The Good, Bad & Ugly: How to Build a Business Without Sacrificing Your Time and Freedom

Welcome back to another edition of the Business Freedom Podcast. I'm Lars Hedge, I'm the founder of Real Estate B School. And today we're going to get into another good, Bad, ugly edition of the podcast. This is where I really can just share my thoughts about the good things I've done about building businesses and the things that I've done that are not so good. The challenges I've had, the pitfalls that I want you to avoid and today I want to get into. I talk a lot about systems and what it looks like to build a business based on systems, but I rarely get into what it takes to build a real real estate business, I like to say, or a business worth owning, a business that actually gives you time and money freedom. So today I want to answer the question and how do you go about building it? And it doesn't really matter where you are in your journey. You could be a top producing agent. So maybe you're selling two to three homes per month. You could have a small team, maybe you figured out how to sell six, eight, you know, 10 homes a month with maybe a couple admin and three or four buyer agents. But it's not quite put together the right way. Or you're overpaying your agents and you still have to be in production because you're not providing the services you could or you don't have your admin folks playing their positions at the highest levels. The systems aren't quite built the right way. So there's all these different ways, people that are attracted to the stuff I talk about. Or you could have a high level team and it's not put together the right way, where it's not actually a business worth owning and you're super stressed, you're not making enough money to make the time and stress worth it. So let's get to work answering the question, how do you build it? And this is worth taking notes on. Number one, you've got to integrate the vision. So hopefully if you heard me talk about the key drivers of a sustainable or self managed real estate business, the number one driver is roadmap. And a critical part of that driver is the fact that you have to have a vision for your personal life and for your business. So number one in terms of building this thing is to integrate the vision. The most effective strategy of building your vision into your culture is to broadcast and reinforce it at every opportunity and to systematically include it in all your activities. So at High Performance Real Estate Advisors, that's my real estate team in Charlotte, North Carolina, we Work really hard, really on a weekly, sometimes daily basis to make sure that everybody knows that where we're going and why we're going there. Every quarter we do a state of company where we talk about the vision, we talk about the fact that in 2027 we're going after a billion dollars closed in real estate and a million dollars given through our Compassion Impact program, which is serving random urgent needs in our community. And so those things are top of mind. We have props around the office to remind people why we're doing the work that we do. Culture and vision is at the heart of a scalable business. Whether it's in the real estate industry or any other industry. That's number one, integrate the vision. Number two is build the structure, right? So even if it's just you, you have to have an eye toward what you're building, right? This includes organizational strategies, reporting relationships as well as I know you guys don't like to talk about rules and processes, rewards, values or even unconscious business assumptions. So that's build the structure and it's really anything that influence behavior and directs the flow of human energy. So to have a scalable business, a self managed business, it's got to be one that runs without you. And so these rules, rewards, values and assumptions that are going on every day have to happen whether you're there or not. And it does take, you know, it's sort of an I do, we do, you do type thing. Like when you're building this thing, it's just you, right? If you're just a top producing agent, maybe have one admin, it's I do, then it's we do. You and your admin come together, put a few systems in place, buyer sales processes and marketing pillars. And you know, maybe this is how you work with buyers. Contract to close sellers, contract to close seller, client care, all the back office technology to support all that. Then you bring on a couple, three buyer agents and then that admin is able to hire a VA or a junior admin. And now you have three, two or three, four agents to sort of scale up and ramp up. And then it's we do it and so you're doing it with them. And then ultimately you know that ops person graduates or you can hire another admin. You're at five or six buyer agents, one of which or two of which are standoffs to take over the listing side of the business. And then now it's taking on a life of its own. And so you've got to build the structure with the end in Mind number three is to train and provide the tools. I think this is where most team leaders fail. I know for many, many years I failed in this area. High performance. So you'll hear me talk about high performance real estate team and what that looks like an hpret and how it's different than traditional teams and I'll go over it here in a second. But high performance isn't generic. Even the brightest and most highly motivated team members need to be trained to do it your way with the best tools available to help them do it right. So in our toolbox, the Rebs toolbox, we have 10 technology tools, 10 technology tools that your team has to be trained on and to be able to use them at the highest level. And we have a very systematic way that when we take one of our agents takes a listing and hands it to listing client care, the calls, the emails, sequences that go out, the specific steps we use to pre, the pre list process, the coming soon marketing, the open houses that we hold that, you know, the mega open houses and everything that happens from when we receive an offer to price reduction sequences to market reviews, all of that, we have processes developed for that and we train very specifically on those systems. Number four is to quantify and evaluate. So it's this constant feedback system where high performance real estate teams of any kind need regular attention to keep them calibrated and aligned. And this is done through tracking, which is the finance driver. And if you've spent any time with me at all, you know