How to Create a Real Estate Business Plan in 60 Minutes or Less
Want to know the secret to a successful first year in real estate? The answer is to create a business plan.
A business plan may seem boring, old school, or complicated, but it's really easy to do and it can be done in as little as one hour if you follow the below tips. Don't overlook the power of a simple business plan to guide you through the uncertain waters of your first year or two in real estate.
Let's quickly explain what a real estate business plan is and why you need one before we share the shortcuts to creating your own in 60 minutes flat.
A business plan is a document that maps out a path from your starting point to your business goals. It describes your mission, your goals, your time frame, and your strategies for reaching those goals. It also anticipates potential problems and what you can do if you encounter these issues.
Just like you wouldn't go on a long trip without a map, you shouldn't start your real estate career without a business plan. It will help you get to where you're headed without getting lost.
Here are the reasons you need to create a business plan as a new real estate agent:
It's easy to get caught up in the fine details when you're starting your real estate business as a new agent. But in order to reach your goal and manage your stress along the way, you need to see the big picture. This way, you can identify where you are, where you're going, and the path to get there. By creating a business plan, you get a broad perspective of everything you need to succeed.
And once you have that perspective, you can then make an actionable plan for your real estate business, narrowing in on each activity you can do that will help you reach your goals.
If you’re a broker hoping to open your own brokerage firm, you may need to secure funding to help you set up your business. This may include paying for a lease, buying office equipment, and making deposits for utilities.
By creating a business plan, you'll not only be able to calculate exactly how much financial help you need, but you'll also be able to provide lenders with a legitimate business plan that shows exactly how and when you will repay the debt. Most lenders require a business plan for this reason.
Creating a business plan doesn’t have to take a lot of time or effort. Chances are, you already have most of these answers already. But writing down and organizing this information will help you create a stronger and more cohesive plan for growing your real estate business. So let's get started.
Your business plan should include an executive summary that describes who you are, what you do, and who you serve. Get specific with this statement so that you can differentiate yourself from other real estate agents. Here's an example you can fill in:
[Your name] is a real estate agent who [your specialty] for [your target client].
ex. Bethany Williams is a real estate agent who specializes in luxury condos for first time homebuyers.
Your mission statement describes your reason for being in real estate. And we may jokingly say, “to make money,” but there are countless other ways that you can make money. There's a reason you choose real estate as your career. Beyond money, how will you know you're successful as a real estate agent? What do you aim to do?
Do you want to help your client win?
Are you focused on diversity and inclusion?
Would you like to empower and educate your clients?
In addition to purpose, your mission identifies how you benefit your client.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. Let's break it down.
What are your strengths as a real estate agent? Even if you're new to the game, you already know some skills that you bring to the table, whether it's communication, patience, problem-solving, tactfulness, or tech-savviness.
What are areas where you're not as strong or capable? Are you inexperienced? Do you have little to no money for marketing? Are you a procrastinator?
Opportunities and threats shift the focus from you personally to the local real estate industry as a whole.
When it comes to opportunities, think of what favorable circumstances currently exist in your target area or within your target demographic. For example, is the population in your area growing at a record pace? Are new businesses coming to the area? Describe trends and opportunities that may help you succeed as a real estate agent.
Next, identify what threats may thwart your future in real estate. Is the market saturated with other agents? Has the local economy taken a nosedive? Why do you think it will be difficult to compete with other agents?
Now that you've performed a SWOT analysis, you can use that information to create a description of your real estate business. Describe what makes you different from everyone else out there and why people should work with you instead of the competition. You'll use this description to define your marketing strategy and attract the right clients.
Now it's time to create goals for your real estate business. You can set both short and long term goals.
To get started, make a list of everything you'd like to accomplish through your real estate business within the next 12 months. Be realistic with yourself. Can you make a million dollars in 365 days? Maybe. But is that realistic? Probably not. Go for low-hanging fruit so you avoid discouragement.
Set goals for all three of the following:
Financial How much would you like to earn monthly, starting at month 12? (Add up your monthly bills to calculate how much you need to earn each month.)
Business Growth How will you increase awareness for your business among your target audience? How will you stay in touch with your network?
Personal Growth How will you invest in yourself over the year to ensure that you’re a success? Will you attend networking events or learn a new technology (such as Facebook marketing) to improve your skills as an agent?
The above are big picture goals. But now, we need to create mini goals to ensure that you hit those goals. Let's break it down.
To reach your financial goal, you need to decide what to do on a day-to-day basis to generate leads and operate your business. Here’s a guide to help you schedule your day as a real estate agent.
To grow your business, you need to make a list of specific actions you will take each day, week and month.
To grow personally, revisit your weaknesses and consider areas that you’d like to improve. Then, make a list of things you can do to improve those weaknesses.
Your marketing strategy will determine if your business is successful or not. So now that you have the basic goals defined, it's time to laser-focus on how you'll market your real estate business in order to generate leads.
At minimum, you'll need a plan for the following:
Website - In addition to the website your broker may have, you'll benefit from having your own real estate agent website because it's another opportunity to generate leads for you directly. Document how you'll create your website, what tools/ services you'll use and how much it will cost upfront and monthly (for ongoing hosting). Also set a time for when your website will go live.
Content marketing - This is any content that you create to promote your real estate business online. It includes blog posts, social media posts, podcasts, videos, and email newsletters. Make a plan for how you'll create this content and which platforms you'll start out using (your blog, Facebook, TikTok, etc.).
Paid advertising - Although this part is optional, it may be a good idea to consider how you can use social media to market yourself as a real estate agent. When compared to traditional forms of marketing, such as direct mail postcards and bench billboards, social media ads can be a more affordable way to get you noticed by your target audience. If you choose to use this type of advertising, consider what types of ads you’ll run, how much you can afford to spend on them, and whereon what social media platforms you'll focus. Then add that information to your business plan..
By the way, it's okay to test and then decide to switch up your marketing plan. Your business plan is a living document which means that it should be continually updated. It's not set in stone. Instead, it grows and changes along with your business.
After you've created a list of what you need to have in order to successfully run your business, set a realistic budget. To do that, consider the following:
How much will it cost to operate your business on a daily, weekly, monthly basis?
How will you generate this money when you haven't started generating income from your real estate business yet?
How long do you predict it will take until you are able to generate an income from your business?
By answering the above questions, you can create a no-fail budget that will support both you and your business for the upcoming year.
Because real estate requires you to invest your time and resources upfront, it's important to create a roadmap to your success. A business plan will help you strategically manage your resources so that you can grow your business steadily over the next 12 months. So, what are you waiting for? You can do it!