Being ‘corporate’. What does it actually mean?
When independent agents talk about ‘corporate’ agent behaviour, it’s usually in the negative.
Its literal definition is simply ‘Relating to a large company or group’ – no positive or negative connotations there.
But when independents describe themselves, it’s to highlight the differences between the way corporate agents act (negatively), and the way they service their clients (positive).
Here’s what our AJ Mastermind group members say being ‘corporate’ means to them
Here’s a sample of some responses from our AJ Mastermind Facebook group: (click here to request to join for tips, tricks and tools to grow your agency).
“Targets. Lack of individuality and ingenuity” – Paul Reynolds, Renown
“Systems and processes. Spreadsheets. Company interests, not the customer.” – David Warburton, Burton James
“Non agile. Crap client experience. Work hard not smart. Faceless and uniform. Generally weak marketing in bulk.” – James Kendall, James Kendall Estate Agents
“Focus all on bottom line and return to shareholders, no flexibility to do things differently to attract or retain customers and staff.” – Claire Roberts, Rutley Clark,
“It’s a numbers game. Staff are numbers. Clients are numbers. Instructions numbers. Sales numbers. Little customer service. Sell your mum’s soul if you need to meet targets. Heavily into selling ancillary products.” – Kevin Parson, Parson Estate Agents
“No authenticity, honesty in their culture and over trained and whipped staff!” – Joe Rylett, EXP
(That last one is a bit harsh Joe!)
We’re all rightly proud of our independent status. It carries lots of lovely positive associations, like family-first, personal, nimble and agile, going above and beyond for the client, and generally being much more warm and fuzzy than a faceless corporate agency.
But some of how ‘corporate’ agents operate is actually good business practice. After all, they’re large by process, not by accident. And process is what many independents lust after, but don’t create, embrace or implement.
Because when you’re small – say, under 10 employees – you can roll on quite nicely without too much structure. In fact, you could take your agency to a £500k revenue and still remain the bottleneck without too many adverse consequences.
But beyond there, things start to break.
In this article, I’m going to share with you the top 5 things you can steal from the corporates, to make your agency more efficient, effective and more profitable. And, most importantly (I think), more enjoyable.
5 Things to Steal from the Corporates
#1 – Systems and processes
Like it or not, if you don’t have a documented system for your business, it’s painful to go on holiday, and almost impossible to sell your business down the line. Systemising your business doesn’t mean it has to be soulless and automated to within an inch, you can still retain your brand’s personality and values. For example, your emails for confirmation of viewings and valuations are probably already templates that you can add some personal information to, so they sound more individual. That’s taking a process you can replicate 80% and add in 20% personality.
Not being systemised means you’re spending time and effort in places that you don’t need to. If your diary is 100% different this week from last week, and the week before, then you’re not systemising your time effectively. Phil and I have a ‘Priorities Meeting’ every Monday morning at 10am so we can discuss the top priorities for the week and make sure our quarterly planning is on track. It’s in our diaries in perpetuity. By having this meeting, we know we can make decisions about how we use our time to make sure we stick to the really important tasks and projects – the ones that will make the boat go faster.
- Do a time audit – list everything you do over 3 days, and colour code your tasks according to Maintenance, Delivery or Growth. (See this article). Focus on increasing the amount of time you spend on Growth as it’s the most valuable of the three, and probably something you will do better than anyone else in your business.
- Get your team to do the same and create a master list of every single task in your company.
- Start creating task sheets, or SOPs (standard operating procedures). Get the team member responsible for the task to write it, then check it with someone who’s never done it before.
#2 – Justifiable salaries and promotional process
Do you have a written compensation strategy? The lack of a documented compensation strategy can create friction in your team, and can result in perceived (or real) favouritism. By contrast, if you create, document and share with your team a clear formula, plan or strategy for how you pay them, you’ll build trust and loyalty, reduce friction and jealousy, and avoid toxic salary gossip.
In conjunction with a written compensation strategy, a salary matrix is a crucial tool for wage transparency and to help avoid those ugly salary conversations. A salary matrix is basically a chart that can be used to determine the annual salary award and rate of salary progression of an individual employee. You won’t always be able to make the salary decisions as your business grows so you must have a system to allow future managers to make decisions with a clear structure to guide them.
Corporates often have ‘succession planning’. This is a way of future-proofing their business by identifying talent who could replace current team members. Succession planning also can act as a motivator for your ambitious team members, allowing them to see their path for progression with clarity, and how they can work towards it.
1. Create a written compensation strategy. Include your position on commission, paid holidays and sickness, salary increases and anything else that would be useful to a candidate or new recruit.
2. Design your salary matrix in bands that reflect the competence of the team member, and their seniority. Keep it simple – ours has five levels of seniority and three levels of competence.
3. Add ‘succession plan’ to your team member reviews. Who could take over their position if they were promoted (or left), and how far away is that person from being capable of doing the job?
To see our Compensation Strategy, Salary Matrix and Succession Plan, go to https://www.ajmastermind.co.uk/stealfromcorporates to download them.
#3 – Planned marketing activities
We were very guilty of unplanned marketing in our first 2-3 years. Marketing was something we just did week to week, not looking any further than the next post on Facebook and the next letter send-out.
You need to think in terms of campaigns. Knowing what marketing you’re going to be doing, by when, who’s going to do it and how.
Independent agents like us tend to do is look at their diaries, realise they’re short on valuations, and panic, resorting to what they regard as easy and proven tactics, like leaflets.
