Building a Successful Real Estate Operations Department

Have you come to understand now that you are a builder? Not in the sense of building houses or apartments or commercial buildings, but in the sense that you are building a business. And more specifically, you are building the operations side of the business. So what does that mean exactly?

Well, it’s your responsibility to determine what systems and people you will need to build the operations side. Once you’ve determined what you need, you can now collaborate with your rainmaker to acquire those systems and people.

When building the operations department, at some point you are going to need the the systems and people in the graphic below.

What I want to make absolutely clear here is that you may have tools and people that are not the most effective. Imagine that you’ve been instructed to chop down a tree and you’ve been given the choice of three tools to accomplish the task. Do you choose the scissors, the ax, or the chain saw?

Now remember, we’re building the operations side of the business here. And when you first started building, perhaps the job called for scissors. The challenge is for you to recognize when you’re no longer using the appropriate tools (or systems or people) to get the job done.

You are always looking for the next opportunity to upgrade your systems and your people.

When I joined my current rainmaker, I was the sole admin and he was the sole agent. He had a CRM in place that was working okay for him. But as I explored it, I realized very quickly that it had no transaction management built into it. I knew that I could cobble together my own system using printed checklists or an Excel spreadsheet, but that would have been completely inefficient. And as we built the business and started putting more and more transactions through that inefficient system, it wouldn’t hold up very long. So I insisted on a CRM upgrade to one that included transaction management. To cut down the tree, I chose to trade in the scissors for the chain saw.

If you’ve ever heard someone talk about scaling, that’s exactly what they mean. In thinking about the systems you have now, can you run double or triple the business through them without those systems breaking down?

And the very same is true of yourself. Can you run double or triple the business by yourself without breaking down? No, because you are not scale-able. Sure, you can learn a few things that might make you more efficient, but you will never be able to learn enough to double or triple your current capacity alone.

That’s why it’s crucial to hire leverage. You can get more efficient with your time if you hire a photographer or a graphic artist rather than taking the photos of the listings yourself, or creating logos, postcards, and flyers yourself.

What I see too often is rainmakers who declare there’s no money in the budget to hire additional people to take on the additional business. My question then is, where is the money going? If there’s an increase in business such that it’s necessary to hire someone to handle the additional business, shouldn’t there be an increase in revenue from that business?

That’s when it becomes critical to review the profit and loss statements with your rainmaker. Where exactly is the money going? Can you cut out things you no longer need so that you can add ones that you do? How much more business needs to come in before there’s money in the budget to improve systems or hire leverage? And what’s the plan to get that additional business?

Keep asking these hard questions. It’s difficult sometimes for rainmakers to make the transition from “being a real estate agent” to “running a business”. It’s up to you to help your rainmaker make that transition and to push for the things you know will help build the business.




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