Real estate business plans may cover your business entirely, or they focus on a specific service. They can outline an income goal or be used as a monthly work plan that evolves. Regardless of how you use them, the importance of a real estate business plan is simple: strategies on paper lead to ideas becoming reality. That paper then acts as a guiding document coaching you along the road to success.
While it may sound easy, there are goals, strategies, and tactics that need to be identified. You need to know where you are at the moment compared to where you want to be. Let’s take a look at the necessary steps you need to take when drafting your first real estate business plan:
5 Steps to Developing a Real Estate Business Plan
Initial planning: Begin with an executive summary to outline what you are trying to address and the timeframe involved in carrying out the plan. The summary will lead to opportunities or goals that you would like to capitalize on.
For example, your executive summary could look like this:
ABC Realty is an Ohio-based real estate company that specializes in starter homes and condos for the Columbus, Ohio community. The homes ABC Realty lists deliver what new homeowners are looking for in their first home purchase. ABC Realty’s clients will be provided with the attention to detail and customer service new homeowners look for throughout the home-buying process. Sales are projected to be moderate in year one growing substantially by year three.
Understanding strategy and tactics: Key elements that underlie each goal will be strategies and tactics. Your strategy will outline overall objectives, messages, and audience. And your tactics will include the initiatives you take to achieve each strategy.
Let’s consider the opportunity of marketing your business to a new community. A strategy may be establishing your brand so that prospective clients recognize your name. Supporting tactics may include: joining a real estate association, attending Chamber of Commerce networking events, advertising in the local paper, social media, and marketing content delivery or hosting an open house.
Assigning deadlines: A goal should be grounded within a timeframe to create a sense of urgency. But, tactics take time. And in some cases, tactics may be ongoing. Be sure to allocate “X” hours per month, or per quarter, to see each tactic through (for example, networking event participation).
Budget management: Don’t forget to consider the costs. As a real estate agent, you are a self-employed salesperson. It’s important to calculate projected income and expenses for each year. However, as a one-person team, it’s equally important to outline your daily business operations, identifying where support is needed.
Measure your results: Once your plan is completed, evaluate whether or not you met your goal. If not, determine why. This will be a good document to have for historical reference, keeping you away from tactics or strategies that you deemed unsuccessful.
Remember, if you want to achieve a certain income level or number of transactions, you need to consider the different goals that can help get you there. An overall business plan is a great way to get started, but targeted plans can help you gain an edge.