On a recent social media post, the following question was asked for opinions and feedback: “I have just opened my new real estate agency in Sydney (currently virtual) and I am after a bit of advice and curious on your preference to having a shopfront or a virtual office?”
It’s a fantastic and often-asked question because it really sets the scene for multiple and varied points of view, and some very heated debates between the “for” and the “against”.’ And I must admit, I love the debate!
Why? Because there is never, and I mean never, a one-size-fits-all model to operate a successful and profitable agency.
Before providing some possible advice, we must point out that the “virtual office” is a term that is most often referred to as an agent working from “home” or “mobile agent” and/or those agents working from a “serviced” office; premises that have shared office facilities with other local businesses housed in an office complex that does not have ‘high street’ frontage.
The reason it’s important to highlight the difference is that when this question is asked, it’s because people are wanting to know if the “shopfront” represents an added advantage, i.e. greater exposure and more credibility in the marketplace and thus a greater opportunity to win business.
One might hope that it could be a clear black-and-white answer, a simple yes or no to either choice. However, it’s not, as I outline a number of items to consider before making a decision:
- When evaluating the premises, include rent, outgoings, reception, cleaning, insurance, maintenance, fitout costs etc. to come to an overall “$” annual cost. Calculate the difference between a shopfront and virtual office and determine with the difference, can those savings be invested to give you the same or more market exposure than the shopfront?
- Your time and commitment required to managing premises. For example, when the receptionist is away (personal and annual leave), who covers the office when the team is out? This is an aspect of office premises often overlooked.
- The premises themselves. Have they significant exposure and do they have good pedestrian traffic? Achieving both is a big plus, but must be weighed up with the annual cost and whether that extra expense assists in brand recognition that converts into revenue. A great way to evaluate this is by asking those with offices, “how many clients can you identify that the premises enhanced brand awareness to the point it helped you win the business?”
- Outside of brand recognition and winning clients, premises are considered important for attracting talent. Employees value the environment they work from, including accessibility, parking and office space and facilities. Selecting the wrong premises and/or not being able to fit out professionally will be a determining factor for some. Going “cheap” on premises can be detrimental.
- Consider the downside. If there is a sudden change to your business, how favourable are the lease terms to be able to exit or on-lease?
- Can you work as a virtual agent? 2020 has highlighted a major shift towards working from home; however, it has equally highlighted that many want and crave the change of environment and desperately want to “go to work”. Many underestimate the value of being surrounded by a team and the opportunities, energy and structure working from dedicated premises provide. This is an extremely important aspect and must be thoroughly thought through.
The above is by no way an exhaustive list and there are many more aspects and points to consider.
Those evaluating either option would be best advised to complete a two-column spreadsheet and add the pros and cons of each.
Personally, I love working from a shopfront office and, in fact, our current office is over 1,000 square metres, housing up to 40 team members. However, I’m also very intimate with the numbers, our goals and options available. I’m also very clear that even with great office exposure, you still need to market to potential clients. The office simply acts as a further leverage to that marketing when the office has great street and traffic exposure.
Having said that, I do believe the agency of the future will be the “boutique” serviced office and/or off-street low-cost premises operated by self-branded lead agents with small teams and additional outsourced support. This structure provides the opportunity for high-touch client-centric teams to run highly profitable operations with low overheads and low risk.
But everything hinges on personal circumstances, experience, marketplace timing and future goals. The right choice will be different for every aspiring business owner. However, if by chance you do go down the path of office premises, consider purchasing one. But that advice could be the “Greek” in me coming out.
Manos Findikakis is the CEO and co-founder of the Eview Group.