In contrast, what corporates do well is having a planned calendar of marketing, so they know what’s going out and when, up to a year or longer in advance. This means they always have a steady stream of valuations, and don’t have to find themselves having to react to a dry spell with a knee-jerk response.
When you’re really busy with take-ons and new listings, you stop doing those things that get you the valuations – letters, follow-up calls, putting out consistent content. When you finally come up for air and realise you have no valuations booked in your diary, you tell “I’ll never do that again!”
And then you get busy again…
It’s vital to have a marketing system in place to make sure your campaigns happen on autopilot, no matter how busy you are. For example, we send out our ‘on the market’ letters at the beginning of each month, and our ‘not on market’s every quarter, regardless of how many valuations we may have in our diaries.
With vals coming in on a regular and predictable basis, you can create imaginative seasonal campaigns and big promotional projects. For example, we’re writing a book on how to move home and planning some local events.
1. Create a schedule for your ‘on the market’ and ‘not on market’ letters that works without you doing anything
2. Diarise planning meetings for your marketing campaigns; make sure everyone has the resources they need and deadlines to work to.
3. Use a printed calendar from timeanddate.com – print out the next three months and add colour-coded post-it notes to indicate who is responsible for what, by when.
#4 – Tight financial control
If there’s one mistake I could go back and fix, it would be that we relinquished financial control. We delegated this business-crucial area of our company to financial admins, bookkeepers and a series of accountants, when we should have done it ourselves.
Don’t get me wrong, you need someone to input data into a bookkeeping system, and you need a great accountant to keep you compliant and save you tax. But the day-to-day cash flow, the monthly profitability and the big-picture, long-term planning – these are all your responsibilities as the business owner. No one cares more about your money than you do. (And if you don’t care, you have an even bigger problem.)
So I’ve appointed myself Financial Controller, and in just a few months, I’ve already saved us thousands of pounds. (I try not to ask myself how much money we’ve thrown away over the past 6 years because it makes me want to kick myself.)
However, we’re not there yet. I’m just getting to grips with our financial controls and their corresponding costs, to make the whole process more streamlined and cost effective. In particular, I’m creating a dashboard where I can monitor the financial health of the company in just one easy-to-read format.
Until recently, our financial targets have been very much a guess, based on the previous year and a following wind. Now we use a tool we created called the Agency Revenue Generator, which helps us see the effect in monetary terms of the marketing we do, so we can see exactly how to increase the input to improve the bottom line.
Corporates have to answer for their financial results to shareholders and/or investors, so they plan meticulously, checking actual figures against the plan on a daily basis. You can bet Connells know exactly where they are right now against their plan, and Foxtons will be certain of what they can achieve by year end. In short, they won’t have any nasty surprises, barring another pandemic or tricky budget.
Get a grip of your financial reports – what do you need to know, when do you need it and who will get that information for you? Here are your top three reports to track:
1. Cash flow
2. Monthly P&L
3. Departmental reporting eg maintenance, delivery and growth
#5 – Accountability
Multi-million pound companies are responsible and accountable to their shareholders, investors and bankers. Their actions always have to be explained and justified.
When you are your own boss, how do you harness that sense of being accountable to your projections and forecasts? How do you inject that level of accountability for yourself?
All corporates have very clear KPIs (key performance indicators) and detailed plans of how they will hit them. If they fail, there are consequences. As boss of yourself, the consequence of not hitting your numbers might be only obvious way too late, for example, running out of money and not being able to make payroll.
Define your financial target for the year – revenue is simplest – and put it on the wall somewhere where everyone can see it. This will keep it visible and make sure you and your team keep focused on it.
Determine the KPIs or metrics that will ensure you hit this target. For us, it’s:
- Letters sent
- Listed fees
Each of these KPIs is ‘owned’ by someone in our team who is not just responsible for the relevant tasks, but accountable for the outcome. We find that most independent agency owners take accountability for their team’s actions, and whilst this ok on a ‘the buck stops with me’ level, it’s vital that each team member is accountable for the results of their role, eg sending the letters.
WHAT CAN YOU STEAL FROM THE CORPORATES?
And that’s how you take from the corporates the best practices, plus the systems and structure you need for your growth, and implement them in your lovely friendly-family company.
Remember that running a streamlined, efficient business is more profitable and ultimately more enjoyable, than running an ‘anything goes’, ‘move-fast-and-break-things’ one. And if. You systemise yourself out of your own business, you’ll at least be able to go on holiday without a disaster happening, and at best, create a saleable business that will keep you and your family financially secure in your Zimmer frame years.
NOT SURE WHERE TO START?
Structuring can be a scary proposition for a free-thinking entrepreneur, as most estate agents are! All you want is a diary full of valuations on the best homes in your area, right? Structure is the bridge between where you are now and where you want to be.
Wouldn’t it be great if you could see inside another independent agency, how their systems and processes are built, and how their team support and enable their ambitious growth plans?
Well you can! By spending the day with me and Phil, in our beautiful Lake District.
Come and spend the day with us at AshdownJones, how we’ve built the agency of our dreams, and how we’re planning for world domination (well, strategic and stratospheric growth) across the north of England.
A jam-packed day of the best information, a detailed look at our systems and processes, and live Q&As with all of our amazing team. PLUS you even get a delicious lunch!
And best of all… it’s FREE!!
Just go to https://www.ajmastermind.co.uk/btsday and book on straight away – we don’t allow any competing agents in the room so get first dibs on your seat at the next ‘Behind the Scenes at AshdownJones’ event, right now!!
Click here >> https://www.ajmastermind.co.uk/btsday
Sam and Phil