How to Start Your Commercial Real Estate Firm in 10 Achievable Steps Monday, April 17, 2017
Commercial real estate is an exciting, interesting, and rewarding field to dive into, as your work can help shape an entire community. Thinking about starting your own firm? There is a slew of aspects you need to consider. Not sure where to begin your journey with running a thriving organization in a rapidly growing industry?
Follow this practical 10-step process to establish your own CRE firm, from the experts at The Robert Weiler Company:
Step 1: Choose a Commercial Real Estate Mentor
Even though you may be a recognized leader and ready to take the leap as your own boss, never be afraid to ask for advice. If you’ve gotten as far as establishing your own firm, you’ve probably spent some time in the industry and met talented people along the way. You may understand the retail leasing sector, but lack knowledge in industrial building leases, for example. Keep in touch with these key people and maybe even ask one if he/she would be your mentor.
If you don’t have a vast network of industry connections, challenge yourself to attend networking events; perhaps form alliances with other business owners. This can provide you with an excellent source of support and guidance when you need it most. Having this type of support from peers in your industry (or even just other entrepreneurs) can also prevent you from feeling isolated.
Step 2: Apply for Your License
No matter if you’re selling an apartment building or negotiating a warehouse rental, your state may require a real estate broker’s license to conduct the transaction. You may not be able to open your own firm without it! Steps to obtaining a license may include an age requirement (21+), specific courses, and practicing real estate for a specified number of years.
Step 3: Gather Your Savings
It’s no secret that starting a CRE business (or any startup, for that matter) takes money, whether you want to lease office space to clients or focus on industrial space for rent. Once you identify your ideal location, you’ll need to have the cash flow to make lease or mortgage payments. You’ll also need to have enough money to afford other initial expenses, such as insurance (see #5 below) and office equipment. Vital office equipment for your company may include:
- Waiting area furniture
- Office desks and chairs
- Phones and phone system
- Fax machine and copier
- Office computer(s)
As a rule of thumb, you should also have enough funds prepared to cover operating expenses for at least three months; these can include (but are not limited to) rent and utilities, as well as advertising and membership dues to a CRE organization(s).
Step 4: Find a Great Location!
As we’ve learned over our long history, location is essential when it comes to Ohio real estate. Establishing your own firm’s office is no different. Put a lot of thought into the location of your space and what might be the most viable choice. Consider zoning restrictions, visibility, parking (for employees and clients), and the size of the space (if there’s room to support growth). There’s no doubt that today’s world is mobile, but location adds a great deal of credibility.
Step 5: Get Insurance
Having a fantastic space and eventually hiring employees can create a wonderful feeling; however, keep in mind that you will take on vicarious liability for the actions taken by individuals in your firm. Be sure to buy errors and omissions insurance to protect your Ohio real estate firm, should a client ever sue your brokerage. In addition, you may need other forms of insurance to protect your office property and workers. Make sure you speak to a qualified representative who can help you choose an appropriate plan!
Step 6: Create a Professional Website
Building a professional-looking website is vital to gaining the confidence of potential commercial real estate clients. Consider hiring an agency or freelance designer and web programmer to do this, rather than trying to do it yourself. When built well, a website is an investment that will surely pay off nicely for a long time to come.
Step 7: Recruit Agents
Depending on the intended size of your Ohio realty firm, you will need to hire agents. You can hire experienced agents for specific types of transactions; for instance, those who focus on renting warehouse space. As such, your firm can take advantage of pre-existing client relationships, which that agent has developed over several years. Just keep in mind that this will cost more money.
You can also opt to hire newer agents for less money, which can bring enthusiasm and hunger to the job. You may need to pay for their formal training or invest your own time to train them. You can also hire a mix of experienced and new agents.
Once you have agents in place, you’ll need to create an independent contractor agreement that includes information about expected behavior, provisions for commission splits, and other important considerations.
Step 8: Hire Other Critical Support
Starting and running a CRE consulting firm can be extremely stressful and overwhelming. Be realistic about your capabilities, strengths and weaknesses, and available time. Many entrepreneurs are highly motivated people and may be tempted to try to do it all themselves; however, spreading yourself too thin can be detrimental to your business (and your health).
Be honest with yourself and hone in on the areas of business that are your expertise. Doing so will allow you to acquire help for the other areas, such as accounting and marketing; perhaps you’ll also find that hiring a receptionist and an assistant will free up a great deal of your time. This strategy may have associated costs, but it may also save you a ton of money in the long run by avoiding business pitfalls and mistakes.
Step 9: Develop Clientele
If you employ agents with connections to clients, be sure they spend time reconnecting with those clients. Make sure your agent educates them about the benefits of your new company and why they should hire your firm and perhaps recommend you to others.
To attract new clients, advertising is a tried-and-true approach. With many people searching for CRE firms online, digital advertising is a must (e.g., boosting your search engine visibility); though, don’t forget about other mediums, including:
- Bus wraps
- Direct mail
- Real estate publications
In addition to traditional advertising, increase your publicity by holding an office open-house. Give away small, useful items with your logo on it, sponsor local businesses/charities, and promote the event on social media.
Step 10: Learn from Established Firms
The commercial real estate industry is constantly evolving, based on the latest trends in technology, economics, business, culture, and more. To ensure success, research your biggest competitors; see what long-established real estate firms are doing. We invite you to look at us, The Robert Weiler Company!
Since opening our doors in 1938, we have turned our passion for both our industry and the Columbus, OH real estate community into a thriving company. In the beginning, we focused on the development of single-family housing units. Over the decades, we have expanded and built apartment complexes, retail centers, and warehouse developments. Our team works hard to ensure that clients are well informed and completely satisfied from beginning to end.
Our Unbounded Love for Commercial Real Estate
Over the years, The Robert Weiler Company has seen enormous growth. Columbus, Ohio has become a catalyst for business and an attractive community for families. Due to the changing environment, we expanded our CRE services expertise from land development and commercial brokerage to also include commercial real estate appraisals, property management, and consulting services.
Nevertheless, our methodology and work ethics have stayed the same; this has likely contributed to our nearly 80 years of success in the commercial real estate business. Contact us today at 614-221-4286 and learn how we can help you.