We spoke to Chad Dannecker, owner of Dannecker & Associates, about his experiences in creating a profitable business in the highly competitive real estate industry. As an entrepreneur, he has consistently increased his revenues year over year and now runs a million-dollar brokerage operation in the heart of San Diego. He began his career in the mortgage industry, opening his first company shortly after graduating from college. Five years later he sold that company, and in 2008 founded Dannecker & Associates.
1. Creating your own niche is key to survival and growth when competing in a highly competitive field.
- How would you describe your business niche?
“We’re focused on real estate in Downtown San Diego; our goal is to avoid getting in the car, if I have something that takes me out of Downtown, I’m leaving opportunities on the table. Instead of getting distracted with property in La Jolla, that’s short of $2 million, I will refer it to somebody else, getting 25%, and then focus all of my time, energy and efforts here in 92101.”
- What ways have you found to differentiate yourself in such a crowded market?
“I’d say the number one thing is focus. I see many realtors in the area jump at the chance for a property in Chula Vista but we tell those clients that the area is not our focus and refer them to somebody who’s down there. We stay focused on our goals and objectives; we sit down, put a plan together and stick to it, which is what differentiates us. Most companies might have goals they look at once a quarter or once a year but we look at them everyday; we have accountability partners keeping us on track with what we’re trying to accomplish. With accountability, you get things done.”
- How does creating this niche lead to larger revenues and profits?
“What ends up happening is once you stay focused for a few years and you create a buzz around that focus, meaning that you have successfully helped out a lot of people accomplish their goals with your expertise, people start seeking you out. The amount of business and referrals that just fall in your lap, versus having to work for it every time, changes dramatically.”
2. Control your own destiny and do not allow the market to determine your success.
- How did you define your own destiny when the markets have been so rough the last several years?
“We went through some change; I sold the mortgage company. I used to be a sales manager, running all the news sales projects in Downtown San Diego, and we also saw that wasn’t going continue in the future. We had to react and think strategically about what was next for us. There’s always a need for houses; therefore, we created the realtor company and as part of that we created property management to insure a large, slow recurring revenue. We don’t leave Downtown for our property management; it’s tight, focused, easy for us to manage and possible.”
- What entrepreneurial best practices can you share around this topic of controlling your own destiny?
“To any degree, there are things that are controllable and things that are not. Controlling your destiny is about taking in all of the research you can, for the area that you’re in; making the best decisions regarding strategy, at that given time, with all the information you have in hand; creating a plan around it, and then executing. A lot of people just react; they start working on projects but they don’t have a road map, they don’t know where they’re going and they’re not checking in to make sure that they’re at the next point along the way to the overall goal and vision.”
- What do you believe is the difference between people who make it and people who don’t, when the market plays such a big factor in revenue?
“A lot of it is vision or being able to be flexible and change your business strategy on the fly; part of it is also tenacity and leadership. I think a lot of salespeople are never going to be more than salespeople; therefore, it’s all about the leadership and what the leadership can do for everybody in the organization. At the end of the day, all these employees who make three or four hundred thousand being salespeople, they still look to you to be the leader when things are going wrong; they know how to sell but if there’s nothing selling, they’re looking to you. You really have to evaluate what's going on, take in all the information you can, all the research in the market and then put forth a new strategy knowing everything you could possibly know at that point in time; then try to set your vision up. Along the way you should be checking in with how things are going: Are you hitting your goals? Is the market reacting? Is everything happening that you want to happen? Then, you have to be agile and shift accordingly.”
- How do you adapt to switching your strategy so quickly?
“Here’s prime example: 10 years ago I had never done a short sale but I had run a mortgage company with a processing department where we had 10 full-time processors employed. We started looking at what a short sale actually meant and realized it’s when somebody’s upside down on their mortgage; essentially, we had to reverse process a loan. We then created another processing center for short sales, we were even creating revenue from other officers and agents because they didn't know what do for a short sale. It’s just seeing what trends are happening in real estate, or any business, and finding the need. It’s always about the need, if you can find a need and create a solution for it, and do it well, then there you go; you just created a revenue source.”
3. Being connected to the right people and organizations creates the fuel that drives success.
- How does being connected to the right people and organizations play a factor in your success?
“You have to align yourself with the right people but it’s really about who you are and what people see in you. If you’re passionate about what you do and you’re kind of an ambassador for what you do in your niche, then when you align with the right people, they see the type of person you are, they see how diligent you are, they see your tenacity and they would refer anybody to you. You also have to go into a business relationship with a sense of giving; for example, I’m part of about 20 different organizations Downtown and I don’t go into those organizations wondering what I can get out of it. I try to find the key people and then I try to refer business to them, as well as getting to know them. You do business with people you know, like, and trust; therefore, once you get to know somebody, you start referring them business and then they start to feel compelled to refer you business back.”
- What are your best practices around being connected in your community?
“For me, it’s really about personal management; who do I want to be involved with in the community? It’s really about figuring out the key players that I want to get involved with and strategically finding ways to get in contact with them but not making it all about me. I try to make it about something we have in common; for example, if we both have a loved one who has been diagnosed with M.S., we can go out together to support and fundraise for it. It’s making it about something greater than yourself and through those interactions you get to know someone really well, you connect on that level, and it’s not just straight business all the time. When you go in with the “gimmie, gimmie” attitude, you don’t come off right; its not a genuine attribute and you can’t build trust on that preface.”
- How do you leverage your contacts to create revenue in a systematic and controllable way?
“In terms of our clients, our core values are ‘people first’, ‘do the right thing’ and ‘fun and laughter’. We try to take those values and connect our people to them. For example, I know two new people that are opening restaurants in the area; we’ll invite our entire client database out to those new restaurants, we’re going to help the new business owner promote their new restaurant, we’re going to have our clients out, we’re going to buy the first round of drinks and just try to get good people together and enjoy life. The whole idea of doing business all comes down to relationships; if you can find ways to create good connections with people, you’ll have good business.”
- How do you balance sales and relationship building in the process so that people feel you are acting in their best interest?
“Like I said, one of our core values is ‘people first’ and when you align everything in your company around your core values, and one of your core values is people first, you’re addressing that in everything you do. When there’s a tough question that you’re faced with or you’re in a fork in the road, go back to your core values and say, ‘alright, people first, what is in the person’s best interest?’ When you do that consistently, people see it and they really appreciate it because it’s not always about me, me, me, it’s about what’s going to work in your client’s best interest. One of the nice things for us, as an organization, is that we do enough business consistently that we’re never desperate; when you’re desperate, you make bad decisions. We always tell people, ‘when you’re ready, we’re ready’; timing is everything in real estate. It doesn’t matter if you pay $100,000 more the next year if the timing wasn't right, even though, financially, $100,000 less is better. Timing is everything and it’s about their timing, not ours.”
- Any last minute gems you would like to share with other CEOs and business owners?
“One of the things that I’ve learned, and am still constantly learning, is to not get too busy. You have to take the time to think everything through before you start implementing or you’re going to waste a lot time. Furthermore, you’re going to lose some good employees along the way because you weren’t a good leader and every employee ultimately wants good leadership. Therefore, if you can be a good leader, you will attract the right key players and retain them. ‘A players’ are attracted to ‘A players’; if you’re an A+ leader and you attract ‘A people’, they’re all going to want to stay. When you start bringing the C’s in, the A’s aren't going to like it and things will unravel. Be strategic and thoughtful about everything, and be very aware of what’s going on around you.”