Success Begins with Your Business Plan
Did you know that, according to the NAR, 87% of all new agents fail within five years? While there are myriad reasons to account for the success of the remaining 13%, a common thread among them is a focus on business planning.
Does having a written business plan ensure success? Not for everyone, but, to be sure, business plans are fairly good predictors of success. It’s estimated that having a business plan results in more than 30% faster growth, compared to businesses that simply wing it. Yes, there are successful real estate agents who get by without a plan, but they are the exceptions instead of the rule. But the bulk of agents prefer to not waste time or energy working on a business plan. Yet, as we all know, real estate can be unpredictable, and your business might not always run like a well-oiled machine. That’s why it helps to have a business plan, mostly to help YOU hold yourself accountable. As we’ve said before in this post, the numbers don’t lie, which is why top performers lean on a solid business plan as their roadmap to success.
If you’ve never written a business plan before (or have, and need a refresher), here are some questions you’ll want to consider as the framework for your plan:
What is your mission? Why did you get into this business? What excites you, gets you out of bed each morning? And, if you aren’t motivated upon waking, that’s something you need to look at more carefully. A little, honest, self-reflection is always healthy.
Have you done a SWOT analysis? It’s important to periodically, and honestly, review your strengths and weaknesses. In fact, if your list of strengths is considerably longer than your weaknesses, it’s possible you’re being a little less than honest? What opportunities are there to expand your revenue, such as, perhaps, focusing on being a neighborhood expert? Finally, are there realistic threats on the horizon that you need to consider?
What are your specific business goals? Specific is the operative word here. The best real estate business plan drill down deep to define actionable, measurable goals, such as
- Transactions and/or revenue over the next 12 months
- Understanding the average commission per transaction in your MLS
- How many listings do you need to reach your goal?
- How many listing presentations will yield a single listing?
- How many prospecting calls will you need to make to get one listing presentation?
- How many calls will you need to make to reach/talk to one prospect?
- How many hours do you need to prospect each day to reach your call/engagement goal?
What strategies will you employ to reach your business goal? Knowing who you are (with the help of your SWOT analysis), what strategy or combination of strategies are most likely to get you to your business goals?
- Prospecting expired listings
- Prospecting FSBOs
- Blending expired and FSBO listings
- Identify yourself as a neighborhood expert
- Working your sphere of influence
- Focusing on the luxury/high-end market
Do you have a handle on your expenses? Your goal as a business owner is to turn a profit at the end of the year, which means you’ll need to be obsessive about staying on top of your expenses:
- Personal expenses: Housing, vehicles, health insurance, utilities, education, entertainment.
- Business expenses: Vehicle, phone, office space, business taxes, website hosting, etc.
- Start-up: If you’re relatively new to real estate, you’ll have to consider basic start-up costs, such as website development, licensing fees, business cards and on-boarding fees to a brokerage.
What are you willing to invest in your future success? Top performers know that it is critical to invest in their future success. In that regard, they know there is a huge difference between looking at something as a line-item expense (which can be easily cut) and a long-term career/business investment. Perhaps, when developing your plan, you put 10% of your projected, annual gross revenue to any or a combination of the following:
- Using a proven, Customer Relationship Management (CRM) program, such as Espresso Agent. Espresso delivers the best expired and FSBO leads delivered to your desktop every morning. Learn more about Espresso Agent’s features HERE.
- Work with a professional coach, who helps to keep you focused and accountable.
- Attend industry seminars and workshops. Whether virtual (in the time of COVID) or in-person, workshops and conferences allow you to connect with other real estate professionals, while expanding your understanding of the industry.
- Build your personal brand: Always remind yourself that you are a BRAND! So, whether you work with a branding expert or choose to be your own brand strategist, the better you are at defining your brand, the more effective you’ll be at creating a competitive point of difference in your area.
We want to close this post by stressing a very important point: make sure you review (and absorb) your business plan on a daily basis (if not more frequently). Many small businesses write a plan so they can check it off their to-do list. But they may only look at it occasionally, if at all. Keep your plan in a convenient place on your desk. That way, you’ll be reminded to look at it every day, as a reminder of your goals, and the plan you’ve set in place to help you achieve those goals.
If you’ve never written a business plan (or haven’t in some time), now is the perfect time to start. A plan serves as your guide to success, and helps to define who you are as a real estate professional.
Good luck in 2021.