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3 Tips for Writing A Real Estate Business Plan

3 Tips for Writing A Real Estate Business Plan

3 Tips for Writing A Real Estate Business Plan

Real estate is a business, and like any other business, the success of the first year is crucial to making it long-term. Because of this, it’s vital to make a business plan. It’s practically a roadmap to success, providing directions and giving you destinations to head towards.

Studies have shown that if you write a business plan within the first six to twelve months, your chances of success increase 8%. It gives you clear direction and lets you determine what goals are attainable within your first year. It will also help potential brokers, banks, and even clients take you seriously.

1. Set Attainable Long-Term and Short-Term Goals

It’s important to keep your goals attainable. We’d all like to think that we can earn a million dollars in our first year, but it’s sadly not a realistic goal. This is why it’s important to set reasonable goals, and should you surpass them, pat yourself on the back for going above and beyond.

Long-term goals you should expect to achieve within a year or so. A good example is selling 24 properties in a year. This averages to about two properties per month. Some quarters might be more fruitful than others, so if you get ahead during one month, there’s less pressure on another where the market might be slow.

Setting short-term goals is beneficial to both the completion of your business plan and for the state of your mental health. It’s easy to get caught up in the pressure of looming long-term goals. This is why you should set simple, short-term goals that support your long-term goals. These will give you motivational boosts as you treat them as little victories. For example looking at 5-10 properties every week supports your goal of selling 24 properties.

2. Do Market Research

Market research always begins with asking questions. Usually, these address your strengths and weaknesses and set about using the former and fixing the latter. What are the things that you’re good at? What is a need that isn’t currently being met in your area? Is there a group of potential clients that is being underserved? What are other agents doing that you should be doing, too?

Due to lack of experience, during your first year you will likely have more weaknesses than strengths. However, a key point to remember is that weaknesses aren’t necessarily a bad thing. They are merely a factor to keep in mind. Recognizing your weaknesses leads to personal growth as you work to overcome them.

3. Make A Financial Plan

You need to spend money to make money, but you need to know how much you’re spending and on what. It’s important to separate your business and personal accounts, especially when it comes time to pay your taxes.

That being said, you will need to pay yourself a salary from that business account. Having a set salary is the best way to do it, as it will help you maintain a consistent budget. Determine how much you’d realistically expect to earn from your real estate business. Factor in your monthly living expenses, the amount of hours you expect to work, other sources of income, etc. You need to ensure that you’re not underselling yourself, but also leaving enough money in your business account for growth.

Overall, a business plan is vital to getting through your initial year as a real estate agent. It will keep you on track, save you from making potential mistakes, and prove to your clients and competitors that you are serious about your business.

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