As an avid follower of Property Industry Eye, it seems that every day brings its new challenge to estate agency.
I speak with business owners across the country, and whilst we agree that the news doesn’t look pretty, for most this doesn’t match their experiences or indeed mine.
During the past month we have seen the country’s largest high street estate agency’s share price hit an all-time low of less than 6p.
Or to put that into context, 25% of the cost of a finger of fudge.
Many of the great names in estate agency are closing offices in a bid to reduce costs, and the suggestion is we’re likely to see 2,500 offices close their doors for the last time this year.
This contraction of the high street doesn’t seem to be an off-line/online thing: this is not about Woolworth being wiped out by Amazon.
In the past 12 months we’ve said goodbye to eMoov, Hatched and House Network.
Others have reduced headcount whilst the number one, Purplebricks, has also felt significant pressure on share value, although this appears unrelated to its UK activities.
I suspect that the high street contraction is more to do to with the market itself. Overall property transactions have declined, with the Land Registry reporting a run rate of 900,000 for the last year, down 5% year on year.
Contrast that with over 1.6m prior to the last economic downturn, and today’s volumes are predicted to be broadly in line with 2011-12.
The rental sector appears to remain broadly flat having grown 160% in the past decade to over 4.5m households.
What is surprising is that whist things do indeed look tough, the demand for talent remains strong.
In the first four months of this year on average 2,700 jobs were advertised each month in estate agency on Reed.co.uk, one of the country’s foremost jobs boards.
Meanwhile the country is currently experiencing its lowest level of unemployment in 45 years at 3.8%, nearly half of what it was just 7½ years ago.
Where are we seeing the big demand? I have witnessed significant growth in franchises and alternative business models, or to put it another way, businesses which give talented people the opportunity to do it for themselves.
Be in no doubt that today more individuals are weighing up the pros and cons of self-employment and coming to the conclusion that they would rather control their own destiny.
Sadly the bad news stories underline that, as with most other industries, the days of long-term job security with an employer are now be numbered.
The loyalty of talent appears to have little value in the reality of a world dominated by economics.
I’ve heard it said that some people don’t have the ‘X factor’ to be an entrepreneur.
This hasn’t been my experience.
I believe entrepreneurship is a skill: just as you’d study to become a doctor or engineer, so you can to become an entrepreneur.
For most it’s the perceived lack of opportunity for practical application or support that hampers them.
Then again, why would an employer foster their own talents’ entrepreneurial ability when the natural outcome will be for the talent to leave and do it for themselves?
And here’s the thing: the foundation stones of today’s estate agency were laid by entrepreneurial talent.
Estate agency has evolved hugely, particularly over the past 40 years, but for many, the entrepreneurial spirit and the desire to control your own destiny burn as strongly as ever.
* Joshua Rayner is founder of specialist recruiter Rayner Personnel
Comments (5)
I agree Josh. If someone has the talent to win business, and the knowledge and skill to get the results clients need, why waste that talent and skill on an employer when you can keep it to yourself and have the flexibility of being your own boss.
There’s never been a time that startup overheads were lower than now. I encourage anyone with the confidence in their ability to go it alone. Yes, it’s a huge challenge, many will fail, but many will succeed too, and have a better quality of life as a result.
I would agree, in part, that you can teach entrepreneurial skills but I’d challenge that the real entrepreneurial spirit needs to be within someone.
Some of the more recent “tech” entrepreneurs have lost an element that is right at the very heart of entrepreneurship which is creating a business and taking financial risks in the hope of making a profit, but with their own cash. Yes they may have been taking a financial risk, but with other people’s money, the real entrepreneurs have their own money at risk and make decisions based on this rather than an over inflated investment rounds which gets consumed by development sprint after development sprint or by huge marketing spends.
A true entrepreneur is eking out every opportunity from a limited budget, growing their business with effective networking and a sound product or service built on a quality proposition whilst preserving their equity so that their endeavour is rewarded and not lost with dilution after dilution to early in the process, fortune favours the brave!
I am old enough and grumpy enough to make the observation that too many young people are clueless about what it takes to make a success of a business. There’s nothing wrong with an ‘I want it all and I want it now’ attitude if that is backed up with sound business foundations and a recognition that strength and long term success lies in profit, not turnover or some vanity ‘valuation’. Too many people are too short-termist in their thinking.
I’d agree, it’s not about revenue or profit, that’s important, but if you don’t have a sound proposition behind you then it’s an unsustainable business, as we’ve seen all too often.
What this story misses is that entrepreneurs need finance to start up …. the consumer is now bombarded with cheap, cheap, sales, sales everywhere you look (has the DFS sale ended yet!). So how does a entrepreneur even get off the ground when the public are now offered the so called Amazon style and cut prices. Unless they get crowd funding, any talent that is out there has limited opportunity and those that have managed to gain the funds have wasted and failed miserably, probably ruined it for real entrepreneurs.