Real estate business plan

How to Stop Living Paycheck-to-Paycheck as a Realtor

Bankrate.com released the results of a survey recently – and it wasn’t good news.

In their survey, they revealed that 76% of Americans live paycheck-to-paycheck, with little or no emergency savings at all.

As a real estate agent, are you prepared to weather a gap in your income?

What if a sale fell through? What if multiple sales fell through?

What if the economy took a sudden turn for the worse and people temporarily stopped buying or selling homes?

Do you have a cash cushion that would carry you through?

One of the most common concerns I hear from agents is their lack of consistent closings and income –  the frustration they feel when situations spiral beyond their control and sales don’t close.

In this article, I’m going to explain how you can break the cycle of living from closing-to-closing and paycheck-to-paycheck. You’ll learn about creating a real estate business plan, generate consistent leads that are easier to convert to signed listings, keeping your pipeline full and adding greater consistency to your closings and income.

Ready? Let’s get started. . .

Develop a real estate business plan.

real estate business plan

Everything you want to accomplish in life starts with a plan.

Without a plan, most of the results you achieve are merely luck, not the results of carefully planned and executed strategy. And when your success comes from luck, you can’t point to specific actions that led to your success, so it’s impossible to replicate them. You can’t do more of something if you can’t identify it in the first place.

Your plan should reflect a number of things;

First, it should reflect the vision you have for your business – where do you want to be in 3, 5 or even 10 years?

How much would you like to earn? Your plan should include an honest accounting of your household expenses and savings goals. Then, you’ll add in your business expenses and your split with your broker to determine your required sales volume.

Once you know how much you need to produce, in terms of contacts, leads, appointments, listings and sales, the next question becomes; “Where will that business come from?”

The next step in creating your plan is to identify a profitable niche market. Too many agents burn themselves out by chasing deals all over town. Instead, focus your time, energy and budget on an area with the proven potential to support your production and income goals for years to come.

I also recommend having more than one niche focus. If possible, select a niche with the potential for recurring business, such as working with investors or homebuilders. Once you’ve established those relationships, it’s easier to achieve repeat sales with the same clients instead of relying on new leads for every transaction.

Once you’ve identified your niche market, or markets, that you will pursue, the next question becomes, “Why would these people hire you over any other agent?”

You must be able to provide a clear, concise answer to that question. This becomes your value proposition, or your promise of future value. It explains to potential clients, “here’s what you can expect to receive, in the way of benefits, in the future, by hiring me today.” If you don’t have a compelling value proposition, your services will be viewed as a commodity – easily replaceable with the next agent who happens along.

OK, so you’ve established your vision for your business, calculated your required product, identified the niche markets you intend to pursue and developed a value proposition for each type of client you will serve, what’s next? The remaining aspect of your plan should identify the necessary skills and resources you’ll need to implement your plan.

Do you need a better listing presentation?

Do you need to acquire specific knowledge that your potential clients will expect you to have?

Make a list of all of the skills, resources and partnerships you’ll need and when you’ll need to have them. And then work towards checking these items off of your list as the weeks, months and years pass.

After you have completed your plan, the numbers, and the scope of work, may cause you some anxiety.

They typically do. At first the work seems overwhelming.

But you’ll also feel a wave of calm, a sense of resolution, that you know what’s ahead of you.

You know how many contacts you need, how many leads and appointments.

You know where your sales are going to come from.

You have a compelling reason for homeowners to do business with you versus the competition.

And you know what skills, resources and relationships you need to make your vision a reality.

All you need now is to implement your plan.

Adv Bus Plan Webinar Ad - inline Blog post.001

Consistent lead generation.

Once you have created your plan, it is time to put it into action. This begins with lead generation.

Many agents, especially those with inconsistent incomes, treat lead generation as an afterthought.

Have you ever gotten so busy with listings, or a demanding buyer client, that you put your own lead generation on the back burner – figuring there’s no way you could possible handle any more?

The best way to overcome this procrastination is to use time blocking.

Set aside the necessary time, every day, when you are fresh and energetic, to look for new business.

There’s two strategies you need to implement, starting today;

Outbound Lead Generation:
real estate business plan

This is prospecting, face-to-face meetings, etc. These tactics are most effective with people who already know, like and trust you – or those who have a demonstrated need for a Realtor. It’s also where you’re likely to find your more immediate opportunities.

First, let me say that I’m not a particularly big fan of cold calling – or door knocking. I think these are outdated lead generation methods and with the rise in cell phone use, call-blocking and answering machines, it’s getting more challenging to reach people on their home phones. Plus, you’re contacting someone who doesn’t know, like or trust you. As such, getting them to cooperate is going to be more difficult than if they already know who you are and what value you bring to the table.

But there are certain types of cold sales calls that make sense – particularly expired and withdrawn listings and for-sale-by-owner’s. So if you want to pursue these, find a quiet place where you can prospect, undisturbed, until you have made all of the contacts your production plan requires. You must become absolutely fanatical about protecting this time in your schedule. Do not allow anything to take precedence over your daily lead generation.

Target the low-hanging fruit first – expired and withdrawn listings, then FSBO’s. You can also call owners who had rented their homes while simultaneously trying to sell them. They may be tired of being a landlord!

