Four Rules of Business Expansion

Four Rules of Business Expansion
Published on Wednesday, March 3, 2010, 7:48 AM Last Update: 2 week(s) ago by Dirk Zeller
Category: All Articles » Business Management



Rule #1 – Protect what you have currently



The easiest and fastest way to growth in your business is to protect what you currently have.

The National Association of Realtors® has done many studies over the years about our clients and the satisfaction and retention levels of both Buyers and Sellers. The numbers are really quite shocking. In a survey conducted over a series of years, 69% of people were satisfied with their Agent’s service. When they checked back with this test group, they found out that only 24% of the people who conducted another real estate transaction did so with their previous Agent. We only produced a 69% average of satisfied clients, which is about a C- grade. We then only got 24% of the total to even do business with us again – another 45-percentage point drop. Those numbers are really terrible.

What that says boldly to one is that we don’t protect what we currently have very well; that too many of us are sending out trash and trinkets in hopes of those leading to referrals and long-term relationships with our past clients and sphere. It is obviously not working!



Rule #2 – Improve your market penetration with your target market or the people you already work with.

Once we protect them, we need to expand our reach in our target market.
You also can convince your clients to invest in real estate; to do more deals with the people you currently do business with by getting their friends and relatives to work with you. Ramping up your referrals is a Rule #2 activity.



Rule #3 – Expanding horizontally in your core business area.

For the majority, your core business area is residential real estate. Whatever you generate 80% of your commission dollars from is your core business.

When you expand horizontally, you open up another section of your business or a new lead source but still remain in residential real estate. You could begin to work builders; market to condos, multiplexes, investment property, FSBOs, or expireds; or establish a new farm area.

Rule #4 – Change and create vertical expansion.

To expand vertically would be to move to a similar, complimentary business that is structured like the real estate business or has ties to the real estate business. This rule allows you to take what you learned in real estate or use the contacts you have in real estate and build an additional business and revenue stream.

The most common occurrence for Agents in this area is to open a real estate brokerage office and recruit Agents to work for them. You could also create a mortgage company, title company, escrow company, branch off into land development, building homes, or investment real estate. I have even heard of Agents becoming or forming a business partnership with a property and casualty insurance provider.

If you have data based well and communicated with your past clients and sphere frequently you certainly have the option of servicing them with other financial needs, as well.


Dirk Zeller is a sought out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters.