Hello All,

Last time there was a real estate correction like this was back in the early 90s and in the mid west...mid 90s. I clearly remember many Stars with big teams going through a lot of financial challenges as the had to pay for their staff out of their own pockets. There was one big agent I knew who had a team of about 20 who almost lost everything because he didnt let the staff members go fast enough...the sales were supporting the business. SO, what are your thoughts on big teams vs small teams.

Tim

__________________
Tim and Julie Harris

Having been around since 79 and living thru both 1982-85 and 1990-95 (severe recessions in our area) we've been preaching the following. Cut fixed expenses ASAP. We've eliminated 2 positions on our team and shifted our TC to fee based. We've preparing to eliminate 2 more positions in our franchise (We own the local CB). The flip side of this is that we're looking at buying two franchise opportunities close by who are both performing poorly. Lots of Brokers are looking to bail! One year ago we started selling off a number of our rentals. Our market will be great area to buy in in about 18 months. Some of my product catagories are already down 30%. Now is the time to get lean and move into a cash position to prepare for opportunities.

Steve Williams

Having been around since 79 and living thru both 1982-85 and 1990-95 (severe recessions in our area) we've been preaching the following. Cut fixed expenses ASAP. We've eliminated 2 positions on our team and shifted our TC to fee based. We've preparing to eliminate 2 more positions in our franchise (We own the local CB). The flip side of this is that we're looking at buying two franchise opportunities close by who are both performing poorly. Lots of Brokers are looking to bail! One year ago we started selling off a number of our rentals. Our market will be great area to buy in in about 18 months. Some of my product catagories are already down 30%. Now is the time to get lean and move into a cash position to prepare for opportunities.

Steve Williams

Know your Profit and Loss, we have also adjusted fixed costs as the market changes, you have to make the hard decisions, be it staff, space or any other fixed cost. We have not cut marketing or prospecting but have cut back 4 admin positions in last 2 years, what is amazing is the survivors rally and we are actually more effiecent, when times are good we get lax with staff expenses, now is the time to tighten the belt if your market is changing, look at your profit and Loss (if you don't have one do one) every month and trim the fat! Bill Renaud

I have been preaching smaller more effecient teams for a several years now. Today with the changing market many will be either be forced to make adjustments in their operations or they may face some difficult financial times.

the question is WHEN to cut. WHEN is too early to fire...downsize the team?
When is it smart to actually grow your team in a changing market?

__________________
Tim and Julie Harris

I remember an interview that Howard did many many years ago -- the agent he was interviewing had gone, at that time, from two helpers to one. He asked why and she said, "When you have two people they do 1-1/2 people's work. When you have one person, they do 1-1/2 people's work." I always remembered that. I think it is much better to push the envelope, so to speak. Even though we all have larger teams, I think keeping the team stripped down is important. If you have "too many" for the market now, strip down. Don't go broke! Engineering companies, which my husband worked at, do the hiring-firing thing all the time, when their orders slow or stop. Then they hire again when times are better. But there is always an in-between time when everyone is working harder than they like before rehiring starts!

I just spent 5 days at Keller Williams Mega Camp. The primary focus was the shifting market. It all comes down to knowing your numbers and focusing on your bottom line. Don't make adjustments too late. Don't make the mistake of thinking that the downturn is just a temporary bump in the road. Those who react to the shifting market and run lean will come out of it with much better business's. The reality for most of us is the self discovery that we quit paying as much attention to our expenses during the hot market times. The shift could be very healthy for those agents who can react and survive. Downsizing teams may be an immediate reality for many of us. We have already cut one position and will be cutting another in a week.

Galand Haas

it seems that everyone is downsizing their staff in anticipation of the 'new' market. What is the ideal team model in this market? How many Buyer Agents etc?

__________________
Tim and Julie Harris

Tim- You asked when to cut, when to downsize and when is it smart to actually grow in a changing market. My thoughts are this...you cut and downsize expenses first (we can all cut out a lot of things), then people. Make sure each team member is operating at full capacity and then some and that there are no weak links. Weak links must go. I have evolved into a larger team out of necessity, not because I wanted a big team. I have increased the buyer agent side of the business, because right now the buyer agents are bringing in 65% of the sales. We are carrying 65-70 listings and will always strive daily to get more listings, but they are taking much longer to sell. We are making something happen with every lead that comes our way--where before we probably were a little lax and didn't convert as much as we should have or didn't incubate the leads. This is the opportunity for us to really focus on the basics and be massive lead generators. If each team member is a true talented asset to the team, then this is the time that others get out of the business, can't survive and we dominate and increase market share. We talk about the good, bad and the ugly on our team--they all are watching expenses and are aware that we have to tighten the ropes and be frugal. It's amazing what they will all do when they know their job could be on the line. I am making more money with a larger team, but I have also devoted my time to being a full time leader and business woman. I think some have large teams and probably don't pay a lot of attention to whats going in and out, etc. Bigger isn't always better, but smaller isn't always better either. I am much more leveraged, have super balance in my life and finally enjoy my children. Could I net more if I worked 7 days a week? Probably, but don't care to do that any more. Hope this helps. Jana Caudill