Building a Brokerage on a Budget

Posted by:

Entrepreneurship is the leading cause of success.

Ask anyone that has experienced business success through the ownership of their own company and you’ll hear about the joy of nurturing a business through its various stages of growth, of tackling problems head-on and creating solutions where none existed before.

The real estate industry in Ontario has its own particular measurement for success: brokerage ownership.

But quite frankly this isn’t a step many brokers take because of the amount of cold hard cash needed to open a brokerage. Real estate sales is a competitive arena, ask any realtor, and there are significant costs associated with the opening of a new boutique brokerage or franchise.

Some fees are equal across the board, such as incorporation and accounting fees. Other costs that include leasing office space, marketing materials, staff salaries and franchise fees can take the start-up cost well over the $25k level of investment before the doors to your new brokerage open.

Even a small brokerage, with just the Broker of Record as the only staff member, can generate mountains of expenses for office space and equipment that are the large ongoing costs of staying in business, even if other costs are minimized as much as possible.

Real estate teams don’t fare much better because they will usually require administration staff to manage the day-to-day office work (paperwork, answering phones, etc.) allowing the team members the needed freedom to prospect and sell and adding significant staff salaries to the mix.

Just as any business owner will tell you, it’s the “everyday costs” of running the business that makes it an expensive proposition. Clients don’t usually see the square footage costs of the office space or the annual salary of the people that keep the business open every day.

And when your business is as highly competitive as real estate sales, you need to network, market and be available 24/7 to make the impact you need to survive.

Referral business is just as important as finding new clients and you need the time to keep up with market trends, neighbourhood changes and, as the broker of record owner, regulatory and compliance issues that can quickly bury you under paperwork, stealing away valuable time from selling.

Realty Point, established in 2014 in Toronto, has introduced a new model of real estate brokerage franchise by bringing to the industry a platform that helps brokers to establish their entrepreneurship and open their brokerage, all the while minimizing the start-up and ongoing expenses that were previously the obstacles to brokerage ownership.

Realty Point franchisees benefit from the “shared resource model” common to office business centres, with private office space provided at a low monthly cost that includes the use of office equipment and administration staff that handle the day-to-day management of running the brokerage (paperwork, answering phones, etc.). A low “per transaction fee” covers the expense of listing paperwork and transaction closings as well as deal accounting, bank account reconciliations, and guidance on keeping up with regulatory changes and compliance issues such as FINTRAC.

Realty Point helps brokers make the transition from real estate sales professional to brokerage owner more promising than ever.