With over 500,000 businesses opening each month, there is sure to be a lot of competition in any industry. If you’re hoping to open your own real estate business, you have a lot of planning to do in order to survive those critical first two years in business.
A well organized real estate business plan is your key to not only surviving but staying ahead of the pack. To run a strong real estate business, you must have a deep understanding of your local market. Watching historical trends can inform your understanding of how nationwide markets influence your local market. With an ear to the ground for new business developments, you’ll be able to predict the next big thing.
Along with your understanding of what’s going on around you, your real estate business plan requires some basic business logic. Follow these 5 tips to ensure your business succeeds from day one.
1. Write Your Mission Statement
This may sound highfalutin, but by setting up your reason for entering the market, you can guide all of your decision making through these concepts. If you think you might be gambling on taking on a new client, you need to figure out how they fit into your overall plan.
This doesn’t have to be a conceptual issue. It can be practical in saying that you deal with commercial properties in the northeast suburbs.
If you’d prefer to work with corporate clients, that should fall into your principles. If you want to work with forward-thinking startups and small businesses, you should put that in your statement.
Creating a mission statement allows you to put up some loose barriers to know when you’re spending money or pursuing a project outside of your comfort zone. It’s important to take risks in order to grow but you also need to be conservative with your real estate business plan in your first few years.
Take a look at how Liberty Properties positions their office as part of a boutique market for a good example of a mission statement.
2. Analyze the Market
There are few industries that require so much knowledge of your local politics, economy, and cultural life as your real estate business plan. Any company that sells widgets could shift to doing business over the internet. That’s not the case with a real estate business.
If you’re not a strong data analyst, you may need to seek the aid of someone who knows how to gather and manipulate data. Having graphs and visual aids that show positive trends can help you to close deals with potential clients. It can also help you and your staff understand the movement of your own market.
While people in the industry know the importance of data, not everyone takes the time to understand these trends. If you go out every day armed with an understanding of which neighborhoods are hot and which are cooling off, you’ll be a step ahead of your competitors.
3. Get To Know The Competitors
No matter what market you’re entering, there will be some people already taking up space. You need to make a competitive analysis a part of your real estate business plan.
Get to know who is most successful, whose market overlaps with yours, and who is growing the fastest. Look soberly at what they’re doing and see how you can learn from their decisions.
Your competitors can teach you the most about what to do and what not to do in your local market.
Watch the ways that they use digital and print promotion. See which social media channels they’re on and which ones they’re not on. If they’re not posting photos of their properties on Instagram or Facebook regularly, that could be a place for you to break into the market.
Taking advantage of your competitors’ oversights is a great way to make a name for yourself through your real estate business plan.
4. Set Goals
You need to start by setting goals for yourself. If you’ve already worked in the real estate industry, you know what a fat month looks like and how a lean month feels. You should be able to make some general goals from this knowledge.
Once you have general ideas in place, start getting specific with your goals. Make monthly and weekly goals. Figure out where you need to pick up speed so that you can prepare for a slump.
Make sure that you schedule a vacation for yourself as things start to cool off during a season. You’ll need a break and it will help you get through the leaner times with new energy.
5. Make A Budget
There are some major things you need to invest in when it comes to marketing, staff, and office costs. Depending on the size of the business you’re planning on starting, you might not need to open an office right away.
You could run your business for the first year out of a spare bedroom.
When it comes to marketing, you should learn about Search Engine Optimization. SEO is a great way to implement a strong digital marketing effort without spending too much of your budget.
By preparing your site to be found and ranked highly by search engines, you can ensure that your local user base sees you.
Make sure your real estate business plan budget accounts for time as well as capital. You can’t be properly seeking out new properties if you’re busy building a website or meeting with graphic designers for a logo.
While these things are important, they take time, which is related to your budget.
Build Balance Into Your Real Estate Business Plan
You need to begin your business by creating a foundation of dependable clients. They can be investors in the local market or major companies that are looking to expand. Once you have this foundation, you can have a minimum amount of stability that will balance out your adventurous efforts.