Using employee share plans to retain key sales people and fund your exit from real estate business
Like most business owners real estate practices are particularly vulnerable to key staff leaving the business and taking with them key relationships, clients and information. Over the last month Michael Bova & I have spoken at 8 specific real estate functions on succession planning and the overwhelming feedback from attendees has been the desire to find a mechanism to engage key staff (including sharing the profits and rewards) and fund their own exit plan as part of the process.Many real estate businesses have grown well beyond the size where it is a simple and affordable for an individual to purchase that business – it is now quite common for rent rolls to exist with 500 or 1000 properties and at today’s multiples this is a sizable purchase for any individual to make. While some funding is available (for more information on some of the funding options I strongly recommend the NAB hosted seminar this Thursday morning – see further details below) the funding will never carry 100% of the purchase price nor is it good practice to carry 100% of the risk.We have had considerable success with real estate businesses before by introducing a Peak Performance Trust to attract, retain, motivate and reward key people within your business. Another interesting finding during our tour was how many businesses were looking to their property manager as the most likely successor – in fact several business owners told me not only did property managers have the character, skill set and personalities to be good business leaders but often salespeople didn’t. Now of course there are many good salespeople running good real estate businesses are doing a good job – but we do often overlook property managers in terms of our real estate business succession strategy and the message here is simple – Don’t overlook any one.Please contact us to find out more information and asked for a copy of our Succession Plus Real Estate Industry report which includes updated industry benchmarking and some commentary from our recent conversations with agents throughout Australia.