Too often, we examine the risk and make it too large.  We view the first hiring of an administrative assistant as a $30,000 per year expenditure.  This is especially true for your very first hire.  Your mind says, “Well, what if I don’t increase sales; what if I have an off year; what if the assistant doesn’t get it?”  These are natural thoughts, but in many cases, they are blown out of proportion.

 While you might invest $30,000, or $40,000, or even $50,000 over the course of the year in pay, taxes, and benefits for an assistant, you aren’t taking that level of risk without some safety value.  If, six months after hiring your first or adding another administrative assistant, your production doesn’t increase or show signs of increasing, would you keep the employee?  For most business people, the answer would be NO.  A good business owner will not go much beyond a reasonable period of time to try a new technique, staff member, or lead generation system.  I believe that six months is ample time to know if something is working and producing a result.  With a staff member, it could be closer to ninety days.   Your financial investment during that time period could be $7,500 to $15,000.  For most agents, the expense is around two commission checks to test the waters.  We invest two commission checks on hair-brained marketing gimmicks almost at will.  We are really trading their $10 to $20 per hour in pay for our potential to earn $300 to $1,000 per hour.  Can you invest greater time in success producing activities, even though you have to invest time in training? With buyer’s agents, we have to evaluate difficulty.  The question is, if you don’t work with some of these buyer leads, can you invest your time to secure more seller leads?  Can you then convert those seller leads effectively enough to offset the buyer income reduction and turn a profit?  Do you have a choice because you might need to secure more listings to grow your business anyway? I frequently coach agents to do the “old” Ben Franklin close when evaluating the risk and reward; to draw a line down the middle of the paper and put risk on one side and reward on the other.  Then just brainstorm each side.  I encourage them to write as much as they can as quickly as they can.  When you do this, don’t evaluate, score, or interpret what you put down . . . just write.  The time to evaluate is not at hand yet.  Once you have brainstormed it, then you will need to see the difference in the number of items on each side.  The shear volume is one factor to consider.  The quality of the items must also be evaluated.  Some of the risk items on your list will be small, but others will be more significant.   I have had times when I personally did this exercise when the reward side presented a tremendous opportunity and upside.  There was a large volume difference of items on the reward side versus the risk side.  The problem is there was one item on the risk side that swayed my thinking.  It killed the option of moving forward.  Do this evaluation with the critical business decision you are facing. 

When to take the next step

 I want to share with you a few benchmarks to evaluate in your business.  These are benchmarks that I have constructed through years of coaching agent to build teams. The Rule of 30: Most agents reach the point of diminishing return at around thirty units in production.  They have difficulty increasing their production much more than that as a singular agent.  They might be able to squeeze another five or even ten units, but they are bumping up against the ceiling of production for a singular agent.  The mix of your business will also influence this Rule of 30.  If you generate more transactions through buyer representation, rather than listings taken, your maximum will be closer to thirty. Most agents who surpass the Rule of 30 (as singular agents) by more than ten units pay a high price in terms of their time and quality of life.  They are merely willing to work more hours and often too many hours to grow their production.  This 24/7 model isn’t sustainable for the future, and leads to health problems, children challenges, and relationship issues.  It isn’t the way to live and run a business. Another clue to pick up on would be survey scores.  I believe that every agent should establish some type of customer survey system.  We need to know how we are doing.  If you survey your clients, you will be able to learn what’s most important to them, what you did well, and what you didn’t do well.  You might find, through surveys, that your staffing levels are too low; that your communication, reporting, feedback, and overall service was less than the client wanted or expected. In order to achieve a high level of efficiency and a high return on your investment of time, your buyer’s agents need to be doing in excess of thirty units of production a year.  That would be at the bottom of the good scale on an efficiency model.  If you had five buyer’s agents who did thirty units each and you did seventy-five units on the listing side in your personal production, your total units for the year would be 225.  You would have six people, including yourself, for those 225 units or thirty-seven units per person.  That would put you in a solid efficiency category for effort and return on investment.  The goal is to be north of the thirty units, based on the producing members on the team.  You also count in that group. Using an efficiency model to see if change is needed is a wonderful way to check your progress.  After coaching hundreds of teams personally in almost ten years of coaching, it’s clear to me that we need to understand the average production that should be done per staff member.  By calculating per producing agent production per unit as overall staff member production per unit, we can apply a scale of performance to see if we are efficiently handling business and when to add more staff. A Champion Lead Agent will produce between seventy-five and 100 units a year in sales.  These sales will result from listing activity almost exclusively.  There will be few transactions on the buyer side of the business.  This Champion Lead Agent will have limited involvement in administration, so their listing coordinator and transaction coordinator must be stellar to achieve these levels of individual performance.