How Can the Corporate Model Help You Add Money to Your Bottom Line?


Today, we're going to get into the 3 elements of the Corporate Model, which involves leveraging yourself through better organization and delegation. The only way you can earn $500,000 to $1+ million is to build a team - not just any team, but one based on sound business principals. The Corporate Model has three key features when compared to the traditional brokerage or team models:
  1. The company maintains the client's lifetime value and delivery of value proposition to consumer as opposed to giving up control to your agents. In that other agent I was talking about, once my client handed a buyer sign call to that other agent, the consumer experience was based on that other agent to deliver whatever experience they wanted, plus each of their agents closed their own files, so there is no consistency in the contract-to-closing portion in that experience. There is also no team follow-up. The maintaining of a client's lifetime value is super important in the corporate model.
  2. Work flow processes are performed by specialized employees rather than a jack-of-all-trades traditional agent. We have broken down into specialized departments. We have buyer specialists, listing specialists, inside sales people, and listing/buying client care people. We are a specialized team.
  3. Agents are transitioned from traditional high splits to much lower splits in line with the value they provide in the transaction. The compensation models I use in my business are radically different from anything you've seen traditionally. The traditional team is a 50/50 split, with a higher split to the agent who uses their sphere. In this model there isn't much value added to their team. The best case for the owner's gross margin is 40%, while we're operating at 60% margin, so there's a 20% gap in my team in terms of gross margin. I'm retaining 60% GCI minus our agent pay to pay expenses and pay myself profit. It's because we provide most of the value; we bring 80% of the business to our agents vs. relying on our agents to bring business to the team.
Hopefully this was helpful. In my opinion, it's value to form your own opinion about what you think is happening in the real estate industry and how it's going to impact you. It is going to impact you. I believe that every market should have 10 options for clients - there should be 10-20 teams doing business.

You need to form your own opinion about where the industry is going and how you want to interact with it. Maybe you need to be a listing partner, or a buying partner, on a team. Your ability to work on your unique ability and focused on your specialized skills will give you the best return for your time spent! 

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