Most people (as many as 80%, by some estimates) leave real estate in the first year. That oft-quoted statistic illustrates not only that real estate is a hard business, but that people aren’t prepared for the kind of volatility that is inherent to a cyclical housing market, or the need to be proactive as an agent. The best way to avoid being caught unaware by anything is to plan and prepare. Most agents probably have a business plan of some kind, and there is no correct way to create or use one. But it can be incredibly hard to map out a strategy that is built on the unpredictable and often inexplicable housing market.
Here are four general tips to make sure your business plan is built to last:
Don’t overemphasize something that could change
Are you really good on the sell side? Are luxury condos where you aim to make most of your business? Are you an expert on new builds? All of these are great, but none of them should be the foundation of your success. At any given time, the market could shift and you would have to adapt. When laying out your strengths and vision, these things cannot be the foundation. Make sure your value proposition, target markets, continuing education, etc are diversified enough that you will be prepared when your region goes through shifts.
Put the ‘A’ in S.M.A.R.T
When coming up with goals, “specific, measurable, attainable, realistic and timely” is a great guideline. In real estate, that “attainable” might just be the key. Really think hard about whether your goals are within reach based on a whole bunch of scenarios. Map out different ways to reach them, so that if one path turns out untenable later on, you already have a backup. Make sure your goals—at least the most important ones—can survive worst-case scenarios. Have a plan in place for the leaner months (assuming your market has some seasonality), and leave some wiggle-room in other parts of your strategy for the tough times.
Know your demographics
Experts say that in real estate, it’s the demographics of a region that can best predict the future of housing there. Before you start on any plan that extends years or further, get at least a general idea of your region’s demographics and how they are changing. Are you gaining population? Is the population growing older? Are there more births, or less? What industries are declining, and which ones are thriving? All these questions can help you find your niche and focus your efforts on the correct areas, marketing and growth trajectories. Demographic changes are also less likely to shift swiftly or significantly in a short time period, so using these trends can help you form a stronger foundation for your business.
Share and get feedback
If at all possible, find someone in your region who is willing to look over your plan (or at least parts of it) and tell you what you may or may not be missing. Depending on how independent or experienced you are, this might seem like an unnecessary step, but there is always someone around who has seen more than you, or has a fresh perspective to share. When going to a mentor for advice, it is far more effective to ask them to anticipate issues, rather than asking for help solving problems. Even if there is no one in the real estate industry you want to share your plan with, a friend or family member can offer you general critiques that might prove very useful.
With how much real estate agents are expected to do on their own, a good business plan can provide an outline for a career that might otherwise get out of control—and quickly. While even the best business plan must be updated and reorganized, you won’t survive long if you don’t have a reliable sense of where you are going, and why. Use these tips to ensure you have a good foundation to build on as your real estate career grows.
