Look! We've Shrunk the Office

At 2,800 square feet, the ERA--Teachers Inc.'s office is smaller than some of the houses being sold by its 85 sales associates. The size is just right for a company most of whose sales associates work out of their home offices.

A 1,500-square-foot countertop desk area contains phones, computers, and swivel chairs. Three conference rooms are available for meetings.

The brokers communicate with associates through an extensive voice mail and paging system, weekly voice mail bulletins, newsletters, regular meetings, and occasional seminars.

Brokers Lonnie Stock and Bob Comerford founded the Herndon, Va., office seven years ago with a vision of low overhead for home-based sales associates who would earn higher commissions in exchange for reduced central office space. Their first office had 870 square feet and 65 salespeople.

''We felt there were associates out in the marketplace who were independent enough that they didn't need to go to an office all the time,'' Stock says. ''That's how I operated as a salesperson. If I had six transactions going, I needed a briefcase with six file folders in it.''

An Innovative Blend

The two men, former teachers, had had experience with a small company, a large independent, and a 100 percent commission franchise office, Stock explains. ''We blended those three concepts.''

Unlike other 100 percent commission companies, there's no flat desk fee, Stock says. ''Our fee is based on the transactions you do.''

About 85 percent of the business comes from referrals, Stock says. ''We're a 'sphere of influence' marketing company. We do very little advertising in the newspaper.

''We're a very profitable company right now. We want to reinvest in two ways: growth and the current people who are with us. Every year we find ways to lower their costs.''

According to Stock, volume is up about 19 percent over last year with about the same number of salespeople and no acquisitions of other companies. ''We're doing about 400 contracts a year,'' he says.

For a handful of practitioners preferring to work from a central office, ERA--Teachers provides a desk or office in exchange for a guarantee of a certain amount of money each year, he says. The guarantee is not a flat fee but rather is based on the amount of money they earn. ''You can be on any plan you want, and you can switch to any one you want,'' he says, but you must make a year's commitment before changing.

One drawback to keeping central office space small is lack of visibility, Stock says, citing recent surveys showing that 20 percent to 25 percent of associates look for highly visible office space. Within the next two years, ERA--Teachers plans to relocate to more visible space, but it doesn't plan a major increase in square footage.