How a real estate business merger can unlock new horizons
Category General News
When it comes to growing your business, expanding into other territories isn't your only option. Instead, partnering up with a recognised brand like Century 21 can open doors to new opportunities you hadn't even considered. That's the word from Eva August, our National Operations Manager and Head of Business. She says when setting up a path for your business, the team in black and gold can be your ticket to success.
Now's the time to join forces
At present, market factors are making mergers an attractive option for forward-thinking real estate businesses. "It's a challenging time for real estate," acknowledges August. "Since mid-2022, the current trend is a compressed market, lower inventory than before, and higher interest rates."
However, a merger has the potential to help overcome this. "A merger allows a firm to spread/share risk and share in financial commitments," says August. "This diversification strategy can help them weather market downturns more effectively. We come together to share the load, the cost, and the reward. There is a lot of leverage here. Firms that marry can do more together, ultimately positioning themselves to thrive in the evolving real estate landscape."
Share your goals, amplify your returns
In spite of market conditions, August believes merging can be a winning solution. She highlights the benefits she's seen real estate businesses gain when they unite with an established brand like Century 21:
- Leverage economies of scale: Century 21's buying power helps you manage costs. For example, the brand can negotiate lower rates on marketing and technology following a merger.
- Have more market share: With a tried-and-tested blueprint, Century 21 can help your real estate business achieve more in your area and grow your operations.
- Diversify your portfolio: Century 21 can help you expand your service offering and even access new markets. Added marketing expertise, sales guidance, and training can help you improve your operations and compete more effectively.
- Acquire the best talent: Get help to recruit, train, and retain top practitioners with world-class training and an awards programme.
- Enhance your network: Century 21's global footprint exposes your properties to the world for potential foreign sales.
- Get brand recognition: As the most recognised brand in real estate, this gives you a distinct advantage when competing for sales, talent, or expanding or selling your business.
- Use the latest training and tech: Century 21 University's award-winning programmes offer the most respected practitioner training in the industry. The brand's achievements are built on using cutting-edge tools to cater to client needs. For example, Century 21 South Africa recently launched Century 21 Auctions for traditional live and online property auctioneering.
"This being said, we are not looking to merge with just any operation," says August. "We want to partner with those that are clear on using real estate and leadership to create wealth, legacy, and continuity. Our leaders are elite and the right fit is the entrepreneur who shares the same values and ambition. It is a select few that are courageous enough to do this and allow us to help them."
The proof's in the pudding
Those who do merge or start a real estate franchise with the brand are seeing the difference. So much so that Century 21 was named a 'Top Franchise for 2023' by Franchise Business Review. August is proud of this fact and says, "we continue to have successful mergers around the world, where mergers on an office/region level are facilitated."
Although a relatively new pathway in South Africa, she says the merger model is proven to work. "One merger I loved was that of Century 21 and a local competitor in a region. These two businesses combined 80 years of real estate success and found an opportunity to merge two respected offices. The focus of the merger was on expanding to a heightened level of service to its clients."
Tips for a smooth real estate merger
While every merger is different, August offers some tried-and-tested advice to help those considering it:
- Be clear on your vision: "As a possible mergee, get clarity on what you want for your business and its people. Do you want intrinsic value for your business? A business identity that has continuity? A greater reach and more revenue streams? Or to hand over to a big brother offering retirement options?" says August.
- Investigate your options: "The first place to start is to build a relationship with the people in the companies you would consider a partnership with. Culture is the most important 'fit' to make. Culture is to merging as a product is to marketing," emphasises August.
- Focus on your end result: "In your journey, look at what you'll achieve and the benefits it brings. There will be compromises, and these compromises make a lot of noise, but one will find more benefits that serve all. This would be uncovered in the entire process of engagement with Century 21," notes August.
Ready to merge? Here's how
The first step is to connect with Century 21 South Africa's head office by filling out your details on the Franchise Opportunities page - a representative will get in touch ASAP to answer your questions about the process.
"You can compare mergers to marriages," says August. "The journey continues with a relationship and needs analysis. This allows all parties to determine if the merger could benefit all or not be the right fit. This exploration has a detailed process that is unique to Century 21."
There are also different merger options. "We would explore branch-to-branch mergers for the new partner in their region. The second possibility is a group merger or acquisition," says August.
Author: Century 21 South Africa
