Yet another estate agent opening in Grantham, that is the third in the last twelve months. Small one office estate agents and small letting agents rule estate agency row .. and some want to get bigger by opening new offices in neighbouring towns. Many successful businesses are easily scaled. The owner has created something that can be repeated, a service that can be mass produced, a method that can be franchised (like McDonalds). Scaling up serves more customers and benefits the original founding business owner
But some businesses, maybe yours Mrs Letting Agency or Mr Estate Agency, are built around you and the decisions, new ideas, new thoughts and new work you do on a regular basis. You might be the top dog agent in your town, so also feel under pressure to scale and open another office and then another office, and that might be, in my humble opinion, a huge mistake.
To get bigger, how can you replicate your one office lettings or estate agency business to another office when your lettings or estate agency business, that is based on the insight, liveliness, razzledazzle and passion of YOU and very rarely, a few of your people. Look at my previous roles and you will see I have had a lot of experience in this matter (one office vs multiple offices) . Unless you have invented a cloning machine, you can’t be in two places at once.
Don’t get me wrong, it can be done. I would say no more than a sixth (16%) of multiple office lettings or estate agency business I have come across replicate the magic in the second, third and so forth offices. The others have had to standardise, catalogue and rationalise, so that it can hire people who care a little less, know a little less and work a little less, because, after all, they just work there. Which means that in order to get bigger, the small lettings or estate agency business owner sacrifices the very thing that brought in business in the first place. Let me explain ...
Ok, here is a question to all those agents considering opening up another office. What if getting bigger is not the point? What if you simply got better?
I went to a guy in Hertfordshire last week. Using Rightmove Plus, you can calculate an agents lettings portfolio to within 5% (ring me if you want to know how – it’s dead easy). Anyway, he is the No.1 letting agent in his town, over 600 rental properties under management and we worked out he had 18% market share .... ‘That’s great’, I said’ ‘ ..but the only reason you do so well is because of you and the way you motivate your team. Before you go and spend £30,000 on a shop fit in the next town along then run the office at a loss of £10,000 a month before you breakeven in 18 months time (so that would be another £100,000 to £120,000 to cover the losses in those 18 months), taking your market share from 0% to 3% in the new town, surely it would be easier to sharpen your act and go from 18% in the current town to 21%, take your portfolio from 600 to 700 .. and most of that would be pure profit?’
I know of another agent who has two offices. His first office he opened ten years ago and he is he is ‘king daddio letting agent’ now. Similar numbers to the first guy (500 in managed stock and 15% market share .. No.1 for lettings). He went and opened up a second office seven years ago, and that has stagnated at 110 rental properties (and has done for over four years). He spends four days at the big office and one day at the small office. No wonder it’s not had the same growth as the first.
If you are as good as you think you are, and the numbers/market share show that, then it is entirely possible that you are a special unique snowflake that your distinctive point of view, understanding and care are exactly what the local landlords and sellers want. So if you go and open that second office and what I say is true, then hiring people to be almost as good as you is not going to lead to more of what you seek. It just means that you're working harder than ever to cover for people who can't quite figure out how to be you.
So if you are gong to open a second office, this is how I would suggest doing it .. instead of opening your office, then taking on the people to fill the roles... why not instead acknowledge your ‘mojo’, your secret weapon is real, but here is the killer part, secondly, find then hire the best people at your first office, and if they really can help you do what you do best and uniquely, because they work for you and understand what you and the company are all about BECAUSE of your special mojo, then you can open the second office because they will know the magic.
You see, it’s not all about replicating yourself, focus your mind and attention instead of leveraging yourself. .. .. in all my years, that is the only way to keep the magic at your second office, then third, then fourth and so on and so forth....