AG: The major financial considerations when you are starting out on your own are the cost of a brand and website, business premises, operational infrastructure from IT equipment to contract templates and, of course, people, if you are going to enlist administrative support to allow you to focus on fee-earning activities.
DC: As we all know, the property market is like an oil tanker – slow to cool down and slow to start up again – so there may be periods of low income, particularly at the outset. Where previously you may have relied on your base salary during slow periods, you will need at least six months of cash in the bank to maintain the business and your own personal costs.
AG: Lettings are generally quicker to transact and provide monthly income, although you’ll need to have built up a budget war chest to get you started with the up-front costs.
Will I miss the support network?
DC: Undoubtedly you will have a newfound appreciation for all the administrative activities that were taken care of for you previously, and that you took for granted. The are many unsung heroes in larger agencies who keep the cogs turning when the agents are out and about.
AG: Going it alone offers you the opportunity to refine and adapt the processes you have used previously used, fine tuning them to suit your way of working. Your workload will dramatically increase but you will become a master of time management as you do things your own way.
Do I really need an office?
DC: The simple answer is no, but be realistic about how effectively you can work from home. If you have children in the house, remember that the school day is over before 4pm and running your own business requires putting the hours in. The more you put in, the more you get out.
AG: Our Partnership model is based on us having offices but not shop fronts. When we set up house partnership in 2016, it was formed by the belief that people no longer buy houses from men in suits behind a shop window. They buy houses on an iPad, on the sofa on a Friday night with a glass of wine in hand.
DC: Whilst our network of Partners do not have shop fronts, we do provide them with offices. Our Partners tell us they like to have a separation between work and home life, and that it’s important for them to have a physical place of work for meetings and to engage with colleagues.
AG: When taking on an office, you have the choice of taking a fully serviced space or leasing an office via an agent. The former comes at a higher cost but with considerably less hassle and more flexibility, whereas the latter will be a cheaper monthly commitment however will require you to settle your own rates and source utilities on top of everything else you’ll have to do.
What tools will I need?
DC: The must-haves are Rightmove, Zoopla and OnTheMarket. The size and scale of these portals have made them a necessity for agents today.
AG: They don’t come cheap, though! You have to meet the monthly commitments and should treat them like a mortgage. You should also think about a marketing agency for property details, CRM or database software, photography equipment and editing software if you are going to create virtual tours.
What if I have a non-compete clause in my contract with my current employer?
DC: Agents typically have a clause precluding them from working with existing clients for a period of up to 12 months, and with a business location exclusion zone of around five miles. You should take legal advice if necessary to ensure you fully understand and respect this clause. Aside from it being the right thing to do, it’s a small world and you don’t need any enemies when you’re getting a new business off the ground.
AG: The existence of non-compete clauses is one of the major barriers to setting up on your own. We found this a challenge when forming house partnership, so have built the partnership model with this in mind. New Partners don’t buy in – we provide everything needed to run a business from a physical office to the brand, marketing and administrative support to covering Partners when they take holidays. Partners are welcomed into our network where we share contacts and leads, and we operate on a simple profit share basis.
Will I need to invest in marketing?
AG: You will need a brand, website and ideally a social media presence. As you grow you should also be considering PR support, paid advertising and forging partnerships with likeminded, local businesses that share your values and have a similar target customer.
DC: We decided to focus on building a lifestyle brand that reflected the way people now buy homes. The brand and positioning was really important to us and we tried hard to strike a balance between being professional yet unstuffy. It’s something we invest in every month to ensure we are always appealing to prospective vendors, buyers, landlords and tenants.
Should I find someone to take the plunge with me?
AG: You need to understand who you are as a person and as an operator. Do you tackle challenges head on in a decisive manner or do you prefer to share issues with peers to reach a better solution? Many people go into business with a partner, often a current or former trusted colleague, as they recognise their own shortcomings and are brave enough to plug that gap.
DC: It’s a crucial consideration. Go solo and you are totally in control of your own destiny, with no-one to answer to and nobody watching over your shoulder. That is liberating and empowering but of course it carries risks. Who will support you through a rough patch? Who do you turn to when you need an answer to a critical issue and you are not 100% confident in the matter at hand?
*house partnership was founded in 2016 by Giller and Carter, both formerly of Savills, and currently has 17 Partners covering South West London, Surrey, Sussex, Kent and Hampshire, and is actively seeking new Partners to cover complimentary areas. It offers sales, lettings and short term let services.