As the housing market continues to adapt and normalize, agents and brokers may need to take time to develop a new business plan to lead them to prosperity in the new market.
A business plan is essential to any new business. Studies show that 40 to 80 percent of new real estate businesses fail within the first year, depending on the area, and almost 90 percent fail within five years according to the National Association of Realtors.
In today’s changing market, even seasoned agents and brokers may need to take time to create a business plan. Smart agents are adapting with the market and entering new sectors where they can translate their REO skills. As they enter these new markets, a refreshed business plan can be a vital tool to their success. Creating a business plan can be confusing and overwhelming, not to mention time-consuming. We have broken a traditional business plan into subsections for easier consideration, and better results.
A projected budget is vital to any business. Expenses can stack up, so it’s important to keep track of what you need and how much it will cost. You will need to consider the salary expectations for yourself and all of your employees. You will also need to budget for building and utility fees, along with equipment and technology fees. Consider any new listing and servicing management fees you may incur in your new target market.
Knowing exactly how your agency will run is a very important part of your planning. Each employee will need to know exactly what his or her responsibilities are. Roles may change greatly with new markets, and should be discussed thoroughly in order to ensure everyone’s success with the new plan.
Keeping up with the industry can mean the difference between longstanding success or closing your doors. Whether you are extending into the growing single family rental market, picking up property management assignments, or applying your skills in another area such as probate, set aside time and budget for training and certifications for yourself and your staff.
Stepping into a new market means finding new sources for leads. Social media and networking events are great places to start. Also, talk to other agents in your area about what strategies they use, and which ones they don’t see as effective. Find events that pertain to your new market, and attend as a team. First-hand experiences always stick better than reading other’s notes, so it’s best if all team members attend the session.
Remember the key to a successful business plan is details. Sit down with your team to discuss the transition, and brainstorm the details that should be covered. Diving into a new market can be unnerving, but having a good plan will help your agency transition smoothly, and with more success.