Crafting a business plan is one of the first steps that any smart entrepreneur takes when they first decide to go into business for themselves. While real estate agents fall into the entrepreneur category, there are many agents out there that don’t take the time to formulate a solid business plan. It is a time consuming process, and one that requires difficult decision making and goal setting. It can seem tedious to an agent who would rather be out in the field, generating leads.
In the real estate industry, changes occur all the time, with a bustling housing market one year and a slump the next. What is the point of having a business plan in such an unpredictable industry like real estate?
Planning is the key to any good business, and real estate is no exception. You need to figure out what you want to achieve and then formulate a plan to get there.
To start, experts recommend coming up with a wish list for your business. How much would you like to make over the next few years? Be realistic, yet optimistic. You don’t want to set your sights too high and feel like a failure, or set them too low and not realize your full potential.
Once you have your income goals and a time line set, you need to decide which tasks you will undertake to achieve those goals. Where will you place your energies and resources? Generating internet leads, or meeting people locally? Figure out how many clients you will need to have during an average year to meet your meet your needs. Then you need to your calculate all of your fixed and variable expenses, which is hard for many agents to do. Be very specific, and budget carefully. Vaguely described expenses are almost always higher than anticipated. Once you have your expenses figured out, you may have to readjust your revenue goals appropriately.
It is also a good idea to do a market analysis, and to always be on top of developments in the industry. You need to consider the potential rising and falling of local markets so you have the ability to ride out a slow period.
Making a business plan is different from simply outlining your goals. While it is good to have an overview of what you want to accomplish with your real estate business, it is vital that you sit down and map out the details. These details are what make up the business plan. It is action oriented and offers specific measures that you need to take, and in what time frame in order to accomplish your goals. Plan now, and a bright real estate future will be yours.