How To Profit In Real Estate Business Ownership: Recent Episodes
Paul Davies
Essential reading for existing and aspiring real estate business owners. Written by our Founder and CEO Paul Davies with a foreword by leading real estate coach and trainer Tom Panos, ‘How To Profit In Real Estate Business Ownership’ is compulsive reading for established and aspiring agents looking for a way to achieve success and maximise fee retention.
About the Author
Paul Davies has worked in the real estate industry for nearly 50 years. As a selling agent he’s made in excess of 1,000 property sales and has conducted more than 300 auctions. He began his career in property management, and progressed to sales and office management. The next and most obvious step was to build a real estate business.
Paul has since owned two national franchises and also created two independent boutique businesses. The franchise business running costs went through the roof and, although the business made a great income, it lost profits to ridiculously high overheads. The boutique businesses were far more economical to run, but they just couldn’t compete against the major franchises, being like an island lost in an ocean of businesses.
There had to be a better solution for agents to grow sustainable and profitable real estate businesses. He has had plenty of success and Paul admits that he has also made some obvious mistakes. However the single most important thing that he has learned is that,
It’s not what you make that counts, it’s what you keep – after all the expenses are paid, no matter how much you earn.
That premise, along with his vast industry experience and his wife Annie’s encouragement, was the motivator behind One Agency. Paul knew there was better way and launched a revolutionary and unique business model. Real estate agents and business owners now have the freedom to set up a their own individualised business under the One Agency brand, join a rapidly expanding and respected international network, leaving behind the days of paying franchise fees and fee-splitting, to retain as much as possible.
Paul continues to stand at the helm of the business, bringing his personal guidance and wealth of experience to all members. He lives in Sydney with his wife Annie and son Beau.
I have never met an established agent who stops earning fees. For all of us, income goes up and down, as we all have our good and not so good months. However, if over a year your GCI (annual gross fees generated before you hand a large percentage to your boss/franchise) is respectable, then you are an excellent candidate for a One Agency business.
Many agents ask me this: ‘if I were to join One Agency and start my own business,what would be my biggest challenge?’ Well, there is only one! It’s the only thing you must absolutely know how to do. It’s a very simple straightforward question: can you list property?
A sustainable business is a business that is profitable on an ongoing basis. Sustainability is a business that can withstand the inevitable changes in market conditions and cash flow. That’s why I created One Agency and why One Agency has become so popular – because reliable profit is our focus.
Whenever I hear of someone speaking to others about a certain seminar or book that reveals the true secrets of real estate success, I have a quiet chuckle. The plain and simple truth is that there are NO secrets in business, of any kind. People claim to have unearthed neverbefore-heard-of secrets. But those claims are always exaggerated.
Even if there really was a secret in the first place, nothing stays secret for long, especially not with the speed that information travels these days. It’s all nonsense. So the title of this chapter is a tongue-in-cheek one.
It goes without saying that if you’re an existing business owner you’ll be more familiar with the associated risks of business ownership. However, complacency can be just as big a threat to an established business as naivety is to an aspiring business owner.
Generally speaking, to avoid risks, simply don’t do anything!, That’s clearly the easiest way to avoid risks, right? It makes sense, but in avoiding the risks you may be avoiding the best decisions for your life.
If you’re already the owner and operator of your own enterprise, you will be familiar with the rewards of business ownership. However, streamlining some aspects of your operation, by being open minded to the impact of new technologies, approaches to business operations and people management can enhance your bottom line profit. I will expand on this in the following chapter.
For anyone contemplating change, the hardest element to decision making is making the decision, that’s why so many people put it off.
All the help you can get I say! A smart business-person is someone who gathers as much support as possible in every form available and then makes an informed decision.
You won’t be the first person to walk down this path. So there are potentially lots of experienced people to learn from, people just like me.
The question raised by this chapter wouldn’t have existed 10-15 years ago, because if you wanted to open your own real estate business back then, the first thing you did was to select the area and secure a shop – as I had to do with my first business. It was a given.
I’m not anti-shop-fronts, I’m just anti-the-costsof-shop-fronts, especially if the task at hand can be achieved without one.
Many employed real estate agents delay venturing into business ownership because they don’t think they’re good enough. At the same time, they’re frustrated, some deeply, because they have to sacrifice so much of their hard-earned fees – irrespective of their sales performance level. If that sounds like you,
Business ownership options have changed over the years. When I first started out in real estate, all those decades ago, there were few options compared to today. The backing of a well-known brand was essential if you wanted to be taken seriously. If you were running a real estate business you had to have a street front, in the most visible part of town you could afford; and a location with lots
I’ll discuss the things you’ll need to do to set up a successful business later in the book, but now I want to share my story with you. I worked for a boss for 13 years before I started my first business and have since run five businesses, and the experience I gained can potentially save you from making costly mistakes.
My first job was in property management in 1972, building and growing a rent roll for my boss. After five years,
Many people go into business ownership withenterprising ideas and big dreams, but the ruth is that owning a business really can’t be for everyone. On the plus side, you won’t have an employer telling you what to do; but you’ll trade that for juggling many balls and wearing a lot of different hats.
To own a successful business is to grow as a human – you will expand your thinking and become a more capable and resourceful person. You may not be aware yet
Your belief in yourself is the single biggest factor in determining your business ownership future.
Business ownership is not for everyone and that’s a fact – it can’t be. In my own experience I never really dreamed I would own a business, and when the thoughts started, I certainly had a lot of serious doubts as to whether I could operate my own enterprise. Of course it’s much easier not to do something, avoid the torment in your mind and the real possibility of failure!
It’s 1985 and I’m sitting at my desk at Lidan Realty in Neutral Bay, Sydney. I’ve worked there for 13 years and, looking through the window onto Military Road, I see a familiar figure walk towards an unfamiliar car, open its driver’s door, get in and drive off. The picture just doesn’t compute.
I first met Paul around 2012, when he came to my office at News Corp to introduce me to One Agency. He struck me as someone who was extremely passionate about real estate, what he was building
Acknowledgements
This book would not have been written without the help of the following people; firstly my wife Annie, who inspired me to start One Agency. She has set me in the right direction on so many occasions, is a wonderful mother to our son Beau, and is the
most patient and loving person I know.
Also my father Bill, who taught me so much, and who would be so proud today.
Finally, I must also thank all those revolutionary agents who have joined us at One Agency and who share in my vision.