“How to cold start lettings & estate agency without going bust”.
I live near the City of Nottingham. Once every eight weeks or so, I have to pop into Robin Hood’s home town and whilst there, like to have a decent coffee and sticky bun. The great thing about Nottingham, especially around the Lace Market and Hockley areas, is that just about every coffee shop is truly awesome. There are no brown sludge coffee shops or indifference deli’s in this part of Maid Marian’s Old stomping ground. There is plenty of competition and awesome quality is a given in all these café / coffee shop businesses. Interestingly, a few months ago, I visited the Lace Market area, and noticed a couple more café/coffee shops seem to have opened since my last visit.
However, when I visited last week, I noted that these new coffee shops were quite empty. Stacks and stacks of white porcelain china coffee cups stood like tall soldiers on their £5,000 coffee machine with no one waiting for their mocha-locha-choca-latte and maybe three or four people sitting in an all but sparse coffee shop. You could see the baristas staring out of the window, wishfully optimistically hoping at every pedestrian walking by their coffee shop would at least pop in them and give them a try.
…and that is when it struck me the similarity between these new coffee shop start-ups and new start-up letting and estate agents. Both open up and hope passers-by will perhaps pop in and use them…. Perhaps being the operative word.
It’s only a perhaps for the coffee shop owners because these passers-by don’t have a coffee problem.
There is no reason to switch from their favourite Coffee shop, run by Dave and Lynne around the corner that’s been going for ten years, or the deli next to the Park, complete with umbrellas, warmers and woolly-blankets for freezing winter days.
….and if you think about, landlords don’t have a ‘find a tenant’ problem.
These new cafe proprietors have fallen into the ‘start building it then sell it afterwards’ trap and now they are required to invent a marketing plan to attract coffee drinkers. Starting a coffee shop, just like starting a lettings/estate agency, can’t be done on a shoestring. Both require a substantial investment up front, especially when it comes to an agency, the costs are huge in terms of shop fit costs, furniture, working capital, £900 per month
Rightmove costs, rent, rates, car leasing etc etc. you can wave goodbye to £6k to £10k a month outside London to start an agency and nearer £20k a month in London before even put food on your table at home.
Even those of you who decide to go down the hybrid route have thousands a month leaching out a month in Rightmove, website, advertising, google-adwords campaigns ..again all before having the money to pay your own rent, electricity, heating and food etc etc
Compare this glossy new empty coffee shop story to the one of another café that opened up in my home town of Grantham six months ago. They are packed …and trust me Grantham has plenty of decent cafes as well. This new café also sells fair trade coffee like the empty café’s in Nottingham, but the new Grantham café sells a story of that Fair Trade coffee to all the rich ‘yummy-mummys’. The story of the coffee is plastered on wallboards and on their Facebook page on how the coffee is made and how it helps Venezuelan families out of poverty … utter b******s if you ask me .. but the Grantham yummy-mummies love it (and you can hardly get a seat in the place)
So, what should the Nottingham coffee shop owners do now, instead of nervously looking out the window, hoping people will pop in and have a coffee? I would suggest they must start thinking less about ‘what’ they sell, and more ‘who for’.
And when I say who, I don’t mean everyone in Nottingham, just one type of person or group/cohort of people. By giving that definite type of person (or group) a reason to want to come inside and a story to believe in and most importantly share with their friends (so their friends also visit the coffee shop ..and their friends and their friends …you get the drift)
Just like every café’s freshly roasted coffee beans do not make or break a cafe in a world where great is a given… every letting agent’s ability to finds tenants for a rental property is also a given in 2017.
I believe a lot of agents open up, then start selling their services. But landlords don’t swap letting agents just because you have opened a new agency, let alone even walk through your door
Just like a coffee shop is not just a place to buy a wet brown hot drink that gives you caffeine kick and the option to buy a very pretty looking, yet quite small and overpriced cake, slice or bun ….. neither is a letting agency just a place that has window cards of properties and the ability of the people inside to find a tenant for a property.
Both are more than sum of their respective office or café furniture, tables and desks, their window cards or pictures of coffee roasting, Rightmove or Fairtrade window stickers, key cabinets or flavoured syrups, £5k coffee machines or Matterport 3D cameras.
In this new 21st century world, us humans like to spend our time, money and efforts on something that tells a narrative, a story about who we are and what matters to us.
Spending £3.20 on a Mocha-Loca-Choca coffee with Coffee beans hand-picked by vestal-virgins riding on the back of Unicorns on Mount Olympus is a story about who we are as a person. Both story we consciously and sub-consciously portray about our self as a singular human being. It shows our beliefs in our own point-of-view on life .. whether that is for community, formality, sustainability, excellence, expediency or indulgence, that we as a human buy into…. And more importantly .. share with our friends.
If you think I am talking b*******s .. let me ask you this ..
• Why do you shop at Marks and Spencer or Waitrose …. When Aldi is half the price?
• Why do you buy organic or free range, when normal stuff is the half the price?
• Why do you buy your Versace, Giorgio Armani, Calvin Klein, Dolce & Gabbana, Louis Azzaro, Jean Paul Gaultier or Yves Saint Laurent Eau De Toilette or Aftershave for £50/£100– when you can buy Brut for fiver?
• Why do choose the BMW/Merc/Audi over the Skoda?
• Why do you buy your suit from Hugo Boss for £450 and other posh labels like Armani, Prada, and Calvin Klein when Asda sell a perfectly good suit for £35?
• Why do you pay £3.20 for a Starbucks coffee when you could make one for free at home or in the office kitchen for pennies?
… because the story you tell yourself is that they are worth it. It gives you confidence, makes you feel special … and many more positive emotions beyond that.
If you are planning to open up a letting or estate agency in the coming years .. please, don’t build it first then start selling afterwards. Do it the other way round, start selling it first then open afterwards.
How would I do that? Well I am going to do a serious of videos and articles over the coming months about this very subject, called ..
“How to cold start lettings & estate agency without going bust”.
I wont be publishing them on public social media or any public forums .. instead, just dropping them on to my Youtube channel without fuss. There will be no cost, no commitment, no need to give your mobile or email address to these videos and articles.
Many people subscribe to my YouTube channel – so that might be a good idea so don’t miss any to subscribe as well? Your call! For ease .. here is a link that you can copy and paste into your browser – choice is yours
I warn you, it require you to do some foundation work before you even consider opening .. but boy oh boy, when you do open .. you will hit the ground running so fast and have people queuing out your door on day one asking to use your services .. you will wonder why you never did this a few years ago.
Setting up your own agency is really scary, putting yourself, your house, your family, your security on the line … but if you don’t mind hard-work, have patience and have the vision to make an agency you are proud to put your name to – to make a difference and make a legacy for your future .. I am happy to help in some small way in that journey.