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% over the past year – while Melbourne recorded 6.9% growth and Brisbane, Adelaide, Perth, Hobart and Canberra saw a range of growth between 2.2% and 0.3%. Darwin’s home values fell 1.6%.
In our last blog, we discussed how exploring new competitive arenas is ‘step one’ of McKinsey & Co’s ‘Staircase to Growth’. In this blog, we will explore the second step – ‘expansion into new geographies’.
If you want to know more about the saircases to growth, read: “How to grow your business: the art of business growth in seven simple steps”
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.
Business growth is not like a light switch and 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 our next blog, we will discuss acquisition and consolidation and how these can be used to unlock growth potential.