I have spent a lot of time helping my manager recruit new agents for our office, not for compensation but to help bring in great new agents and to strengthen our team. I always am questioned on the type of brokerage model that they should follow. I offer the following advice:
Do you view yourself as an Entrepreneur or an Employee? Do you know the difference? If not, then you must read the this following book, the E-Myth by Micheal E. Gerber (see link to Amazon) http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1204345425&sr=8-1
This book follows the pathway from disgruntled employee with a skill to the pursuit of independence to almost certain failure due to the lack of ability to be a true entrepreneur (hence the "E" in the title) and then finally to success.
I have re-read this book many times and loaned it out so many times that I have multiple copies floating around at all times. Many new agents think that all you have to do is get your license and the money will come. They are rarely prepared to finance their new venture. Which is such a surprise to me as a business person as any true entrepreneur always lines up his financing before beginning the venture while most agents hit the road with very little money to fall back on, much less very little cash on hand for marketing themselves and their client's homes (the backbone of our business).
Another trap that many new agents fall into is the 100% commission business model that is so enticing in the beginning when they have no idea of the cost of overhead of a successful business. While the 100% method may work for some, most agents need to realize that by sharing the commission with their broker, they are sharing the overhead costs. When they contribute nothing back to their broker for overhead.... they generally get what they pay for.
As for going with an established Brand for a split fee or going with an unknown independant for no fee, I tell this story:
If you were planning to open a burger shop - you have a couple of choices. You can open a small no-name, one-man shop and get all of the proceeds or you can open a McDonald's and share in the profits. In the end, which do you think will net the most business and profits? I guess it depends on the service and quality of the product (you) but how long will it take to develop a following at a one-man stand versus a Mickey D's? Something to ponder...
This said, I am always available to help new agents and love to hear success stories. If any of you have a great read, please share as I LOVE anything that will add to my business and my life.
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