your new employee.
Independent Contractors
Like an employee, you’re virtually unlimited in the types of independent contracts you can hire, but your relationship to independent contractors is significantly different than your relationship to employees. Your level of responsibly to an independent contractor is significantly reduced, both financially and otherwise.
Most notably:
If you don’t produce, you don’t pay If you’re hiring an independent contractor to complete work per transaction, or per agreement, you won’t have the overhead during those valleys of your real estate business, or the times when you’re choosing to cut back for personal reasons. This leaves you with a LOT more flexibility to manage your business to in a manner that meets not just your business, but also your life goals.
Commitment and responsibilities You don’t have to provide office space, handle the employee-related tax implications, monitor their daily progress and work habits, train them, or go through the formal hire and fire process. Unless you sign an agreement with an independent contractor that says otherwise (which we don’t recommend), you have no obligations beyond paying for work you’ve hired them to complete. Additionally, going the independent contractor route allows you to “give it a try” with very limited commitment, and if you don't like the experience, you don't have to fire them. You just move on, and don't hire them again. No conversations about giving someone a raise because they think they deserve it, for continuing to show up every day. No agreeing to time-off during your busiest season of the year because their sister is having a baby across the state and they just HAVE to be there for that. No taking time out of your already maxed out schedule to train them, for the third time, on your system for handling transactions. No awkward conversations about “going your separate ways.”
Hiring an independent contractor for transaction management/transaction coordination has all the up sides, without the scary downsides of hiring an employee. (If you’d to learn more about what a transaction manger does, visit this article.) You will literally be gaining back hours of time, per transaction. This significantly impacts your bottom line, financially, and otherwise. A good transaction manager gives you back your precious time. You can:
Review your goals The fact that you set them is great, but if you don’t take time to revisit them, and monitor your progress on a consistent basis, they’re useless.
Strategize You completed your goal review and see you’re ahead in some areas, but lagging behind in others. How are you going to restructure to achieve your targets?
Prospect In real estate it’s pretty simple, either you have clients and are closing deals, or you don’t. No prospecting = no clients = no deals. See, real estate math isn’t hard at all. If you’re spending hours managing the transactions you already have, you’re not spending those hours figuring out who the next client you’re going to help is.
Have a social life and/or family Real estate agents are some of the most productive people in the world, simply because they have to be; If they’re not productive every day, they don’t last in the industry. There is just a LOT to do when you’re building a real estate business; a lot to get done every single day. But somewhere along the line you might want to have dinner with your significant other, or watch your kid play soccer. You may want to attend a birthday party, or take a vacation. When you leverage your time with a transaction manger, the time you get back belongs to YOU, to spend however will most enrich your life.
Hiring an independent contractor to handle your transaction management is one path to accomplishing your real estate business goals and building a life you're excited to live. If you’re interested in learning more about what Fine Point Transaction Management can do for you and your business, contact us here.
Fine Point Transaction Management LLC is an Idaho based real estate transaction management company. We believe strong businesses are the foundation of strong communities. We exist to support local real estate agents who desire to build strong businesses through time-leverage.
Comments