I don’t think it’s any secret that building a team or building a business is hard. And yet, too often, I see well-meaning entrepreneurs go full-steam ahead and then crash and burn.
Don’t get me wrong — to succeed in business, you need that drive and determination and get-it-done attitude, but you also need clarity, consistency, and deliberateness to play the infinite game.
As a visionary, entrepreneur or business leader, the last thing you want is for someone to tell you want to do. Believe me, I get it! But when we hide from the truth, we are just doing ourselves a disservice.
Ben Horowitz, co-founder of Andreessen Horowitz and the author of The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers wrote, “Hard things are hard because there are no easy answers or recipes. They are hard because your emotions are at odds with your logic. They are hard because you don’t know the answer and you cannot ask for help without showing weakness.”
I hoping to help you out here a little. First, asking for help is not a sign of weakness (sorry Ben!). It may show your lack of knowledge or experience in a particular area, but both of those can be fixed. But only if you ask the questions to get the help you need.
Secondly, there are many people who have built very successful real estate teams and companies. Let them show you the way. More importantly, you must stay as centered and neutral as possible, without letting your emotions interfere with the hard decision you have to make.
It’s true, sometimes, there are no easy answers for you and your current situation, but making those tough calls and looking the truth straight in the eye is what will separate you from your competition. Thinking about building a real estate team? Here are five hard truths you need to face before you get started.
1. At some point, your sales agents will make more money than you
Think about your business like an NBA team. Who makes the most money? The players, right? Those are your sales agents. The coaches and the owners of the team? They may not be taking home quite as much annual income.
In fact, the team owner may even be investing large sums of money or taking a loss for a few years. But they are building something bigger than themselves. They are committed to the long game.
To truly build a real estate business (not just a sales team), you can’t get addicted to the income you make as a real estate agent. It can be great money and a great career choice. But there is a difference between being the CEO or owner of a company and a real estate agent.
One is not better than the other; They are simply different career paths. As a business owner, you will need to decide what annual income works for you and your family (preferably below your means), so that you can start investing the rest into the business, into people and into the failures that you will inevitably make as you grow your company.
You will need to set your ego aside. Yes, some of your agents may earn more than you — possibly for quite some time. But it has to be more than just the money. You must be driven by the desire to build, to create, to lead and to work when and where you want. If you approach it from this perspective and stay the course, you will be rewarded in many ways, financially being one of them.
2. You will not be able to control everything
This can be a hard one to swallow for those strong-willed (or stubborn), independent and laser-focused entrepreneurs. But giving up control is what moves you from entrepreneur to business owner.
You will need to allow other agents to work with your clients. You will need to hire people to oversee you finances, marketing and operations. You will need to delegate decision-making to trusted team members. You will need to say “no” to a lot of meetings and requests and say “yes” to only a few high-impact projects and responsibilities that only you, as the CEO, can do.
It will be nerve-wracking at first. Your team members will make mistakes and make decisions that you wouldn’t necessarily make. This is where your leadership skills are made and your team ultimately thrives.
Course correct. Help them understand your thinking and how you would have handled the situation and keep moving forward. But just don’t take back control! That will be your initial response. It’s better to just do it yourself right? Wrong!
The only way to truly grow and build a company is through other people, and if you aren’t willing to fail forward through their mistakes, you and your company will forever be stuck at a certain level.
3. Learning to lead and succeed through others will be your biggest challenge
Speaking of which, investing into people will likely be your biggest challenge when building a team or company. You’re not just investing money, you’re also investing your time (with the possibility that it may not work out).
You’re also investing your trust that the people you are leading will treat your company with the same care and respect that you do. Our businesses are our babies, and it’s not easy to give that over to someone else.
This is why people are the most important investment you can make in your company and one of the hardest. You lose control. You can’t just turn on your internal drive and get it done. You have to learn how to channel that energy and experience into teaching others how to get the sale, manage a transaction, put together a marketing campaign, negotiate a deal, etc.
Like the old saying goes, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” This goes for your business too. You can either be the one giving out fish all day (which just sounds exhausting), or you can be the person who teaches your team how to fish.
You can be the one who helps them become so good at it that they have a massive reserve, are giving fish out to the local community, and starting to innovate what to do with the fish because they have so many. That’s what truly succeeding through others looks like. It helps them, and it helps you.
However, it requires a commitment to leadership. Studying leadership principles, implementing communication channels and cadences to cast the vision every day, listening and reading books and podcasts about leadership, practicing leadership in every conversation, attending leadership courses, and most importantly, leading yourself first. It is a challenge that never ends.
4. You must slow down to speed up
Do you feel the need for speed? I certainly did for a good part of my career. Nothing was ever done fast enough, and I wanted to continue to accomplish more and more within shorter amounts of time.
Now, I think a healthy sense of urgency is a good thing; it does keep projects and companies moving forward. However, to actually build a company, you need to slow down and build a solid foundation — a foundation of systems, models and processes.
Furthermore, you, as the leader need to slow down and master how to attract, recruit and hire talented people to your organization. You can actually go a bit faster if you have the right team members in place. But that’s because they will be the ones slowing down to build the foundation instead of you.
It can be frustrating to have to stop and fix systems or create them from scratch. Yet, it is once again what separates those companies that are able to grow and scale and stand the test of time versus the ones that run hot and burn out.
Often, in real estate, I see that a team or business is built around the lead agent/CEO. For example, a transaction coordinator who knows just how the lead agent likes to manage their clients or a couple of showing assistants who are there simply to serve the lead agent. These are great leverage points, but this is not a company. If you remove that lead agent, there is no business.
As you embark on building a real estate team/business, think about what it would look like if you were not doing any production. Build your systems and models around that. Harder? Yup. Does it take longer? Probably. But then it allows you to work on the business (big picture strategy, recruiting and business partnerships) and insert yourself in the business when and where you want.
5. It will take you 5-7 years to build a sustainable and successful business
Patience, young grasshopper. One of the hardest truths about building a team or business is that it takes years! Years of trial and error, starts and stops, building and creating and iterating, hiring and firing, whirlwind days and long sleepless nights.
Building a company is not for everyone. In 2019, the startup failure rate was 90 percent, and 21.5 percent of startups fail in the first year, with 30 percent failing in the second year. Those are some hard truths.
According to Investopedia, if you don’t want to be a part of that 20 percent, you need to set clear goals, know your market and consumers, love your work, and don’t quit. I think that last point is so key. Building a real estate team and business is hard. Period. It will take at least five years to really start seeing the fruits of your labor and feeling the freedom you were likely after in the first place.
Sounds fun, right? It is! When you embrace the struggle and find the joy in the hard, not only will you outlast your competition, you will achieve the freedom and fulfillment you are after. Face the hard truths that are in front of you. Let go of the outcome. And fight forward — always.
Adam Hergenrother is the founder and CEO of Adam Hergenrother Companies, the author of The Founder & The Force Multiplier, and the host of the podcast, Business Meets Spirituality. Learn more about Adam’s holistic approach to business here.