Our Secret to Expanding Faster

O*NO! You know you want to expand, and you’ve heard of different ways other agents are doing it, but you’re not really sure where to start. Don’t worry - one easy way to get you started is through strategic partnerships.

What is a Strategic Partnership?

Strategic partnerships are very different to the relationship you have with your business partner or shareholders. These strategic partnerships are external to your business. 

Now, these come in so many forms. You would have heard of joint ventures, partnerships, referral arrangements, commission splits, profit shares, affiliates, shared asset ownership, services agreements, brand & IP licensing, franchising, outsourced property management for sales, outsourced PM for developers - and the list goes on. Each type of relationship is right for different reasons. 

If you want to have ‘skin in the game’ together, then maybe a JV is right for you. If you want to keep control of your business but want to increase revenue, then a referral-based relationship will work better. If you are a sales agent wanting to build a rent roll but not wanting the headache of managing it, an outsourced PM arrangement would be perfect for you.

Plan the Attack

So, you know that you want to expand. You want to make more money and increase the value of your agency, but maybe you aren’t sure what to do next. Like anything in business, you need a plan. 

Work out what you want to achieve – do you want more revenue or are you looking to build a capital asset that you can sell for value later? Once you know what your end game is, it will be easier to work out how to get from today to the future. Always start with the end in mind, whether it be revenue or capital growth targets, then reverse engineer your steps.

Join Forces

When joining forces, the number one thing you need to look for is whether your values and ambition are aligned.

You will also need to be very clear on the benefits each person will receive. For example, if we look at the outsourced PM model for sales agents, the sales agent will receive a capital asset, steady cash flow, repeat business and wider brand exposure. The property manager who is performing the services will receive an increase in revenue, increase in cash flow, larger referral base and wider brand exposure.

When we are clear on the benefits and ensure alignment in values and approach, then our strategic partnerships have a much greater chance of success. 

Seal the Deal

Once you know the type of relationship you want, who you want to team up with, and the benefits - it’s at this stage you will need to seal the deal.

The worst thing that can happen to this type of arrangement is for it to go sour over a misunderstanding. If this happens we can get distracted, take our eye off the ball and lose control over our agency. Put simply, we lose time and money as we get consumed with what is often starts out as a petty ‘relationship issue’.  

So to seal the deal, we need to create a relationship roadmap which sets out the rules upfront. We do this to ensure we are all working toward the same goals and when bumps in the road come up, our wheels don’t fall off. 

But how do we do this you ask? Don’t yawn when I say this - but we need to document the relationship. (Yes, that means contracts!)

Takeaway

To expand faster we need to:
·        Plan the attack – work out which type of strategic partnership will work for you.
·        Join forces – find the RIGHT partner.
·        Seal the deal – draw up your relationship map.


Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.