(This is Part 3 of a six-part series. See Part 1: Are your ready to sell your real estate practice? Part 2: Finding best successor for your real estate biz; Part 4: 7 ways to beef up your real estate business; Part 5: Putting a price tag on your real estate business and Part 6: Navigating the sale of your real estate business.)
If you want to maximize the worth of your business, how you brand, niche and document your business is critical.
Last week’s column looked at the different roles you must address when you sell your business. This week’s issue outlines three additional steps to take to maximize the worth of your business.
Step #2: Brand Your Business with a Saleable Brand
How have you branded your business? If you are like most agents, you have probably branded your business using your name. Agents seldom obtain the maximum price for their businesses because they haven’t capitalized on the appropriate branding strategies. A great brand is memorable, references real estate, and targets a specific market. In other words, it references what you do, who you do it with, and where you do it. Some examples of correct branding include, “SantaFeHorseProperties.com,” “RollingWoodCondos.com,” or “Homes4LATeachers.com.” Each of these examples references real estate, references a specific niche, and a geographical location. If you have branded your business using your name, add to your existing branding by creating new brands that incorporate these principles. Reserve the URL (Web site address) for each of your new brands. You do not need several new Web sites. Instead, have each URL link directly to a page on your existing Web site. These pages should have the look and feel of a home page, even though they are embedded in your Web site.
Step #3 Get Rich in a Niche
Owning a niche is one of the best ways to have a marketable practice. Most top producers have specific niches they service. A great way to build the worth of your business is to create multiple niches, brand each niche separately, and then market them using the different URLs. Web marketing can be quite expensive. In contrast, marketing to a narrow niche is one of the least expensive ways to market. Instead of marketing using the name of the city where you live, market using the name of a subdivision or condominium complex. Targeted marketing costs pennies and effectively builds the worth of your business. Current hot niches include Baby Boomers who own 40 percent of all listings. Another upcoming niche is immigrants and minorities. Census numbers suggest that by 2010, this niche will represent 65 percent of all buyers and sellers. If you are not fluent in at least one other language, now is a great time to begin. A third hot niche is investments. Twenty-seven percent of current sales are to investors. Another 14 percent of sales are to clients purchasing second homes. If there is a major market downturn in your area, foreclosures may be another hot niche over the next few years.
Step #4: Document Your Existing Book of Business
You can only sell what you can document. Most agents are so busy that they have little time for this critical task. Hire a virtual assistant to handle this onerous chore. Alternatively, use database software to track past clients, current leads, as well as members of your referral database. Enter each person’s contact information, including their name, address, city, phone numbers and e-mail. You should also track the types and numbers of transactions each client has closed, including the dates and sales prices. In addition, remember to track the number of referrals each individual has made to your business, including the frequency, the price range of the referrals, the dates that the referral was made, as well as the referral’s contact information.
A second important aspect of documenting your book of business is to track how many times you have communicated with each individual. A seller who did business with you five years ago has value provided you have been in regular contact. In contrast, the seller’s name has little value if you haven’t been in contact since the transaction closed.
In addition to documenting how often you have contacted the individual, it’s also wise to document the type of contact you made. How often did you make face-to-face contact? How often did you e-mail, mail, or make contact by telephone? It’s important for your purchaser to have these numbers so they can continue to deliver service at the same level. Furthermore, a strong, documented referral database and client list greatly enhances the net worth of your business.
Do you need more strategies to beef up the value of your business? If so, look for next week’s column.
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