How to Write a Real Estate Business Plan for Agents
How do you achieve your career or business goals? Here’s a step-by-step guide on how to write a real estate business plan for agents.
Benjamin Franklin once said, “If you fail to plan, you are planning to fail.” In a survey by Palo Alto Software, companies who write a business plan were twice as likely to successfully grow and secure a loan and investment capital. This is also true in real estate. Whether the newly licensed agents or seasoned brokers, a real estate business plan that will provide direction is essential to start and growing the business and career.
In this article, we will present a step-by-step guide on how to write a real estate business plan for agents. But before we proceed, it’s important to understand the benefits of writing a business plan and what a good business plan entails. For real estate agents, a good business plan will help you answer the following questions:
- Where are you in your real estate career/business today?
- What do you want to achieve in your real estate career or business?
- How will you achieve your career or business goals?
- How will you measure your performance and how often?
- When and where will you make a course correction?
To answer these questions, it’s now time to create your personalized business plan. Here are 9 easy steps to get you going.
1. Understand the nature of your real estate business
You must create a clear vision of your real estate career or business when writing a business plan. Your business planning starts with understanding the nature of your business and what you want to achieve through it.
In this stage, you need to briefly describe your business and define your business mission and vision. This will set the foundation of your business and serve as the guiding principle with which your business will operate.
If opening your own brokerage firm, you should define the type of business you want to run and the kind of agents you want to attract. As the ship’s captain, it’s important to identify with whom you want to grow your business.
2. Determine your career or business goals
Once you’ve outlined the nature of your business, your next step is to determine what you want to achieve in your career and business. To ensure your business is growing in all aspects, you must lay out your financial, personal, and growth goals.
While being ambitious is a great trait in a businessman, make sure that your goals are SMART—specific, measurable, attainable, realistic, and time-bound. This will set your business expectations and provide a feasible direction as you launch your real estate business.
Here are some examples of SMART goals:
- Create your real estate business website in the first 3 months
- Hire a real estate assistant in the next 6 months
- Add 3 new real estate agents next year
- Sell 15 houses in the metro in the first year
- Increase the number of qualified leads by 25% each month using online tools (social media, paid advertising, and personal website).
You can also set personal goals relating to the amount of time you work and spend at home with your family for a better work-life balance.
3. Identify your target market
Once you’re clear about the type of real estate career or business you want to run, it’s time to identify your ideal customers. Knowing your target market will help you understand how you’ll serve this niche and outline realistic, practical, and feasible strategies to achieve your business goals.
To simplify targeted branding and fine-tune your marketing initiatives, you can further segment your market based on demographics, property type, geographic location, and financial capacity. This allows you to focus on specific clientele groups who would benefit the most from a kind of property or service you provide.
Here are some questions that could help you identify your target market:
- Who are your target clients or ideal customers? — home sellers or homebuyers, middle-income earners, high-income earners, etc.
- What is your target client’s story? — first-time homebuyers, newlyweds, retiring individuals, etc.
- Where do they want to live? — specific address, subdivision, townhome, condominium, etc.
- What are they looking for in a home? — home features, neighborhood, accessibility, etc.
4. Research your local competition
After you’ve determined your target audience, your next goal is to understand your competition’s landscape and competitive advantage. To succeed in your local real estate market, you must understand who your competitors will be and what they do. This will also help you find unfulfilled niches and sectors of service that you might be interested in.
Thanks to mobile technology, it’s now easier to analyze your competitors. You can start by following them on social media to see who they are marketing to and what strategies they are using to attract their audience. You can then outline your competitive advantages and unique assets that can fulfill the need of your target market.
5. Develop a list of the services you provide
Once you’ve analyzed your target market and local competition, you need to develop a list of services your business will provide—whether you’re a real estate agent or a brokerage firm. It’s also essential to determine the area of specialization that you will focus on: will you be a listing/seller’s agent, a buyer’s agent, a designated agent, or a dual agent? Are you going to sell residential or commercial properties?
If you’re unsure which niche to specialize in, you can start by listing the things that you (and your team) are good at, what you are passionate about, and the needs of your target clients.
