Ego: The Profit Killer
Over the last two years I have witnessed phenomena that are almost incomprehensible.
I have witnessed over three dozen Real Estate brokerages either shrink significantly or completely go out of business and the only reason that happened, was because of the ego of the Owner/Broker.
I like to think of myself as a smart businessman that makes the best business decisions at any given time. Believe me, I make my share of mistakes, as any businessman does. But I don’t let my ego get in the way of good business decisions.
Let me give you an example, if I may:
In July of 2005 I owned six Prudential franchises with 200 Realtors and while we were doing exceptionally well with $300 million a year in sales, I saw the handwriting on the wall as to what the next several years were going to bring in the Real Estate industry.
I had a large publicly traded company that had been wanting to buy me for years, so when I realized what I believe was going to happen to our industry, I chose to call that publicly traded company and tell them that I had decided to sell. My ego was not in my way. Even though I was the 800 pound Gorilla in the area, I knew that I needed to get out before the Real Estate market collapsed.
The local Realtors and Brokers thought that I was a genius for selling at the very peak of the market, but that wasn’t the case. I knew that I wanted a healthy financial situation personally over being the Real Estate man in the area.
At the time, I was writing a weekly Real Estate column for the local newspaper and I had a weekly Real Estate radio show. Those all went away when I sold. The company that bought me required me to quit the articles and radio show. But guess what? I didn’t care. I sold at the right time!
That short history brings me to the point of why I’m writing this article.
When I first started my current company, I started calling dozens and dozens of companies that had between 100 Realtors and a 1,000 + Realtors to see if they would sell to me or merge with me. Everyone one of them laughed at me because I was a nobody or because they were so much bigger that they couldn’t bother with me.
Now two years later, a few of those 1,000 Realtor companies are completely gone, bankrupt: have gone “caput”. All of the other companies have shrunk dramatically and now everyone one of the companies that I’ve called are smaller than we are.
I had offered everyone one of these companies more than they ever would have seen from any other company, but their egos wouldn’t allow them to make a change. Two companies in particular bother me. One was a 1,000 Realtor company and I spoke with the owner on several occasions. He kept telling me, pay me $17 million and I’ll sell. I offered him a proposal that would have made him millions over 7 years but he just kept blowing me off. In their bankruptcy and liquidation they had $2 million in debt. They no longer exist.
The other company had 450 Realtors. I made them a very similar proposal. They now have 125 Realtors, are in serious debt and the talk in their town is that they will cease to exist in a matter of months.
This didn’t need to happen to either company. The egos of the Broker/Owner caused their demise. Maybe I look at things differently than most Brokers. I feel I have an obligation to do the very best that I can do for my Realtors.
I’m one of those people that if I won $100 million in the lottery, I couldn’t just walk away and leave my Realtors to fend for themselves. It just wouldn’t seem right to me.
So if I can offer any advice to all the struggling Real Estate brokerages out there, this would be my advice. Swallow your ego and if another company makes you an offer to help, even if your name isn’t plastered in large neon lights, and you don’t get the inflated price that your ego tells you the company is worth, take the offer rather than losing everything.
James A. Crumbaugh III is CEO of Allison James Estates and Homes the National Internet Based Real Estate Brokerage and can be reached at www.AllisonJamesInc.com. To learn more about the Virtual Culture and Allison James Estates and Homes please go to our web site at www.AllisonJamesInc.com or email me at email@example.com.
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