Understanding the Business Mindset Needed in Real Estate

How do you make the shift from real estate agent to business owner? And what's the difference? You know, my journey was not the easiest one in the early days being a real estate agent. You know, I was married in October 2006 and made these big promises to my wife Julie about just creating this life that we never could imagine and just being present with her and just loving her. And, you know, we had our first child in November of 2007. That was six months after I got into real estate. The market tanked. The end of 2008, if y' all were in real estate, you remember that was the Great Recession. That was a three or four year, you know, climb out of that. Well, it descended for a couple years and then it was a two, three year climb out of that awful time in our market. And in those years where I was like top, top real estate agent, I just realized that what I was doing was, was not even remotely sustainable. So if you're at the point in your journey where you're wondering how you could do more in less time, achieve growth, yet don't give up your life, you're in the right place. Stay tuned for the video I'm going to share with you today or the content, tips, tricks, tools, strategies I'm going to share with you today. Stick around to the end of the video. I'm going to give you the entire progression, the six stages of business growth. If you liked the video, please give me the thumbs up. You subscribe to the channel and turn on notifications. All right, so let's dig into, you know, this topic of, you know, being a real estate agent versus being a business owner. I want to start the conversation with what do I mean by being a business owner? There are many solo real estate agents that actually think they own a business. And I guess in theory, you know, you may have an S corp or you're incorporated with the state and you have a business. Technically you're a small business owner. The way you operate in that business really dictates if you have a business or if you don't have a business. If you're the only one in the business and the business doesn't run without you showing up every day. You don't have a business, you have a job. And some of you have a really well paid job, it's just a job. In E Myth Revisited by Michael Gerber, he talks about, you know, the entrepreneurial myth, right? The entrepreneurial myth is that just because you work for yourself doesn't mean you own a business. You're doing the technical work in the business you're not spending any time at as a manager. And managers build systems and hire people to run the systems. And then you're not spending much time as the entrepreneur. The entrepreneur casts vision and creates the business of the future. Future co as I like to call it. So as you think about where you are in terms of your mindset around building a business or becoming a business owner, there's a few things I want to share with you that can help you maybe shift the way you think about where you are right now and what's possible for your future. The first tip I'll give you is to imagine your business without you in it. I don't know if you've seen the movie the Founder with Michael Keaton. It's the story of Ray Kroc and McDonald's and Ray Kroc. In the movie. Michael Keaton was not really positioned as like this loving guy. The lesson in it for me though was there was this scene. So essentially Ray Kroc was selling milkshake machines and he called on the McDonald brothers. They had a small hamburger stand. The two of them worked in it with maybe a couple waitresses. This is back in the 50s, I think. And Ray Kroc just loved the hamburger and saw this opportunity to take this product and figure out a way to roll it out to the world, essentially. And how could you take a small little hamburger stand where the two founders are working and flipping burgers in the hamburger stands? They're doing the technical work. And how can Ray Kroc never flip a burger but have 10,000, 20,000, 50,000 locations for McDonald's and I don't even know how many locations there are right now. There's a scene in the movie that you have to go watch if you go to YouTube and parking lot scene, the founder, it's like a five minute video where you see Michael Keaton with his staff in a parking lot and they lay out this prototype. It's this, it's the franchise prototype. And what I mean by franchise prototype is they're designing in a parking lot in their first location what the business would need to look like so that it can be replicated 10,000, 20, 30,000 times? In our real estate business, do we even think about the possibility to do that as we're showing homes to buyers? Are we thinking, hey, how can I build a system to show homes for buyers where I'm not the one doing it? Going on a listing appointment, hey, how can I build a system that does Listing appointments where I don't have to do listing appointments. You know, we have a virtual buyer consultation process and a virtual listing consultation process. I could be on a buyer consultation and a listing consultation at the same time. Actually five buyer consultations and five listing consultations at the same time. Because I had this mindset to build a business as if it were to run without me. So that's the first thing you need to get straight is this mindset of franchise prototype. Build the business to run without you. The next tip I want to share with you in terms of the mindset required to become a business owner is just creating a week. The ideal week, we call it, where you can actually live into what you want your life to look like in terms of your schedule, being a top agent or even a team leader and you built a business that's not sustainable, meaning it can't run without you. Your week is never ideal, right? If you're a team leader and you're managing your agents and you're trying to build some systems and you're still in production and you're working evenings and weekends and agents are calling you on the and like it's just this crap show, right? Every quarter you need to just slow down a little bit and write out like just write out seven days in half hour increments what you want your life to look like as it relates to your calendar. Like literally, this is when I'm going to start work, this is when I'm going to stop work. This is when we have family nights, this is when I have date nights, this is when I go to church, this is when I new business development or I recruit. These are my time blocks for working on the business. Create your ideal week that's going to lead you closer to making that shift from agent or team leader. A lot of us call ourselves team leader, but we're still selling homes, so we're still technically a real estate agent. To make that shift from agent to owner, it comes step by step, quarter by quarter. Every quarter you get a shot at moving closer to living out your ideal week. And it's not a complicated process. Don't overthink it. You know, we have in our business planning system, the Business Freedom Planner, every quarter built into that planning system, we go through and create