Passionate about helping people develop and grow? Considering starting your own business? Setting up a real estate franchise could be your key to making it happen.
From marketing support to the backing of a well-known brand, franchising holds a number of key advantages over starting your own agency from scratch. However, in order to find out if it’s right for you, there are a number of questions you need to ask yourself.
In this article, we’ll give you the information you need to make an educated decision about opening a real estate franchise, as well as walk you through the key steps you need to take to get started. Read on to find out more.
Is a franchise agreement right for you?
Franchises come with a number of distinct advantages over starting up your own real estate business, but it’s important to weigh up both sides before making a decision. Here’s a snapshot view of the key points you need to consider:
Franchising comes with a proven model
Starting your own agency from scratch? Whilst it’s an exciting process, it can also be daunting, inefficient and you could end up burning valuable time on trial and error before you hit the sweet spot with your sales and marketing strategy.
When you buy into a real estate franchise, you get more than just the name. You also gain full access to a model that’s proven to be successful. This will cut down the number of difficult business and marketing decisions, allowing you to hit the ground running. You can also tap into the knowledge of current industry leaders within the group.
Time-consuming decisions have already been made
Unsure of software applications? Still thinking about fee structure? If you start your own real estate business, it could take weeks — or even months — to get clear answers to these questions.
If you opt for a real estate franchise, everything from technology to day-to-day business processes is already set up for you, leaving you to focus on doing what you do best.
It’s easier to control your risk exposure
Running your own business can be stressful at times, especially if you don’t have a clear plan and process in place. Starting any new business requires a level of investment and financial contingency planning and that goes for starting a franchise and an independent real estate business.
One way to look at it is that risk can be lower with franchise agreements. Whilst the start-up costs can seem higher sometimes (although not always so, do your research) with franchises there is generally a package price that gives you many of the things you need to get going and make a name for yourself in your local real estate market.
6 clear steps to opening your own Real estate franchise?
Decided a Real Estate franchise is the right option for you? Follow these steps to move the process forward:
1. Work out your investment – what’s your budget?
First things first — figure out how much capital you can afford to invest into a real estate business. Franchise opportunities come with varying entry fees, so ensuring you have funds to cover this is your first objective.
When calculating your available investment capital, you can include your personal available wealth, as well as any loan principles you may be able to access.
2. Pick your perfect niche – what market presents the most opportunity for you.
Next, it’s time to hone in on the niche that’s right for you.
From the type of team you want to build, the type of professionals you want to recruit, your target market and your location.
3. Check any geographical restrictions – can you open within your target area?
To avoid oversaturation, some real estate companies will restrict the number of franchised offices to a certain area or limit where those offices are allowed to conduct business. So, before you set your sights on a certain neighbourhood, check if opening an office in that area, with that brand, will work for your plans for your business.
However, whilst real estate businesses don’t want to compete with themselves, they might not have an issue competing with each other. So if you’re committed to targeting a location, it’s worth reaching out to multiple companies.
4. Work out the services you’ll need – where could you use some extra support?
From in-depth training to leading software and marketing services, real estate companies offer a number of core services to help their franchisees find their footing and succeed in their market.
So, based on your experience and current equipment, work out the services you need and discuss them with your chosen franchiser.
You don’t need to make all the hard decisions yourself, you have a resource available to help guide you through the multitude of difficult decisions involved with opening and running a real estate business.
5. Do your research – which company aligns most with your vision for your business?
Explore which real estate offices in your area are for sale. If you’re looking to open up a new office with a franchise, ask questions not just about what they can give you when you set up but what they will continue offering and try to get a sense of the overall culture in their network.
Always come back to your values and priorities and remember that it’s a long-term relationship that you’ll be committing to therefore, the alignment should be as deep as possible.
6. Review your documents with trusted parties.
As when making any big business decisions, find parties that you can trust for advice i.e. friends with business experience, accountants or lawyers.
This might require a little extra investment on your end, but it’s a step worth taking.
By doing this, you’ll feel confident with the decision you’ve made.