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It is no secret that Australia’s property market is almost as diverse as the 24 million people who call this country home.
According to NAB’s winter housing report for 2015, Sydney’s house prices increased by 14.5 per cent over the past year, while Melbourne recorded 6.9 per cent growth and Brisbane, Adelaide, Perth, Hobart and Canberra saw a range of growth between 2.2 per cent and 0.3 per cent. Darwin’s home values fell 1.6 per cent.
Brokers should see an opportunity in a diverse market to look beyond their local area, reach different clientele and ultimately grow their business.
In my last blog, I discussed how exploring new competitive arenas is step one of McKinsey & Co’s “Staircases to Growth”. In this blog, I will explore the second step – expansion into new geographies.
There are two key ways you can expand into new geographies – both with physical business expansion and by expanding your industry knowledge beyond your local sphere.
Physical geographical expansion is the most obvious way to fulfil this step. Franchising your business and opening offices in new locations will allow you to reach new clientele and take advantage of favourable property markets in different parts of Australia, as well as hedge your business against local downturns. This is, of course, easier said than done, and perhaps some smaller brokerages may consider this daunting or out of reach.
If this is not viable for your business now, it may be something you can work towards as a long-term goal. Start down the path towards franchising by growing your customers in neighbouring localities. Go the extra mile, literally, and visit customers who are outside of your usual area. By doing this, you will familiarise yourself with new areas and generate referral opportunities that can be harnessed when you are ready to expand.
Expanding your industry knowledge beyond your local sphere is the second way you can fulfil this step. Before you are ready to put pen to paper and purchase a new office in a new area, you can choose the locality in which you wish to set up shop and focus on becoming an expert on this area.
Building your local knowledge and expertise will be key to your success in your new location – and there is no need to wait until the doors of your new brokerage open. Avidly consume property news, regular reports and keep abreast of how regulatory change is affecting different areas across Australia.
On a more local level, you can chat to local real estate agents, attend open houses and review weekly auction results.
One of a broker’s strengths is that they often become a trusted adviser, with local expertise. The more you learn, the more capacity you will have to help a wider range of customers – which can only lead to business growth.
Expanding into new locations is an important step for growth-oriented businesses, but even smaller businesses can take simple steps to reach new clients outside of their traditional comfort zone.
In my next blog, I will discuss acquisition and consolidation and how these can be used to unlock growth potential.
Phil Quin-Conroy
Phil Quin-Conroy was appointed as chief executive of PLAN Australia in May 2013. Previously, Phil spent three years leading the broker services and operations department, responsible for the delivery of key business initiatives for the Advantedge group. During this time, he oversaw and was accountable for the implementation of Podium, NCCP and onboarding projects.
Phil has more than 20 years’ experience in the financial services industry, of which the last eight have been spent working closely with mortgage brokers. Previously, he led the insurance and licensee services department at MLC. He has a passion for working with entrepreneurial, self-employed business owners and is able to draw on a global perspective, gained from time working in Australia, Asia and the UK.
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