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Writing an Effective Business Plan for Real Estate Agents

Why You Need a Business Plan As a Real Estate Agent

To be a successful real estate agent, you need an effective business strategy. One that will direct your efforts and keep you on track in achieving your goals...instead of wasting time “chasing rabbits down the wrong rabbit holes,” and changing direction every other week. (A common problem in our industry.) 

This is not a one-size-fits-all industry. What works for one agent in one market, may not work for you in your market. Yes, you will always hear about that one agent who "made it" doing open houses...or cold calling...or door knocking...or their website...or whatever. Good for them! They found the right match for their style and personality, in their market. That doesn't mean it will work for you.

That explains why you can try and fail at activities that work for other agents but don't work for you. And then you get frustrated and feel bad about yourself, because you are doing what people tell you to do, but it isn't generating any income for you. The problem isn't you. The problem is that you haven't matched yourself to the right market and the right lead gen strategy.

Also, you may have other agents telling you, "You need a niche," or "You need to farm a neighborhood." Ok. Which niche and farm area will be profitable and work for you?

I'll say it again: The "trick" is finding the right match between your unique style and personality and the market that exists where you are located. And that is not as easy as it sounds. 

Template for ASB Business Plan is Available in JumpStart Workbook, JumpStart Toolkit, and JumpStart Training Course

Analyze Your Market First

When I first got into this business, I was told that I needed a niche and it should be something that I'm passionate about. Ok. So, I'm passionate about green living and decided to get an EcoBroker designation and go after the "greenie" market. I spent a lot of time and money going in that direction, but guess what? My area is a suburb of Houston Texas...the Oil & Gas capital of the world. Very few people here are "greenies." I think I generated one lead that way. What a waste of time! 

Another thing that I tried was farming a specific neighborhood that I liked. Guess what I found out later? Only 10 sales happened in that neighborhood annually, and I needed to sell about 14 houses to meet my income goals. So even if I had 100 percent market share in that neighborhood, it wasn't going to support me financially. Another waste of time.

What I should have done, and what you need to do, is take some time to analyze your market first. (I know...that word "analyze" makes our eyes glaze over.) The problem with that advice is that I have never seen, in any of the 30+ books and hundreds of hours of training that I have done as a real estate agent, any training that shows agents how to analyze your  market. But you absolutely have to look at sales numbers and demographics and other things in your area to find out where the profitable "target markets" are located. (Unless you want to waste a lot of time and money like I did.)

Components of an Effective Business Plan

Sure, a few agents eventually figure this out by trial and error like I did, but it takes years for that process to happen. If you don't have years to stumble onto a successful strategy, then you should take some time to analyze your market and write an effective business plan. 

Writing an effective business plan includes:

  1. Knowing what types of markets/customers are available.
  2. Researching those markets to find the ones that are profitable.
  3. Matching yourself (your personality, style, demographics) to the correct “target market.”
  4. Matching your marketing and advertising activities to both your target market and to your natural personality.

All three things need to come together to be successful:

You --> Target Market --> Lead Gen Strategy

The right marketing (lead gen) strategy will be based on three things:

  1. Your Personality
  2. Your Budget
  3. Your Target Market

The reason that your personality is important is because you will "burn out" very quickly if you try to do lead generation activities that are not a natural match for your personality. Introverts may be able to force themselves to door knock and cold call for a limited time, but they will not be able to maintain that in the long run...and they don't have to! There are 100 ways to market yourself as a real estate agent. You just have to find the right ones. 

In Chapters 5 & 6 of the JumpStart for New Real Estate Agents workbook we will show you exactly how to analyze your market and write an effective business plan. This is not a generic business plan. It is specific to the real estate business.

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This is not an overly simplified or overly complicated business plan either. This is a detailed plan that will guide your activities in building your real estate business over the first year of your real estate career.

Topics covered in the JumpStart workbook include how to:

  1. Analyze Your Primary Market: City & ZIP Codes
  2. Analyze Your Secondary Market: Neighborhoods or Buildings
  3. Evaluate Possible Farm Areas
  4. Evaluate Possible Niche Markets
  5. Select Your Target Market
  6. Plan Your Marketing Strategy
  7. Write Your First-Year Business Plan

As a new real estate agent, you are the sole proprietor of  your own company. You are the CEO, the CFO, and the VP of Marketing and Sales at your company, so you are the one who plans the business strategy and writes the business plan...there is no one else to do it for you.

  

 

MORE HELPFUL RESOURCES

Helpful resources for real estate agents:

 

  

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