Caution: Merger Ahead!

The other day I was surfing the net (that is code for avoiding the things that really need to get done) and ran across the new Honda Coupe website www.why-merge.com. I have to admit that I was a little curious due to the title alone. Of course the website is a great Gen Y marketing tool and had a great irreverent undertone. After clicking through a couple of pages I began to think about the application to real estate - especially in today's market. Why merge? Interesting. Why would a company want to do that, not to mention - now?

What better time to concentrate on the subject at hand. We're obviously in a market that has caused broker/owners to consider why the heck they are in this business. Others are realizing that there really is a reason why they are called: BROKE-ER.

It's no secret that financial pressures are taking their toll on some organizations. Yet others are humming along still churning out single to double digit profits. Yes, their profits are down from historic highs, but through the proper financial planning they were prepared and are now surviving. Surviving in order to take advantage of this market by growing their operations. Fold-ins, acquisitions, mass-recruiting are all road signs of our industry, no matter where you're located.

No matter how many times I've broached this subject in a consulting meeting with a brokerage owner, I typically get these same excuses:

1. No one is for sale.

2. No one will talk to me.

3. It takes too much money.

4. It won't work in this market.

These are all myths that are unfounded and based upon a lack of knowledge of exactly how and exactly what to do in a merger/acquisition scenario. After all there is a great big unknown out there, sadly made larger than life by fear. Of all the mergers, acquisitions, fold-ins, buy-outs, exit strategies that I've been involved in or helped orchestrate as a consultant, I've only seen a handful require any substantial money upfront. No different than a seller carry-back mortgage, many brokerages are transferred under similar terms. Thereby providing a long-term income for the selling party. Of course, fold-ins typically require zero investment other than an override and attractive split for the broker/manager who is folding in their operation.

Reasons #1 and #2 above are easy to overcome. A couple of years ago I was consulting with a brokerage firm in the Ohio Valley. The owner was looking to grow her operation through recruiting alone and had never really thought about acquiring market share through an acquisition. After educating her on the merits of such a strategy, she gave me the old #1 and #2 and added a couple of other reasons why it wouldn't work. I asked her to move forward in blind faith. Here's what we did. First, write a letter to the offices that fit the acquisition profile: selling brokers, small Ma & Pa, rumored financial problems, agent unrest, tired management, etc. Let them know that you are excited about the prospects of the market and would love to entertain discussions about how we can accomplish more together than as individual companies. Go on to pay a compliment and let them know that you would welcome a conversation to explore opportunities to work together. Confidentiality assured, of course!

The Ohio Valley broker did just that the following week. She sent out a dozen letters in her small town - where no one would ever entertain selling out, and received 5 immediate responses that resulted in the acquisition of two local competitors. All as a result of a little 3 paragraph letter that took no more than 10 minutes to write. I guess some of the owners that gave me the excuses in the past were right. It really doesn't work.........if you don't try it.

Musings on Talent: Why We Lose it and How to Find it to Prosper

As a lifelong musician, I’ve noticed that few adults realize the talents they have. So, I’d like to talk to you about your talents—and what you’re planning to do with them this year. No, it doesn’t matter if you’re an agent, a manager, or staff. We all have talents, those unique sets of gifts that somehow came together in one personality with your name on it. Now, don’t tell me you don’t have talents. Everyone does. Sometimes, they just don’t know it! Or, more often, they discount their gifts, not realizing how valuable and powerful they are.

Everyone teaches us something.

Once when lots of bad things had happened in my life, I read several books about why we were on earth, and what was the point to all this. One of the authors said we were here to teach others something. Having been the daughter of a teacher, and doing some teaching myself, that seemed a good way to look at it. As I decided to write this to you, I started thinking about what various people in my life had taught me. As you’re reading this, you’re thinking, probably, of those stand-out mentors you had in your life. It’s easy to see what they taught us. But, let’s think of some unlikely candidates.

My uncle Bud, for one.

Bud worked for my dad, never married, was an alcoholic—and a nice guy. He died when he was 45. So, what gifts did he have? What did he teach us? When Bud was a little boy, his teachers said he was dumb. Later on, it was discovered he wasn’t dumb. He just couldn’t see. So, Bud didn’t go to school much, and besides, his parents wanted him home to work on the farm. Bud drifted through life, working and drinking, and ended up in little Lebanon, Oregon, working for my dad.

Similar Physical Limitations, Different Outcome

My mother, who also had eye problems her whole life, started out much like Bud, unable to see well. But, her parents got her the best medical care available so she could do the best with the sight she had. Her parents encouraged her scholastics, so she was able to skip a whole school year that she’d missed because of her eye operations and go into second grade, barely skipping a beat.

