Do you know your minimum team size?
Fast Value: Running a team is running a business. A lot of business is math. When you’re growing your team, it’s valuable to know where you need to be for the business model to make sense. Get there as soon as possible.
Most team leaders guess at how big of a team they want to grow.
Don’t be that leader.
You should know exactly how many agents your team needs from day one.
The path to get there is easier once you know where you’re going.
Let’s walk through how to find your minimum team size.
Pro-Tip: Also, it’s important to know that your team (your business) doesn’t make sense until you reach this size. From then, it will START to make sense.
I’ll share the simple process to figure it out. I’ll give real examples and benchmarks as well.
First, here are some benchmarks…
Regardless of your price or market, an agent will bring ON AVERAGE roughly $80k in GCI per year. (This runs true through all the financial models)
This factors in the agents that crush and the agents that do absolutely nothing. Remember, it’s an average.
Pro-Tip: If you have a small team (less than 20 agents), don’t run this based on your current agent average. You will likely skew way too high. Just trust me here.
So let’s say that you want your team (your business) to profit $500k per year, and you’re running a traditional team. Your Profit Margin goal is 25%.
That means we need to take Profit Goal divided by Profit Margin Goal.
($500,000 / 25% = $2m in GCI or revenue)
Got it. Now… we can find out how many agents it’s going to take us to get to $2m in revenue.
Remember, an agent will bring in ON AVERAGE $80k in Revenue (GCI) per year.
So we take Revenue Goal divided by Revenue per Agent
($2,000,000 / $80,000 = 25 Agents)
The best part about doing this exercise is that it takes your production completely out of the picture.
This is the only way to do it if you want to get out of production.
But if you want to stay in production, this will ensure that your team is profitable by itself. No more feeding your personal production to keep your team afloat.
They’re more like two separate businesses. You want your team to make sense as it’s own business; that way you can crank profit on your personal production.
So…
No more guessing at your minimum or ideal team size.
No more saying that you want a “small team” because you don’t want to manage a bunch of people.
But I can hear you thinking… can’t I just get my agents to be more productive so I don’t need as many?
Sure.
You could also just double your price point and make twice as much money.
What do those have in common? They sound great in theory but are nearly impossible to do in practice.
Why not just build a team that makes sense and makes money?
I vote for that.