that I am, I live and die in the toolbox. And the drivers, the six drivers of building a highly successful team, the good news and the bad news, I guess you can put it, is that it all starts with you. So building a leveraged real estate team, it all starts with you. So you as the team leader, you are in charge of articulating, articulating the vision and reinforcing it and protecting it every step of the way. Just read a really good book, I think it was by Daniel Coyne called the Culture Code. He talks about high performance hotspots I think is what he calls it and how coaches of the highest performing athletes like what they are about. And really it is about fewer words but repeating the vision of where the team's going and how to get there. And you got to remember that you aren't selling your team on your dream and you really shouldn't try to. You don't want them to comply, you want them to enroll. So the vision is clear, we're going this way. And here's how we're getting there. Here are the positions in the team that we need to fill to get to a billion. I'm talking for high performance real estate advisors. So I don't want compliance. I want you to enroll in that vision. I want you to get excited about that vision. I want you to fit the core values and help us lift this big thing that is going to run fast to get there. Right? You want your team to enrich your vision with their own objectives so their wants and needs have to fit into the ultimate vision of the business. You want to create this common goal and a common spirit. And this one here is a tough one. It's that your attitude toward your team and their role in reaching your vision will set the tone for your company's culture. Right? If you're building a team that is there to serve you versus you to serve the team and for everyone to serve a bigger purpose and culture, it will fail. You have to think of your team members as co creators and and heroes in this journey. And the tough part of this is that no matter where you are in your life. But let's talk about your business specifically, it's an expression of you. And so if your business is failing, that's on you, right? Your business is. It's an expression of you, but it's what you care about, what you don't care enough about. Your values, your courage, your fears, your experiences, all of it wrapped up into this thing that you go to every day that you're looking to get people to come on board and help you achieve this vision. Right? This could be hard to accept, but it's also very exciting and it's a huge responsibility. Every choice you make within your team, within your business, has a bigger impact than anyone else's and that's good or bad. You can make some great decisions that rally the troops and get everybody on board to make. Maybe double down on new business development for 60 or 90 days so that you have an awesome 60 or 90 days past that effort. Or maybe you come back from a conference with a horrible idea that you redirect everyone's efforts and your admin staff to. And then two weeks later it's like the thing is not important and it's gone. Your team has agreed to work for you and take your lead and so they constantly look to you for direction, guidance and approval. You've got to realize that your team is always looking at you. So if you're disorganized, then your business will tend to be disorganized. If you're afraid to let go and you can't delegate, your team will avoid taking responsibility. If you're an idea generator, or we like to call this squirrel chaser, then your team might be cynical about change. And so you really have to think about what you're building with every decision you make. And here's the thing, traditional real estate teams are going to fail because they're not built on sound business principles. And so you've got to ask yourself the question. I see a lot of teams that basically their agents get to a point where they don't see the value of lower splits and they hold the team leader hostage. So do you want to be in a hostage crisis situation or ultimately do you want to build a business where you're the praised leader or at least where your team values you as the leader? Right. So just because you're making the shift from being in production, working with buyers and sellers, to being more of an owner and a coach and a true rainmaker, your team has to value that shift. And traditional team leaders in traditional teams generate income and gain time leverage by simply distributing leads to their agents. That's a traditional team in our industry right now. And I really call that a brokerage within a brokerage. High splits to agents, which are fine, but they're not providing all of the services and the constructs and the frameworks, tools and systems and strategies for not only agents to be happy with being on the team and fulfilled and feeling valued and feeling fairly compensated, but also buyers and sellers aren't getting the best service possible. Any gains in that model are at the expense of losing control of delivering the value proposition to clients. And basically in that model, because the business isn't providing the client experience, the lifetime value of the client is with the agent. And human nature has proven over and over again that individual real estate agents, or even agents within a traditional team, which I don't consider our team, the one I'm building, the one I coach to, to be traditional. That's basically what ends up happening, is that you hand over the lifetime value of the client, you don't serve that client forever and the agent fails to. And so you're constantly paying for leads and generating new business. When you're failing to serve your past clients at the highest level. And to make matters worse, commission based, top performing agents, like I said earlier, in the traditional team model, they ultimately leave to compete with you because they're not seeing the value or feeling the value or feeling valued rather or they demand a higher commission split and it doesn't fit with the economic model. If you even have an economic model and if you're just starting out, you don't know what an economic model means and you want to build a team. That means you definitely need to reach out and get on the phone with one of our coaches or myself for a free business growth strategy session. Because that is the critical decision you'll make is are you going to go down the brokerage loose collection of agents path or are you going to go down a real real estate business, one that's based on sound