It makes sense to build a business around a strong structure based on good people and processes - and real estate is no different.
First National Byron Bay principal Chris Hanley has spent the past year refining his ideal business structure around 13 individual boxes. “A business is a machine for making money,” Mr Hanley said. “The focus of a machine, whether it’s you on your own as a salesperson or whether you’re a leader or owner of a business, the focus is to make the machine run efficiently. It’s got working parts that need to be looked at, reviewed, rebored; all of those things that you do with a car engine are exactly what you do with a real estate business,” he explained. Using the car analogy, developing good people within a business is like working with lots of engines. Sales would be one engine, property management another, the database a third and so on. “As long as the engines work in the same direction, as long as you look after them and as long as they’re focused in the right direction, it leads to profitability and, most importantly for a boss and for the sales people, it leads to more control of your business,” Mr Hanley added.
“The other 12 really don’t matter unless you get the right people,” Mr Hanley warned, saying there was no point hiring people who were exactly like you. “You actually want people in your business who say no to you; you want people who question you; you want people who get up your nose and challenge you.”
The culture within a business must reflect the needs of everyone from the juniors right through to the principal. A good business culture is one where the owner knows staff well enough to know – and care – about their lives outside work.
“[Culture] is how you dress; it’s how you talk to people; it’s what words you use to address people; it’s how or whether you say thank you to people; even if you’re the boss; culture is a lot of little things that roll in together to this one great big thing,” Mr Hanley explained.
Prospecting is one of the most important aspects in a real estate business, but it's often not taught properly. It is the tool that brings new business in month after month. “Unless you get off your bum and go find your own stock, you’ll starve. Prospecting is not something that you can choose to do or not to do; it is essential.”
“What you need to do is give people good quality, objective, clean, free stuff over a period of time and then they will become addicted to that stuff,” Mr Hanley said. By this he means objective information about the market to build loyalty and trust over time. “It takes about 18 months to build up a level of trust and loyalty and then in most instances, they’ll call you when they want to sell that property.”
Using Mahatma Ghandi’s quote, “First they ignore you, then they laugh at you, then they attack you, then you win,” Mr Hanley illustrated the price adjustment process. He said unless there was a system that everybody in the business trained on, agreed with and believed in, old stock would never be moved and there would be no room for new stock.
When it comes to the words used to communicate a business’ offering to the public, buyers, sellers, landlords, tenants and internally, quantity is not better than quality. “If the words you use are good and simple, but powerful, then it will be a significant advantage to your business. If you’re no good at words yourself, that’s fine, you go find someone who’s good with words.”
“People don’t do business with the brand, or the wrapper on the outside, they actually do business with the salesperson that they’ve got the relationship with in that business,” Mr Hanley said. The brand goes beyond the logo and tagline to the bigger picture that encompasses the business, words, photography, people and processes. Once a brand has been established, it should also be protected to ensure it is represented correctly.
A successful business needs a marketing policy that includes templates, methods for placing advertising, the way photography and signage should be done and words are written, and this should be measured and tweaked over time. Mr Hanley said permissionbased marketing worked best for his business. “Once you start marketing to a database that trusts you and once you start giving them good, clean information, it’s amazing the yields you get out of that,” he said.
“You should be asking questions; you shouldn’t be afraid of silence; you should be letting the owner talk into silence, letting them fill up the gaps and you should just be spending the time there finding out information so that you can help with a prognosis. What matters to owners is people who listen, and knowing and trusting the person and being in good hands,” he said. Mr Hanley’s four rules to a perfect listing presentation are: 1. Shut up; 2. Listen; 3. Ask great questions; and 4. Listen some more and write notes.
If a real estate agent is part of their community, especially if they are passionate about what they are doing, they will gain business, but also feel good about that involvement. “You can do great community work and it can be incredibly profitable. A lot of people think if you do some of those things, its time consuming and it costs you money, but it doesn’t.”
“When we get hold of a buyer their details go in three separate books and we pay a lot of attention to them, give them a lot of love, a lot of education. We spend a lot of time with them and we’ve got a very high rate of conversion with buyers into sales.” Mr Hanley’s buyer policy includes when to call them back, what to say, questions to ask and the appropriate timeframe for all this to happen.
When it comes to management, Mr Hanley takes his lead from this poem: “I keep six honest serving men/They taught me all I know/ Their names are what and why and when and how and where and who”. It’s being able to answer these questions that makes a good manager, he said.
“You’re better off as a leader making decisions that are wrong, than making no decision at all,” he said, because nobody likes working for people who are indecisive. “People have got to want to follow you.”
Anyone who concentrates on getting these boxes right can run a profitable business, whether it is made up of one or 100 people, operating alone, as an EBU or as a team in a large organisation.