this ideal week. The next thing we do, and this is my last tip, is to think about the things you're passionate about versus the pay you're able to make from those things. So we have a process in real estate B school where we ask not Everyone takes us up on it. We ask everyone to do a 14 day time study every 90 days. The time study helps feed into this exercise of passion versus pay. So the reality is, as a real estate agent, whether you like it or not, there are 12 different jobs that you're doing. If you're a solo agent, you are doing all of these 12 different jobs. And the pay scale for running a yard sign out or picking up a check at the attorneys, or showing a home, or doing a walk through, or entering a listing into MLS or designing a brochure or taking pictures, the pay for those things are different than the pay for sitting in on a listing consultation, meeting with a buyer for the first time and convincing them to do business with you. You know, negotiating a transaction, new business development, you know, setting appointments with new buyers and new sellers in terms of their first interaction with you. If you're not spending a lot of time in, you know, those second set of things, there's only two or three jobs that a real estate agent does that pays really, really well. One other thing too is building systems in the business. There are very few team leaders and agents I know that have time blocks in their calendar work on business, which means you're building systems. That is the highest paid activity that you can do in your business and very few people do it. So if you look at passion versus pay, there are times where you have to do high pay activities that are low passion. Every quarter you can use this 14 day time study and look at where you're spending your time and then just categorize the activities into okay, these are high passion, high pay. I love doing these things and they pay me really well. These are, you know, high pay, low passion. Maybe you still have to do those things like build systems or recruit or you know, new business develop, right? Calling prospects, seller buyer prospects every morning. Then there are high passion, low pay things like showing homes. I hate to tell you, but showing homes could be like the thing you love the most. It just doesn't pay very well. In a big market like we're in, you know, we pay about 25 to $30 an hour for our showing agent. That's the truth. Like if you want to make 25 to $30 an hour, which in even 60 hour work weeks, that's 3,000 hours a year, times 25 is $75,000. If you want to make $75,000 as a real estate agent, show homes all you want, right? If you want to make 250 to $500,000 of take home, you need to trade out those activities for $100, $200 an hour activities. And this passion versus pay, just laying everything out that way really helps you envision what's possible in your business in terms of just shifting your mindset around, you know, this agent to owner transition. I had the pleasure to work with Dan Jones and his journey from real estate agent to business owner. And, and literally he was an agent on my team. He got licensed to join me in growing my business. He came on as an inside sales agent and then shifted to an outside sales agent. Spent about three years on my team. I knew he had this entrepreneurial bug and spirit inside of him. He ended up going on his own. This is before or maybe just around the time I was launching real estate B school, when I had sort of worked out the kinks in my growth journey and Dan went on his own. He had a part time assistant. He understood that piece of leverage because we spoiled him and our real estate team. We had, you know, all the systems built out. He got to see the operation from the inside, right? And so we had a part time assistant. He actually did really well. He was 60 to 65 sides for his first two years with just him and an administrator. And when I started real estate B school, I said, dan, let me help you. I love you, I respect you. I know we can do this a little bit with more elegance and ease versus your blood and guts approach. Truth is, he was spending seven days a week in the business and it was that traditional success where instantly he came on the scene. Top producer. If you asked him though, he was losing his life and he was, you know, making promises to his wife Nadia that he couldn't keep up. They wanted to have a child, but it just wasn't the right time because he was so busy. And so we started working together. And the only thing I told him to do the first year we worked together is that you need to cut out three of your four paid lead sources. You know, many times agents think they have to just spend money to make money. We cut out three of those four paid lead sources. He went from 64 transactions, I think, to 105 transactions in a single year. And he brought his brother Mike onto the team as his first agent. So one administrator, one agent, 104 sides. The only thing we did differently that next year, and I think he went from 104 to 165, is that we added back one of those lead sources that we cut. So he had database and yard marketing. Those are not paid. And then he had, I think it was realtor.com he was crushing and then he had one other paid lead source and then we didn't do anything the next year to go from 160 something sides to 225 sides. We just went deeper on those two paid lead sources. So again, when I talk about building oil wells in your business and going into a lead source that can take you 50 transactions deep, this is it. There's four lead sources at this point and we're over 200 transactions. And so when you think about where you are in your business journey, so the long story short on Dan Jones is that he was able to get out of production. He took two months off when his daughter Charlotte was born. He's been out of production for two years or so and he's actually one of our business coaches now. If you ever have the opportunity to coach with Dan Jones, he will hold your feet to the fire and make you make the shift from agent to owner. If you're at the point in your business where, man, I just wish there was this roadmap, this blueprint, you know, I actually wrote such a document. It's called our Real Estate Business Growth Navigator. Just go to realestatebusinessgrowth.com or click on the link below. If you like the videos, please give me the thumbs up. Subscribe to the channel and turn the notifications on so you're first to know about new videos when they hit. And here's my final word of advice. You have a choice. At this point. No matter where you are in your journey, the spectrum of agent to owner, you have a choice. Do you think that the path you're on now is going to lead you to a really fulfilled life where you're going to accomplish all of the goals that matter to you? Or is it worth kind of getting on this path of building out systems and becoming more of a business owner and learning new things and pushing yourself out, out of your comfort zone. And that's a question that you are the only one that can answer. And so we'll see you on the next video.