One of the leading broker-owners in the industry discusses best practices, tips, and what she has learned over the past decade of ownership.
Owning your own business is a dream for millions of Americans.
A report by Fundera in September also points out that not only is owning a business a dream for most people, it’s a large supporter of the economy. There are 28.8 million small businesses in America, and they employ 56.8 million people. Small businesses—defined as those with fewer than 500 employees—account for 99.7% of all businesses in the U.S.
However, getting off the ground can be a struggle. Terry Rasner-Yacenda, owner of Reno/Tahoe Realty Group, LLC for the past 10 years, can relate to these issues.
Yacenda said many people love the idea of opening their own business, but “they don’t realize the pace and demands of it.”
During her career, though, she learned valuable information on employee management, marketing, and even forming a business plan.
Yacenda said the most important thing to do before you open a business is conducting research. She says to put aside money for unforeseen expenses, speak to other brokers, and even try to establish a mentorship if possible.
Forming a business plan is essential, she said, saying it is crucial to update and check it as time goes on.
“It’s a living document. It’s not something that’s etched in stone. It’s going to be moving as you are talking to different people and realize ‘oh my gosh, I missed that,’” she said.
Other items, such as a marketing plan, insurance policies, equipment, location, and website addresses, all need to be taken care of during the planning stages.
Yacenda said having a bookkeeper, CPA, or an Enrolled IRS agent available is vital. Business owners, she said, need to understand financial statements, such as a balance sheet, income statements, cash flow statements, and profit and loss records.
“You’ve got to stick to your budget. Review it monthly with your financial person so you know the condition of your business at any given time,” she said.
Additionally, she said have an attorney review and approve everything, adding, “you want to have every I dotted and T crossed.”
Now that the business is operating its time to make money, right? Not so fast.
Yacenda said 80% of new businesses crash and burn at the 18th month and 50% fail at five years because they run out of money, which is something to be mindful of in real estate.
“You’ve got to have cash flow at all times,” Yacenda said. “Especially in real estate, because it ebbs and flows all the time.”
One of the biggest mistakes Yacenda said she made was not having a marketing plan out the door. She noted that she had to work to diversify her company and remain competitive when the REO and BPO markets slowed down.
To sustain, she got her manufactured broker’s license to sell manufactured homes on leased land, as she is one of two brokers in northern Nevada licensed to do both under one umbrella, so giving herself a consistent cash flow. She also entered the commercial real estate arena and is involved with Federal contracting as additional revenue str
She said that her cash flow has increased since diversifying, and that she is in the process of hiring new employees after being awarded a multi-million dollar Federal contract for a project in 2020.
“If I had not diversified I would be pinching pennies right now,” Yacenda said.
Yacenda said it is critical that all employees are placed into a contract or work agreement, depending on what your state’s law says.
“You need to have that [document] so perfectly put together. My attorney put mine together and I love it. Never had a problem,” she said.
She also noted the importance of conducting regular performance reviews and documenting everything.
Yacenda said she allows her employees the ability to expand and gives them freedom to express opinions with no repercussions.
“They’re the ones on the front line, doing the job and they have the best ideas. I love that,” she said.
Yacenda says her brokerage pays for all training and grooms employees for management positions. She added that she’s had employees working for her since 2008 that are now running different divisions within her brokerage.
A report by Bridge and Instructure, a software technology company, found that 67% of millennials will leave a position if it lacks growth opportunities and avenues for leadership.