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How to Build a Brokerage, the Entrepreneurial Way

Finally, real estate brokers get their own E-Myth.

No, I’m not talking about some sort of internet rumor or online fairy tale. I mean that business writer Michael Gerber has made real estate brokerages the eighth stop on his planned 310-industry tour to “transform the state of small business.”

Gerber has a potent idea to sell. The “E” refers to entrepreneur; his first book was aimed at small business owners. He then branched out to offer advice to industries that tend to operate like small businesses. As one might imagine with such a commoditized approach, Gerber tends to paint with something of a broad brush in promotional materials. For example, in describing his E-Myth books here, he repeats seven out of the eight times that the industries highlighted in his books are each “a juggling act.”

It’s clear he needs a little help from his friends. Thankfully, he knows that. Each of his books features writing from an established industry leader. And thankfully for brokers, he chose Rich Rector to co-author The E-Myth Real Estate Brokerage: Why Most Real Estate Brokerage Firms Don’t Work and What to Do About It (Prodigy Business Books, 2012).

Rector has served as chairman, president and CEO of Realty Executives International since 1984. After purchasing Realty Executives Phoenix from his father in 1980, Rector led an aggressive international franchise expansion, growing the company to 800 franchises in 10 countries.

Rector composes every other chapter in the book, giving a real-life, down-to-earth feeling to what might have otherwise been a dry business tome. For example, Gerber’s chapter titled, “On the Subject of Pricing” is followed by Rector’s much more vernacular “What to Charge?” chapter. The every-other chapter concept gives the work a more conversational tone, as if you’re sitting down to coffee with these two entrepreneurial heavyweights.

The subject matter is both broad and deep. The authors seek to redefine high-level theoretical concepts such as leadership and management, but they also drill down into the graspable numbers and percentages that brokers need to address.

While the intended audience is definitely brokers, both authors spend time talking about how brokers can serve agents as the true “clients” of a brokerage, if sometimes tongue-in-cheek. In his chapter on associates, Gerber writes:

Long ago, God said, “Let there be Brokers. And so they never forget who they are in my creation, let them be damned forever to hire people exactly like themselves.” Enter the Agents.

Appealing to newly-minted brokers or those looking for a significant change, Rector analyzes brokerage types and the recruiting strategies that go along with them to help brokers better understand the kind of business their entrepreneurial vision would be best suited to build. Overall, the ideas in this book seem like they would be easiest to implement from the very beginning, so a sole practitioner who dreams of opening their own brokerage would be wise to pick this book up before diving in.

Meg White

Meg White is the multimedia web producer for REALTOR® Magazine and administrator of the magazine's Weekly Book Scan blog. Contact her at mwhite[at]realtors.org.

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