For Adam Hergenrother, expansion has led to major success. He and his team of more than 300 agents across 40 locations have closed nearly 2,000 units through July, putting them on track to hit 4,000 by year end. That’s up from 2,600 last year. The team expects to be at $30 million in GCI, up from $17 million the year prior.
Hergenrother’s secret is smart expansion, or as he likes to say, growing a team without borders. It all started a decade ago in South Burlington, Vermont. Hergenrother needed to grow his business, but had done all he could in his own area. At the time, though, he didn’t have the resources to start a second, separate team elsewhere in Vermont.
So, in 2011 he expanded to Maine, duplicating his team’s models and systems through a joint venture structure, linking up with an already high-producing, high-performing team. “We took a $4 million producer and made them a $60 million producer in a very short period of time,” he says. “Then, we started upping it.”
Now, the threshold to partner with Hergenrother is well into the double digits. He turns a $30 million producer into a $60 million one. Many of the expansion techniques and tips that have helped to fuel Hergenrother’s thriving business will be laid out in Keller Williams’ Expansion Systems Orientation (ESO) course on December 8, live at the KWRI headquarters in Austin, Texas.Register Today
For Hergenrother, the income potential of expansion has been one of the biggest benefits. In prior years, he watched friends start separate businesses like gyms or restaurants in order to grow their wealth. But they all failed or moved on.
With expansion, however, opportunities are endless. “You’re no longer constrained to a certain market size or a certain leadership level,” he says. “ You can stay with one business and that becomes your opportunity for life.”
But it’s not just about the financial benefits. Expansion has fundamentally changed Hergenrother for the better as a person, he says. Leading a large team with its variety of personalities and personal life experiences has made him more empathetic.
“It’s allowed me to become a better human being,” he says. “It’s given me the gift of being able to feel deeply and understand what people are going through, yet at the same time navigate clearly through it by making the best quality decisions I can for the organization. You’re really having an impact on people’s lives.”
The KW Expansion Network
The KW Expansion Network (KWEN) supports the business operations of U.S.-based KW real estate expansion teams – teams that have chosen to expand beyond their local market to a new location. The network offers a simplified, standardized compensation plan and efficient and cohesive operational structure.
A major plus of the KW Expansion Network is that it simplifies and streamlines a variety of processes, freeing up agents’ valuable time and resources.
For example, a Texas team with an expansion network in cities including Austin, San Jose, Houston, and Dallas that’s associated with several market centers only has to create one marketing profile as opposed to multiple ones.
“It gives you simplicity,” Hergenrother says, “and that makes things so much easier.”
Agents also benefit with the expansion network because they’re on a more manageable, competitive expansion cap structure. “You can build budgets around it, because it’s not changing,” he says.
Hergenrother believes the KWEN will change the economics of large expansion teams for the better. “It is a great benefit,” he says.
An Entrepreneurial Mindset
Anyone looking to become successful with expansion has to be an entrepreneur already thriving at leading a team, Hergenrother says. But they also have to be bored, and many times have people from within their team nudging them to grow.
What does the ideal expansion-prone candidate look like? According to Hergenrother, it’s someone who is mostly out of buyer production, dabbling with listings and wanting to add more to their plate. “You should be making somewhere around $100,000 net profit or more and have the bandwidth to grow,” he shares.
It’s also crucial to realize mistakes will happen and be prepared for that, Hergenrother says. Moving from three to 10 locations will just be messy at times, he says.
“You’re not going to succeed right away,” he says. “You will succeed, but you will have a lot of failures along the way.” Use failures to grow from, he adds.
Having a mindset of long-term growth and a never-give-up attitude is key too. To expand, you need to be in it for the long run and not just for short-term benefit. “That will stop you in your tracks,” he says. “You have to be willing to break your systems and then rebuild them,” if they’re not working as is.
For Hergenrother, it all comes back to learning and education. Get up to speed on expansion now, he says, so that when your time comes you’ll be fully prepared.
“Take the KW course,” Hergenrother says. “The best thing people can do is educate themselves on what expansion is. One day, you may just wake up and know – it’s go time – and you’ll have so much knowledge that you’ll be able to speed ahead much faster.”