Page 37 - The Negotiator Mag 52pp

All successful businesses consider when and how to expand as part of a healthy approach to future strategy and estate and letting agents
are no different. But the time has to be right. Are the economic circumstances favourable? Do we have the capital to invest? Will we be able to manage a larger business with more branches? Can we recruit the right staff? These are all questions an ambitious agent keen to expand, needs to be sure of before taking the leap – the cost of a mistake could be the continued success of the business already established.
So the options are to acquire an existing business, to take on a franchise, or to reverse your existing business into a franchise.
To give you an idea of what these options entail, we asked the practitioners in business transfer and franchising how they operate.
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Growth though acquisition
Let’s start with how you might expand an existing agency business in the traditional way. Peter Nicholls from Ideology Consulting says
It is vital that you acquire
a business that represents the same market sector in which your existing business operates, in order to retain the clients and income stream. Peter Nicholls Ideology
that businesses looking to expand should reflect on a few key points to consider the right path for them.
Cold starts are cheaper but they are also
a ‘slow burn’ in terms of client goodwill and turnover, as the set-up costs are don’t require the upfront investment. But access to the local market is slower, he says.
By contrast, the acquisition of a business, or portfolio, gives a new venture automatic access to local clients and accelerates the process of becoming established in a new area. And most importantly, it has an instant revenue stream.
“It is vital that you acquire a business that represents the same market sector in which your existing business operates, that is lower, mid-market or upper market, in order to retain the clients (and income stream) that you are in effect purchasing when you buy an opposing business’s client roster,” he says.
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Branching out
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For ambitious agents, there are shortcuts to fast business growth
– but they take investment and commitment, as David Callaghan explains.