Guess Who Is Merging....

We hear this question more and more today in the gossip pool that is our real estate offices. 

We witness companies merging together weekly.  In most cases I liken it to owners jumping out of a life raft and attaching themselves to yet another sinking ship.  More agents do not always mean more profit if a deal is not structured properly.  In fact, it could make the boat anchor heavier and/or the hole in the ship wider -- bringing everyone down faster. 

When contemplating a merger, here are a few points to consider...

1. Is the company a fit with your organization? 

This is paramount.  Mergers fail daily because this question is an after-thought vs. the first thought.  Not only are they a cultural fit, do you (as the leader) fit with their organization.   Are your goals aligned with respect to growth, budgeting, technology, etc.  

Ask...

•  What are you policies?
•  Where do you spend your advertising dollars?
•  What do your agents say about the company?  Are they happy, have needs, etc.?

     2.  Are there scales of economy that can be created by combining companies/resources?

If there are not, there is likely no reason to combine companies in today's environment where lean and mean is the only way to profit. 

Ask...

• Can you combine offices to eliminate a lease?
• Can you centralize any administrative tasks to maximize production?

This may seem like common sense, but I've seen companies merge and not eliminate staff and leases because they are too affraid of rocking the boat.  When a merger occurs, the boat has been rocked, and is an opportunity to change everything at that time (all at once) vs. making changes AGAIN later. 

     3.    How can you structure the deal?

Your franchise should be a valuable resource here.  At Real Living we have salespeople in the field daily who talk to brokers who are looking for an exit strategy.  We introduce our franchisees to these opportunities.  Additionally, we have a proprietary system and consultants for our franchisees to tap into for help.  Real Living has grown in good times and bad by mergers and our knowledge in this arena is readily available to our network. 

Companies are struggling out there and today's environment provides an excellent opportunity to build your company.  Owners today are so sore from the past two years that they, (using my original metaphor) are tired of bailing water from their boat.  I encourage you to look for these opportunities as today's environment provides an opportunity to grow your company and market share less expensively than you would during good times. 

Connect with me offline to discuss merging your company into a Real Living company or to learn how you can tap into our proprietary system. 

What's the scoop??  Who is merging in your area of the country??