Anyone who’s read my columns knows I champion the concept of top-performing agents launching their own business and creating a brand, writes Dan Argent. It’s exhilarating to have your name out there, building an enviable reputation.
But I have to come clean about something. There are circumstances under which working for yourself is tough — in fact, it can downright suck.
Here’s my take about when striking out on your own can drag you down. The good news is, I also have the solution to stop you potentially becoming an overwhelmed and underpaid business owner.
The shit stuff
There’s an initial buzz that comes with opening your own shop for the first time.
You get to put your name on the door, update your LinkedIn profile to “business owner/entrepreneur” and start making decisions like whether to repaint your car in your new corporate colours.
It’s similar in feeling to moving out of your parents’ home for the first time. The possibilities are unlimited, and your potential is endless. You get to dream big and make things happen.
But reality soon sets in. Living solo is hard work. You’ve got to get your electricity connected, pay the rent, do the shopping and prepare meals. You need to have a budget so you don’t go broke each week. There’s cleaning and maintenance, too. And when you get stuck with a flat battery or punctured tire, there’s no guarantee someone will come and get you.
It’s the same with a new small business.
There’s the inevitable struggle with business structures and accounting. Are you a sole trader or is it a partnership? The wrong decision could have income implications.
Accounting and legal are another challenging element. In your old job, there was a department who looked after that. Now that you’re a self-starter, who will keep track of what money is coming in the door and what’s going out? Also, do you have the correct structures for trust accounts?
And then there’s tax and the dreaded BAS roundabout. You need to set aside enough to avoid a large, unwieldy bill in the future, but also make sure you can pay yourself adequately.
This stuff is just no fun.
And, as you grow, personnel management becomes a battle. Suddenly, business life is not so cut and dried because you are dealing with other personalities and their emotions. You might find a talented administrator, but if they’re taking constant leave to deal with a family matter, you won’t have the resources to employ temps every other week.
And then there’s marketing and promotion. As agents, we often feel as though we’re experts in exposure and sales, but the skills you need to promote and sell your business are a little different to those required for housing. There’s so much logistics — from items such as business cards and sign boards through to marketing paraphernalia like stubbier coolers and water bottles.
And before you even get all that, how about marketing design? You need to create professional, eye-catching logos, plus corporate fonts and colours. The sorts of components that will carry through whenever people see your brand.
They’re all necessary when you decide to hang a shingle and start your own business, but who has the time, cash flow and skills to tackle all of this from the get-go?
And worse of all — these tasks keep you away from doing the things which actually help generate income and utilise your specialist skills around listings, marketing and selling real estate. Every minute you spend tackling the process of opening and running a business is 60 seconds less used to sell a property.
There is a solution
For all the excitement that comes with starting a business, it can soon become a drag… but there is a way to avoid the grief.
We live in the era of outsourcing.
Never in history has it been so easy to find specialists you can partner with to tackle those mundane tasks and jobs beyond your skill set. There are people out there who are probably better than you at administration and logistics. Even if you are a whiz at the backend tasks, why would you waste a second of your impressive commission-earning time on running admin, when someone else can do it for a fraction of your hourly rate? It’s the very definition of opportunity cost.
And it’s not expensive. High-performing agents at big franchises already give up over half their commission to a head office supplying not much more than admin support.
In today’s environment, you can get a better level of support for no more than 30 per cent of your GCI — and in many cases, far less.
Also, no messy personnel issues. The outsourcing organisation carries all the risk of managing personnel. Imagine having the greatest administrative and marketing crew in the real estate sector at your disposal with no risk of sick days, payroll challenges or other hinderances.
Agents writing extraordinary fees for larger businesses reason that going out on their own is too much trouble… and I agree that it can be if you insist on tackling it solo. Outsourcing backend tasks removes all the administrative headaches so you can get on with what you do best: sell houses.
Once you clear this hurdle, suddenly running your own business becomes less of shitshow and more of a celebration.
By Dan Argent, UrbanX