6. Create a marketing strategy
Now that you have dialed down your target audience, local competition, and business services, it’s easier to outline your lead generation and marketing strategies. To be cost-efficient, your marketing strategy should be tailored to your target audience. For example, if you want to attract first-time homebuyers, you can maximize social media campaigns since the average customer is more likely to be younger. However, if your ideal customers are retirees, you can maximize your print resources, such as brochures, flyers, local newspapers, etc., to communicate with them.
For a more streamlined marketing strategy, you can use the following questions as your guide:
- How can you reach your clients effectively? — emails, texts, or calls?
- What are your clients looking for? — more space, interior luxury, or location?
- Which factors do your prospective clients consider the most? — space, price, etc?
Make sure to include the tools you will use to measure client experience in this section.
7. Conduct a SWOT analysis
Your SWOT analysis can help you position your business in the market more effectively. SWOT stands for strengths, weaknesses, opportunities, and threats. By creating a SWOT analysis, you can identify the different factors that may affect the success of your business and mitigate any risks that may hinder your business operations.
Your strengths refer to the things your business does well. This may include your competitive advantages, internal resources, and tangible assets such as capital, technologies, etc.
Your weaknesses are the things your business lacks or your competitors have that you don’t. This may include limited resources and an unclear selling proposition.
Opportunities are underserved markets in your area that may need your specific services. Some of the opportunities you may identify are having competitors, emerging markets, and good social media coverage for your business.
Threats include external factors that may hinder your business’s growth. This may include unfavorable economic and political conditions, changing regulatory environment, and negative customer reviews.
8. Make an annual financial forecast
Your business plan must include your yearly financial projections. This is a forecast of your future revenues and expenses. Creating a financial forecast gives you a better outlook on how your business will perform. Your financial projections will also help you predict whether your business will be profitable and how much revenue you need to stay robust.
Your financial and sales forecast should include the following:
- Personal or business expenses
- Starting and ongoing financial needs
- Sales and growth goals
9. Set a timeframe to revisit your real estate business plan
Once you’ve completed your business plan, you should set a timeframe for revisiting your business goals, strategies, and projections. Your real estate business plan is a living document that you must constantly update to see which strategies worked and which areas need redirection.
To ensure efficiency, we recommend doing a quarterly check-in to evaluate and revise your plan as necessary.
Components of a Real Estate Business Plan
If you’re ready to create your personalized real estate business plan, here are the essential components that you need to complete:
- Executive summary: This short section summarizes the entire business proposal so that readers can easily understand the business without having to read the entire business plan. It is easier to complete this section after all the business plan sections are written.
- Mission: This is an action-based statement that clearly defines your company’s purpose and how you will benefit your clients
- Vision: This refers to the long-term dream, goals, and unconditional direction you want to achieve for your business or career.
- Business objectives: Identify your short-term and long-term goals; make sure your short-term goals can help achieve your long-term goals
- Target market: This section details the types of clients and market segments you want to service
- Competition and competitive advantage: Identify your direct and indirect competitors, what they’re doing, and who they’re targeting. Also, include your unique advantages that could be your selling point against your competitors.
- SWOT: Analyzed your strengths, weaknesses, opportunities, and threats.
- Sales and marketing strategy: This section will include all the strategies, tools, and budget allocations you will utilize to attract your target market, generate leads, and successfully close deals.
- Timeframe: You should include a timeline of each strategy that you plan to implement. You can also include your business milestones, which detail your business goals with dates and the person or team responsible.
- Systems and processes: Identify all the systems and processes, along with the tools you will use to monitor your clients and business operations.
- Financial forecast: This section outlines your financial and sales forecast, usually in the first three years.
Putting on paper what your business is all about and where you want it to go will enable you and your team to meet your goals more efficiently. By learning how to write a real estate business plan as agents, you’re not only saving time, money, and effort but are also setting a feasible direction for your business to launch, operate, and grow. Nevertheless, you should back your business plan with proper implementation and regular follow-ups.
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