Do You Own a Real Estate Business or a J-O-B?

Here's a question every real estate agent should answer honestly. What happens to your business if you stop working for a day? A week? A month?

If the answer is that everything stops, you probably own a job, not a business. You might be the owner on paper, but you're trading hours for dollars like any employee. That's fine if it's what you want. The problem is when it happens by accident.

On a recent Tuesday training, Mike Pillow from our team and Scott, a broker from San Antonio, joined me to dig into this. Here's how I think about it.

Two books worth reading more than once

I've read two books at least three times each, and every time I got something different because I was at a different stage of my business.

The first is The 4-Hour Workweek by Tim Ferriss. It's about building a business and a life that don't depend on you pushing a boulder up a hill forever, like Sisyphus in the Greek myth. If that's how your business feels, you might own a job.

The second is The Millionaire Real Estate Agent by Gary Keller. I've never been with Keller Williams, but the book has a lot of great thinking in it, and it gives agents a real road map.

Freedom comes with accountability

I asked Mike Pillow, who spent years in the military and as a postmaster, how he sees the difference. His answer: most people don't love their jobs because they have to answer to somebody. When you run a business, you answer to yourself. But that means you have to hold yourself accountable. Nobody is looking over your shoulder to make sure you're productive.

Not everyone has that discipline, and that's normal. You can add accountability with a mentor, a team leader, a broker, or a coach. I have a friend who has had a business coach for about 20 years, through several different businesses, and I'm convinced it's a big reason he's done well. Most real estate agents go it alone, and I think most of them end up owning a job.

The levels of a real estate business

In The Millionaire Real Estate Agent, Keller describes seven levels of growth. It starts with an agent who has no leverage at all. From there, you add admin help to buy back your time, then more admin support, then agents who handle buyers, then agents who handle listings, then someone to manage the staff. At the top, the owner hires someone to run operations and focuses on owning the business, and often other businesses too.

The key point is that in the early levels, when you stop working, your income stops. Each level adds leverage, so more keeps happening when you're not there.

So where am I? Honestly, I'd put myself around level five. I have a large admin staff, but I'm still the one managing it, and everything still comes back to me. I don't have the appetite to be a principal broker like Scott, and that's okay.

I know agents who run as a solo agent with four, five, or six admins and virtual assistants. That's still technically a job, but it's a leveraged one, and they're very happy. A friend of mine, Brian, runs a team in El Paso that doesn't follow Keller's model exactly, and it works for him. Another friend, Sam, in Washington, D.C., owns construction and development businesses that all tie back to real estate. There isn't one right destination.

Leverage costs money, so grow into it

Scott made an important point. The model is idealistic. Admins, bookkeepers, and managers are on salary, and the income has to be there to pay them.

He's right, and Keller addresses it too. We really only have two assets, time and money, and we're always trading one for the other. For years I did my own bookkeeping because I kept telling myself I couldn't afford to hire someone. Eventually I realized I didn't have enough hours in the day not to. Otherwise my evenings went to bookkeeping instead of my family, dinner, or appointments.

You don't hire an ops manager on day one. You start with some admin leverage and add more as the income supports it. The difference between the book and my own path is that I did a lot of this by accident. If you take one thing from this post, make it this: have a plan. Decide how big you want your business to be, then build toward it on purpose.

And if you decide you want to stay an owner-operator, that's a perfectly good choice. Plenty of great plumbers never build a big company. They stay busy, do good work, and remain plumbers.

Use the DEAL framework

Once you know where you want to go, Tim Ferriss offers a simple way to start taking back time. He calls it DEAL:

• Delegate. List everything you do and decide what someone else could do. The work still matters, but it doesn't all need you. Hiring a bookkeeper was my version of this.
• Eliminate. Look honestly at what you do every week and stop doing what isn't productive. Almost everyone can find a few things to cut.
• Automate. Use software, your CRM, and AI for tasks that need to happen but don't need your personal input. I use AI for a lot of tasks now. I still oversee them, but they don't take my hours.
• Liberate. That's the payoff: freedom from being tied to the job, because things keep happening when you're not around.

What leverage looks like on a team

I asked Mike Pillow what being on our team does for him. He said the best thing he did when he got into real estate was join, because of the training, the mentorship, and the admin staff taking work off his plate. That's given him more time for things like prospecting.

He's started adding his own leverage too. His postcard mailings grew to the point where it was cheaper and faster to have a printer handle them, so he hired one.

He also brought something from his postmaster days: he won't manage a job he can't do himself. He'd put on tennis shoes and walk a route to understand it. In real estate, that means he learned how to input a listing before asking anyone else to do it. Know the work before you delegate it, and you'll manage it much better.

A team is one path to leverage. Hiring a coach, working with a mentor, or building your own team are others. The question is how far you want to go.

Leverage doesn't get you out of sales

Here's the mistake I see. Keller boils our job down to three things: listings, leads, and leverage. And no matter how much leverage you build, you're still in the lead generation business.

I recently saw someone online say he was thinking about becoming a home inspector. "All I have to do is one or two inspections a month." Plenty of people told him to go for it. But those inspections won't fall into his lap. He'll need a website, ads, and relationships with agents. That's a lot of marketing and selling for 12 to 24 inspections a year.

Every business owner, like it or not, is a salesperson and a marketer. The plumber, the handyman, and the attorney all have to find clients. You can do it yourself or pay someone else to do it, but you can't skip it.

A lot of agents decide they aren't salespeople and rely on paying third parties for leads. That can work, but I think agents who don't embrace lead generation are missing something. Scott said his office doesn't pay for leads up front. He's happy to pay referral fees at closing, but he still believes in walking the neighborhood and knocking on the doors around a new listing, something many agents treat like a foreign language. As Mike Pillow put it, if you build your business on hope, good luck.

So, which do you own?

Take an honest look at your business. If you stepped away for a month, what would keep running? Then decide what you want your business to look like in a few years, and start building the leverage to get there, one hire, one eliminated task, and one automation at a time.

If you're an agent thinking about what a team could do for your business, or you just want to talk shop, email me at mike@21mike.com or schedule a time at 21mike.com.

Want to see the full session? Watch our Tuesday training on owning a business versus a job.

Mike Ferrante
The Mike Team at LPT Realty
www.21mike.com
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