A solid and accurate definition of “market” is the foundational premise of building a working and profitable business.
If a brokerage firm has a deficient or innacurate definition of its true market all of the outcomes will be impacted by this inadequacy.
What is or, what should be your market definition. Is is only geographics or does it include other dimensions such as consumer behavior, business trends and other factors.
The following e-Partner Podcast puts a spotlight on the importance of market definition to a real estate brokerage firm’s business model and bottom line.
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Syndicated from REALonomics
In the post Unlocking Franchise Economics – Part 1,we opened the door to asking relevant questions that will help owners analyze the economics of real estate franchising.
In this series of posts e-Partner has one primary objective it would like to accomplish on behalf of owners and that is as follows:
…to help owners unlock the door to franchise economics so that gain an understanding of the substantive value propositions that exist and how a franchise name and associated promises can be quantifed in real dollars that are converted to a profit equation that is greater than it would be if the brokerage firm operated without the franchise.
Franchising is an Add-On Toolkit, with Limitations
At its most fundamental economic level a real estate franchise is a brokerage toolkit. Yes, there are all sorts of issues such as marketing, relocation, referrals, training, conventions, etc. But for now, we are setting those aside. A real estate franchise is an economic toolkit, at least it should be.
Franchisors spend a great deal of time butter-balling brands, numbers of offices, growth, name recognition, relocation, referrals, etc., and that is how most franchise sales people will present their proposition to an owner. It’s the owner’s responsibility to translate the presentation into real economic reality and performance and to insist that the franchisor do the same.
As a toolkit, there are some things a franchise can do, there are many things it cannot do and there are more things it does not want to do for a brokerage firm because to do them will harm the franchisor’s bottom line.
Let me be clear on this last point. At some point in the franchise relationship, an owner may find the franchisor a competitor for market territory, referrals, relocation and even local business.
Hungry? Read more and comment…