The days of the single-office, generalist, residential brokerage may soon be over.\u00a0 Those who survive this down market will most likely have done so because they will have made the choice between getting bigger or becoming a specialist firm, a boutique.<\/p>\n
This is a common theme within any industry facing the kinds of historic challenges that we are.\u00a0 It\u2019s the choice between growth or specialization.\u00a0 If there is little differentiation between your firm and the many others in your marketplace, there is little reason for consumers or agents to choose you over another.\u00a0 Now more than ever you need to either establish a dominant market position or find your niche and own it.<\/p>\n
Get Big<\/strong><\/p>\n Growing under these difficult conditions is not about expanding wildly into new territories.\u00a0 In most cases, it\u2019s about strengthening your position by acquiring or merging with other firms without adding unnecessary costs.\u00a0 It\u2019s about gaining profitable market share to both survive the day and position oneself for accelerated growth when things improve.<\/p>\n I spent a decade in mergers and acquisitions and was centrally involved in the purchase of nearly 350 brokerages.\u00a0 Of these, over 100 were companies with less than $1 million in gross commission income.\u00a0 The overwhelming majority of those acquisitions were what we referred to as \u201croll-ins.\u201d\u00a0 This was when one firm would acquire another and immediately consolidate offices, effectively \u201crolling in\u201d the staff and agents from one entity into the other.\u00a0 When structured and integrated properly, these roll in acquisitions generated extraordinary returns, even in soft markets.\u00a0 This was because the buyer didn\u2019t assume major expenses and the purchase payments were generally a percentage of the acquired agents\u2019 gross profits.<\/p>\n Now is the opportunity for many, many firms, even those that are struggling more than ever before.\u00a0\u00a0 The forward-looking are making bids on companies that will immediately bolster their reputation and profits.\u00a0 Your road to getting big could start with the roll-in of a firm with less than ten agents.<\/p>\n Get Boutique<\/strong><\/p>\n Identifying a specialization differs from market to market.\u00a0 A niche can be staked within price-point, neighborhood, technology, or service, to name a few.\u00a0 What\u2019s important is that you choose a distinction the consumer cares about and that there is enough opportunity in it to make you profitable.\u00a0 You then build your services around it in a way that ensures you have top market position in that niche.\u00a0 Then work your tail off to keep that position.<\/p>\n Consider the barriers to entry before you dedicate yourself to your area of expertise.\u00a0 If you put all your eggs into the technology basket, besides understanding the cost involved in maintaining dominance you need to ask yourself whether someone else can topple you with identical tools.\u00a0 Unless you have come up with something absolutely groundbreaking, technology alone is probably not the answer.<\/p>\n Once you have identified your niche, be sure consumers identify you as that market player.\u00a0 It doesn\u2019t help if you think of yourself as the riverfront condo specialist if nobody else believes it.\u00a0 For every niche, there is an opportunity to get boutique.<\/p>\n The choice is yours.\u00a0 Get big or get boutique.<\/p>\n","protected":false},"excerpt":{"rendered":" The days of the single-office, generalist, residential brokerage may soon be over.\u00a0 Those who survive this down market will most likely have done so because they will have made the choice between getting bigger or becoming a specialist firm, a boutique. This is a common theme within any industry facing the kinds of historic challenges […]<\/p>\n","protected":false},"author":181,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[181],"tags":[1351,5681,5761,17521,26671,33981],"class_list":["post-784","post","type-post","status-publish","format-standard","hentry","category-real-estate","tag-agents","tag-brokerage","tag-brokers","tag-gross-commission-income","tag-mergers-and-acquisitions","tag-real-estate"],"yoast_head":"\n