business principles where high, high value add to agents and also a high client experience to buyers and sellers. You have to have a clear value proposition and know what your value is to your team so you aren't held hostage by your agents. I want to quickly go through the three worlds I see right now. And this doesn't include the aggregators like zillow or realtor.com it doesn't include some of the technology plays that are, that are coming our way for our industry. I want to go through really what a general brokerage looks like, what a traditional team looks like in our industry and then what a high performance real estate team looks like. We call this the high performance difference on our team general brokerage is there are no standards, there's no training support, there's no culture, structure or cadence. Agents are basically just hanging their license. It's for the masses, a bunch of amateurs. Low, low margins. If any profit agents are lucky if they sell eight to 10 homes per year, you cannot scale this model. There's no client experience whatsoever and there's no prospecting. And agents are a jack of all trades. Traditional teams, you know, there are traditional teams out there that sell a lot of homes, but they have low standards, only provide their agents and team members some training and support. It's a loose culture, structure and cadence and really it's okay to have wrong people so they're not really worried about having a tight culture. We call this the minor league, right? So it's, you know, a little higher margins where 10, 20% margins are possible. You know, agents are selling 12 to 36 homes per year. It's really hard to scale this type of business. I know because I had this business and it was hard to scale beyond, you know, 300 or so homes. Low client experience was marketing based where agents were an ace of sum. So they had a little more of a specialization, but not quite to what I think has to happen for you to be relevant. If you're running a Team and we call this a high performance real estate team where it's really for the few. We call it the few, the proud. Right, like the Marines. I think that's the Marines where it's high standards, high tracking, high accountability. The business is built on training and support and that's a value add to the team. It's high culture, high structure, high cadence, where we're only looking for the right people, which is culture, core values and putting them in the right seats where they really get that position at a high level. They want to do it and they have the capacity to do it. It's a team of professionals where high margins are the goal. Where your agents are selling 60 to 120 plus homes per year depending on their tenure with the team team, you could scale this. It's a world class, emotional, high level client experience where it's prospecting based marketing enhanced. There's this culture and cadence of productivity. It's a team of specialists and professionals will ultimately everyone on the team, including you as the team owner, team leader, can have a life by design and not default. So hopefully that is helpful for you to get a little bit of an idea about what is possible as you build or make the decision to build your team or rebuild your team. And like I said to start out this, our time together today, if you're not making the decisions right, if you, if you're running a team right now and it's pretty loose and you don't have a lot of tracking and you know you have to be in production because you want to make the kind of money that, that you were used to when, before you started a team, it's likely that you don't have the team set up the right way. Or if you're starting this process of building a team and you know you want to make the right decisions, these are the kinds of things I'm going to force you to think about is really what do you want to own in the end. And every path is hard in business. So being the painter that goes out in his painting truck every day and he's getting jobs in the evening and he's up on a ladder painting during the day and he has one painting assistant, that's hard for that guy to be able to figure out how to systematically generate leads of people that want their home painted, to be able to hire and screen painters to work for him and keep them busy consistently and to do all that in a way that's systematic and sustainable and you know, to be able to leverage and build and grow that to one truck, now two trucks, now three trucks, now four trucks where he can hire a superintendent to manage those four crews every day. And a sales guy who's now going out and getting jobs in a consistent basis. And they're advertising, tracking their marketing and they know their returns and they're running financials. And that's what I'm talking about, right? It's. This is applicable to every industry where it's hard to paint, to be on a ladder, you know, or outside in the, in the hot sun, painting the side of a building for the next 20 years. It's also hard to figure out how to build a real business, a real painting business or a real real estate business. So anyway, a little bit of ramble or rant there, but I really want this to sink in. The fact that you have to make this decision. There is not a good time to make the decision to build a business worth owning. One that gives you time, money, freedom versus, you know, just slinging homes, working with buyers and sellers and hoping that your, your friends send people your way and not doing any of it systematically. So either way, I have a lot of love and respect for you. I appreciate you listening here. If you ever want to take a deeper step or next step with us, jump on the phone with me or one of my business coaches. We do these free business growth strategy sessions. There's no obligation whatsoever. They're totally free. People ask us, you know, why we offer these strategy sessions and we do it, first of all, because it's a service. We know the industry is broken and we know that we have a different way of looking at the industry. And our tools and systems help support agents and team leaders to build this thing out the right way. That's number one. Number two is that a percentage of the folks that get on the phone with us will make a decision to take a next level step, a next step with us. And so it's for both of you, if you're really serious about building a real, real estate business, jump on the phone and we'll talk to you there. Until next time. Again, much love and respect. We'll talk to you later. Bye bye.