Life is a Gamble,
But a Business and Marketing Plan Improves The Odds.

By Stefan Swanepoel

In the late 1960’s Bob Dylan sang: The times they are a-changin’.  For real estate professionals it has never been more hazardous and confusing- it is truly like Dickens said: “the best of times and the worst of times.” 

With hot market mania tantalizing the nation and Lion’s share moguls sweeping up the greater part, survival and carving out a winning niche has become not only wise but essential. So for those agents that take their career seriously and wish to remain part of “The Few, The Proud and The Millionaire Agent” club, the next 60 days is business planning time. 

Many people set goals, but goals offer no means towards accomplishment. For that you need to map the journey.  Simply stated … a plan is a calculated set of guidelines to direct you towards your goal.

To begin a business and marketing plan as an agent you need to map out your specific goals and objectives. You need to determine where you’re going, which market you’re playing in and who you’re up against. The primary reasons for planning are so that you can better comprehend what needs to be done and then focus on the specific tasks that  require completion.

Seven Point Plan of a Business and Marketing Plan

1. How Much Do You Want To Earn?
Be careful. Revenue is not income.  Revenue is the gross earnings before expenses and taxes.  Income is what you keep after all is said and done. Do not confuse the two. If you do not set yourself an income goal for the year, chances are very likely that you will not achieve it.

2. Know All Your Expenses.
There are two types of expenses, fixed and variable.  In real estate that translates into Overhead and Transactional Expenses.  Overhead would be defined as those expenses, such as license fees, E&O insurance, signs, MLS access, etc., expenses you would incur just to function in the industry.  Overhead is the silent killer as most agents do not take this into consideration when calculating all their expenses.  Transactional expenses are those that incur with each Listing or Buyer such as Just listed/Sold Cards, Virtual Tours, Closing Gifts, etc.

3. What’s The Size of Your Market?
You must have your hands around the market. Pinpoint your market, whether type, geographical boundaries, price range, etc. Obtain the specific details of your market: the size, number of annual sales, home price ranges, change in the market over previous years, future growth projections, etc.

4. Who is Your Competition?
It’s  always wise to know your competitors. Are they national brands or well-established independents? Is it a single top producer that has been well established or is it a group of agents? Is their market share growing, constant, or declining? How aggressive or progressive are they? What unique elements do you see in their business plan and marketing?

5. Key Factors You Must Understand
Good business and marketing plans address many key drivers that directly influence and impact a real estate business plan and you must know and understand how these activities work. Ask yourself questions such as: What are my costs per transaction?  Where does my business come from?  What activities must I do to generate this level of income?   How do I check my progress on a weekly, monthly or quarterly basis? 

6. Map out the Action Steps
While putting down your goals in written form is critical, equally important is laying down the action steps that will get you there. This is where the rubber meets the road. Only now can you determine whether the goals and targets you have will be achieved.   If achieving your goals now seems impossible, go back to the beginning and revisit your research and earlier decisions.

7. Make it Measurable
Lastly, you must hold yourself accountable. You wrote the plan and set the goals with the intent of achieving them. Now measure your activities and results every week to ensure that you stay on track.

Tools That Can Do Everything
Thanks to technology, business and marketing planning has left the stone-ages of paper, pen and pencils and a previously daunting task is now as simple as email. Texas based CreateAPlan (www.CreateAPlan.com) has created a web-based application, specifically designed to create business plans for real estate agents and brokers.  A wizard walks agents through the entire process and in less than 30 minutes you will have a well constructed business plan providing the number of required transaction needed to close, a weekly To-Do list for what must be accomplished in order to meet the user’s income goal, a five-year projection on revenue and expenses, and a calculation of the overhead per transaction.  The system can even send you reminders about what needs to be accomplished each week.  

In Closing
Sure, life is a gamble, but you want to win don’t you? A comprehensive understanding of the fiscal aspects of your business, coupled with a business plan on how to achieve your goals, will not only decrease the likelihood of making unprofitable decisions, but also will keep you focused and improve your odds for success.