Some commercial real estate brokers like the idea of owning their own company and some do hang their own shingle. They soon find the combination of the required time, costs and risks create less income and value than remaining a productive broker at an existing firm. Why does this continually happen and is there an alternative for brokers to benefit from company ownership without the detriments?
Economies of scale come into play. It can be difficult to compete as a small shop, as the expense of the tools and resources needed to be competitive can be difficult to budget with less than fifteen to twenty productive brokers. There are many other aspects that create issues for the broker turned business owner including the fact that productive sales people do not typically enjoy or make good managers.
The perfect situation for a broker would be the benefits of ownership, but without any of the detriments. It would be nice to have an ownership title, like Partner, plus a share of company profits each year. Another plus would be additional profits should the company be sold one day. Can a broker in a commission based industry achieve this without the requisite risks, costs and hassle of running a firm?
Bull Realty founder Michael Bull, who is also the host of the nationally syndicated Commercial Real Estate Show, shares how his company provides ownership benefits with top producing brokers. The plan which is unique for a commission-based industry, includes annual profit sharing from operations, plus profits should the company be sold one day. Partners also are a big part of the succession plan as well.
Michael’s favorite hobby is performance boating, in which he drives boats at speeds of up to 160 miles per hour. “I have enjoyed driving fast boats for 20 years,” he says. “I don’t think I’ll ever crash; however, there is comfort in knowing we have Partners to keep Bull Realty moving forward.
Brokers with Partner status also get a seat at the table to influence company decisions; however there are no requirements to do so. There is also no cash outlay, no management duties, no leases to guarantee and none of the other common risks of ownership.
Brokers who become Partners at the firm also find the title “Partner” is beneficial. Clients are impressed when a broker is a Partner in a company the size of Bull Realty.
It’s important for a broker to be at a firm where he or she can grow their own practice. Plus, if the existing and future brokers are successful, the value of the profit sharing increases every year. Bull Realty does not have the top heavy national company management overhead and restrictions. So, the firm is efficient with attractive splits for brokers while providing incredible tools and resources.
Brokers are supplied a marketing team, prospecting assistance, research department, analysts, database assistance and experienced broker support. The firm provides proven Internet and e-marketing systems, ongoing training, social media, video marketing and possible guest appearances on the firm's national radio show.
Brokers are even supplied with their own laptops, a private office and professional print and e-newsletters in their personal or team name. These are designed specifically for their specialty to grow the brokers business.
Brokers also have extensive databases like RC Analytics, Pierce Islen, Trepp, Metro Study, Databank, Business Wise, REA9, and the full suite of Co-Star products for the entire nation.
Works for Brokers
The company has grown in this cycle in part from its successful marketing platform. “We did not have to attempt to turn a large ship to adjust to a market that requires more progressive marketing,” says Rob Whitmire, an MBA and a Partner who leads the firm’s Special Assets Division. “Our speed boat was designed to perform well in any market. In cycles where clients require better results, they look closer at the actual marketing process and that benefits our brokers.”
“When you have the right tools to provide incredible service for your clients, have access to a progressive platform to continue to grow your practice and at the same time can share in the benefits of company ownership, it’s really the perfect world,” says Partner Paul Zeman, who leads Healthcare Real Estate Services at Bull Realty.
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