Bud and my Mom—Great Teachers

Some people weren’t very nice to Bud. But, my mother felt great compassion and empathy because of their similar eye conditions. Every day Bud would have lunch with us, and I watched my mother interact with Bud, showing him respect, while others didn’t. That made me curious. I started to learn other things about Bud. Even though he had been teased and berated as a kid, (and later, too), I observed that he was kind and thoughtful to others. I also found out he was very musically talented. My mother’s interest and compassion in Bud showed me that everyone has unique, sometimes undiscovered talents. Sometimes their situations teach us what we need to learn, even in an oblique way. Watching Bud and my mother interact taught me to appreciate others’ struggles and find compassion for them, no matter their situations.

By our actions, we are teaching every day. Make it the best lessons.

I hope, by this time of year, you have written business plans, set your goals, and are prepared for an exceptional 2008. But, there’s much more to achievement that the ‘hard’ information. I wanted to have a different way of helping you create the best YOU there is! All you need to do is to develop those gifts, those talents--and have the confidence that you can do it. So, expand your scope a bit, and decide on the gifts and talents you are going to use next year to help others. That will provide the fire and enthusiasm you need to push yourself to that next step, to be the best, excellent you that you were really meant to be. Here’s to that YOU!

Carla Cross, CRB, MA, is president of Carla Cross Seminars, Inc. and Carla Cross Coaching, specializing in real estate sales and management—the people issues. Cross, an international speaker and coach, is the author of 6 internationally published books, 20 productivity programs, and is a winner of the National Association of Realtors’ National Educator of the Year award. Contact her at www.carlacross.com or 425-392-6914.

Investing in Yourself: What’s your Best Investment and What Should You Expect from It?

Real estate agents are really in business for themselves. That means, as any business owner, they must invest in themselves. But what and how much? I’ve been pondering the relative investments companies and agents are willing to make in their successes. Unfortunately, many of the moneys and effort expended don’t seem to show any pay-off in sales or retention (more than 50% of new agents fail in their first year in the business, and I estimate that less than 10% of new agents make a sale in their first three months in the business). I’ve been asking myself:

What investment, if any, should the new agent make in himself? (Managers must be asking themselves, “If these failure rates are so high, does any investment make a difference?”)

What investment, if any, should a manager/company make in the new agent?

What investment is most important?

How would the new agent know that it’s worth the money?

I know that new agents and managers are given sales ‘spiels’ every day about how some technology or method is critical for the new agent. I want to ‘arm’ the new agent and the manager with some really tough questions to ask, and to answer honestly, before spending money on any method, technology, or service.

Tough Investment Questions

So, if you’re a new (under 1 year) agent, or a manager who hires new agents, I have some tough questions for you:

1. Why do you think most new agents fail?
2. What one thing would prevent this failure?
3. How much would you be willing to invest to avoid this failure?
4. Right now, which investment the company is making in new agents has a measurable pay-off in fast sales per agent? For retention of successful first year agents?
5. For any investment the company or manager makes: Can you measure the results? (If not, don’t invest in it)
6. Managers: How much is it worth to you to invest in a new agent to assure the agent makes a sale within three months? Within one month?
7. Managers: For agents who fail, how much money, effort, motivation, and team spirit did you lose? How much did it cost you in recruiting?

After you answer these questions, ask yourself: “If I were a McDonald’s franchise, what would be the one most important thing I would get from the franchise?” Answer: A start-up business plan with a systematic approach to building the business, coupled with strong, committed leadership to hold the franchisee accountable to the plan.

Bottom line: Investing in a start-up plan with high accountability (you can bet the McDonald’s consultants hold the new franchisee to a very high performance standard!) assures a much higher rate of success—and it’s measurable. Is it worth $100, $1000, or $3000 for you to avoid failure? It’s up to you to decide, and invest your dollars in the best method possible for you to assure business start-up success—fast enough that you stay motivated and inspired to handle the huge rejection and challenges new agents face.

Carla Cross, CRB, MA, is president of Carla Cross Seminars, Inc., and Carla Cross Coaching. Her 3^rd edition of Up and Running in 30 Days, the new agent’s start-up plan, is the only internationally published plan available to give new agents specific prioritized action plans to lead to a sale in 30 days. It’s coupled with the manager’s coaching companion, with dozens of tips on how to coach new agents to a fast sale. See them at www.carlacross.com, or contact her at 425-392-5914. Also, Carla speaks to real estate associations and companies internationally on increasing productivity.