In October 2007, he laid out for his family—which included two sisters and his brother’s widow—a plan to find an executive-level manager. A search firm narrowed the choices to four finalists before the Halters selected Stephen Edgerton, who had spent 11 years as a project executive with IBM Global Services.
Edgerton was already living in South Carolina, to which he relocated from Arizona a few years earlier. He officially joined the brokerage as its COO in February 2008, and almost immediately noticed that it needed operational structure and cost control. Edgerton closed facilities and reduced personnel in his first few years, and then started reinvesting in the business: Between 2010 and 2013, he opened four real estate “galleries” that all of the company’s agents can use, regardless of their territories. Since 2008, the company has also rolled out five commission plans. And he’s brought on the company’s first CFO and a marketing person who is now its Chief Experience Officer.
“We threw a monkey wrench into a machine that needed fixing, and Stephen has been driving the company like a nail,” says the 56-year-old Brad Halter. Edgerton, 45, says running a brokerage isn’t all that different from what he was doing with IBM. “It’s about delivering services to our clients and executing the program.”
Assumption No. 3
I can keep the business in the family.
Frank Halter, who died on January 29, 2013 at age 83, was fortunate to have son Brad to fall back on. Family ties remain the lifeblood of many brokerages. Schlott says he recently attended an industry conference where a session on succession planning had second and third generations on stage and their parents and grandparents in the audience.
But relying on familial transfusions to keep a business going has long odds. The Family Business Institute reported in 2012 that only 30 percent of family businesses make it to the second generation, and only 12 percent to the third. Slusser says her son, whom she had been grooming to take over, decided he wasn’t interested in buying the company. “Just as I wasn’t interested in taking over my parents’ when I was starting out,” she recounts.
Brokers’ inclinations to postpone retirement indefinitely might also be a disincentive for their kids or younger relatives to hang around for their chance in the spotlight.
Alain Pinel REALTORS® appears to have come up with a creative solution to this dilemma: Over the last decade, Paul Hulme has been selling his business to his three sons and daughter—Michael, who is the company’s director of corporate operations; Russell, the company’s finance director; Allen, who’s involved in one of the family’s other businesses; and Gina.
Michael Hulme, 38, points out new sales offices have been opened under the ownership of him and his siblings. But ownership remains “behind the scenes” and seamless to clients because the offices all operate under the same corporate brand.
“The transition has been more of a process than a date in time,” says Michael. And he’s comfortable with his father’s still-active role in the firm. “This is what he likes to do. He’s not a golfer. And he enjoys being with his family.”
John Caulfield is a freelance business journalist and former senior editor with Builder magazine.