New agents, tortured by what feels like an enormously long wait between license application and receipt, typically tend to want to hit the ground running the minute that license is in the broker’s hands.
It’s only natural to want to jet down the runway to success, but how will you get from here to there?
That’s what a business plan is: a roadmap of how to reach your income goals from where you are right now. Once you’re familiar with the real estate terrain, and you know the shortcuts, the map may feel like an unnecessary encumbrance, but it’s not.
Business plans aren’t static and require tweaking as you move up in your real estate career. Your sphere of influence grows, requiring the use of good contact management software. Your personal expenses may change and you will no doubt need to adjust your marketing expenses along the way.
The process of creating a “roadmap for success” for the new agent is a bit challenging, though. I mean, you have no past expenses with which to estimate a budget. How do you plan for marketing when you don’t know how much money you’ll have to play with?
Map out your first-year goals
Make a realistic determination of where you want to be in your new business by the end of your first year.
This should include both a financial goal (how much money you’ll make) and other goals as well. For instance, your goals may include adding 100 people to your sphere of influence or to come up with a killer listing presentation. A financial goal could be planning to put aside a certain dollar amount to buy additional tools.
Create a budget
To come up with an accurate budget requires understanding your personal as well as business expenses, both fixed and variable.
Start with your personal expenses, such as your house payment or rent, what you pay for utilities, groceries, entertainment and the like. This will give you an idea of the total amount of income you’ll need to cover these expenses.
Determining your business expenses will be a bit more challenging since you have no figures from last year on which to base your assumptions. Breaking these expenses into smaller chunks will help you get a handle on them.
Startup expenses: These include your NAR, state and local association fees, MLS dues, lockbox expenses and the cost of any tools you’ll need to buy to get going (laptop, software, website expenses, etc.).
Marketing expenses: You’ll need to market your business as well as any homes you may list this year. We offer a series of Agent Introduction, Listing Inventory and Just Listed postcards that will get you off on the right foot.
Ongoing expenses: Your automobile gas budget is about to explode now that you are part of the real estate industry. Plan on spending a good deal of your budget on your vehicle – maintenance and gas for starters.
Then, there are your phone, internet, web hosting and the other costs that will recur routinely throughout the year.
How much do you need to make?
This is the trickiest part of your business plan, but the most critical as well. You’ll want to estimate how many sides you’ll need this year to get the money you want to make. This means figuring out how many prospects it will take to get a transaction, knowing the average sales price in the area in which you work and crunching some numbers.
We have put together the perfect simple yet effective business plan worksheet to help you do these calculations. You can find it online here.
Once you know how many listings or sales you’ll need each month to reach your financial goals, you’re on your way to success.
It’s time to introduce your new status to the world (or at least your corner of it).
Send out the Neighborhood Specialist postcard from the Agent Introduction Series to at least 100 new prospects in an area you want listings.
Need help targeting the perfect niche of sellers or buyers? Use our mailing list tool to create the ideal list or call our support team for assistance at 866.405.3638!
PLUS: When you have time…here are 3 free ways we can help you CRUSH IT in 2018!
1. The Free 2018 Real Estate Business Plan.
Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan – Click Here
2. The Free Online ROI Calculator.
Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! – Click Here
3. The 12 Month Done-For-You Strategic Marketing Plan.
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Listing Inventory, Geographic Farming, and Sphere of Influence – Click Here – Click Here
Also…check out these cool tools 🙂