Then call your sphere. I’m not a big believer in begging friends for business, so I called them just to check in and see what was going on in their lives.

Early on I had made it a point to ensure my friends knew three things about me; my unique value proposition, my track record and my desire and willingness to help them, or their friends, sell a house. I didn’t work with buyers.

Once those three items had been cemented into their memory, I never had to ask my friends for business – they knew what I did, they knew I was good at it and they knew what kinds of people I could help. The referrals came naturally.

Inbound Lead Generation:

real estate business plan

While you will probably need to do some outbound marketing initially, your goal should be to rely more on inbound marketing over time.

Here’s why;

There is simply no way you can call every homeowner in your niche and get, and keep them, on the phone long enough to communicate how you are able to help them. On a similar vein, there’s no way you can knock on every door in your niche market every month if your production plan calls for a niche market of several hundred, or more, homes. That’s where inbound lead generation comes in. This tactic enables you to generate consistent leads from your niche market by providing content that establishes your credibility and expertise and maintains your top-of-mind awareness with homeowners.

Inbound lead generation can be automated, enabling you to reach hundreds, or thousands, of homeowners every week. Once I had built my list of subscribers to just over 1,600 homeowners, I converted my communication from direct mail to email, saving thousands of dollars per year.

The key with inbound lead generation is to offer something homeowners in your niche would value enough to give you their email address to receive. It has to be quality – your best material. It’s the first impression you’ll make with a potential client, so it’s worth spending some time and money to create something epic.

If you don’t know how to get started creating content for lead generation, here’s an article to help you out;

“How to Create an E-Book for Real Estate Lead Generation”

Then, using a series of automated follow-up emails, you put your pre-listing presentation in front of your subscribers.

But you can’t call it “Your Name’s Listing Presentation”. Instead, call it something that gets the homeowner’s attention. I called mine, “Preparing for a Successful Sale”.

At the bottom of your regular follow-up emails, create an attention-grabbing headline offering readers an opportunity to get your pre-listing presentation.

I used, “Thinking About Selling? Learn How You Can Achieve Market-Beating Results.”, with a subhead of “Get a Copy of My Free Guide, Preparing for a Successful Sale”.

Then provide a link to a .pdf version of your pre-listing presentation.

Keep in mind that the National Association of Realtors reports that 85% of homeowners only talk to two agents when they list their home. By putting your pre-listing presentation in front of homeowners every two to four weeks, you increase the likelihood that if an owner is thinking of selling, they will read your presentation and you’ll get the opportunity to list their home.

Using a pre-listing presentation also makes it much easier to convert appointments to signed listings. Here’s what an agent recently shared with me about his experience;

“Greg, I’ve been in real estate for 18 years and love learning. I recently switched to your pre-listing presentation and am amazed! Quickest listing appointments ever. Thanks!”Patrick DeFeo, II, Bradenton, FL

The goal of inbound marketing is to build long-term awareness, to stay top-of-mind with homeowners in your niche market so that when they are ready to sell, you’re the agent they think of. Automating your follow-up enables you to maintain that awareness, to build your credibility, so that when you are given an opportunity to meet with them, you are able to convert them to a client with greater ease.

Create systems to make your job easier.

Real Estate Business Plan

Remember earlier in this article where we talked about agents getting overwhelmed by too many demands on their schedules?

That happens because agents don’t create systems.

To manage the number of listings you need to reach your desired income and savings goals, you need to have systems in place that keep you organized. They keep you focused on what’s next. And they make it easier for someone to help you.

I’ve seen time after time where an agent gets so busy they hire the first person they can find to be their “assistant”. The problem is, the agent never created systems for the assistant to follow. Now the assistant is frustrated because they aren’t sure what they’re supposed to do – or how to do it. So the agent now spends even more time trying to teach the assistant. That defeats the whole point of hiring an assistant.

The next time you’re sitting around the office with nothing to do, create a checklist of every step you take with a listing – from the time a potential client calls until you have closed the sale.

Then look at that list. What could be outsourced? Who could you get to help you? Do you really need a full-time assistant – or could a part-time or virtual assistant take on those assignments?

Add to your checklist the details of each vendor you use; their names, contact information, payment requirements and order forms. Each time you get a new listing, staple a copy of this checklist inside the folder you create for the client.

Then, every time you open the folder, you are able to see exactly what needs to be done, who to call and more.

At this point, you could easily hand this off to an assistant and they could follow your instructions on the checklist with ease.

Track your numbers to see where you can improve.

real estate business plan

The last step, and perhaps the most important, is to have a system in place to track your progress. You need to be able to see how you are progressing towards your production and income goals.

Think about it; if you don’t know how you’re doing, how can you identify areas for improvement? You’ll simply move along assuming you’re doing the best job you possibly can. And that’s where you’ll get into trouble!

Before you think about expanding into a new niche market, look at your conversion ratios. How many leads are you getting from your niche? Your sphere? Are there ways to increase those leads?

Once you get a lead, how are you doing converting them to signed, salable listings? Is there room for improvement?

Your best opportunities often lie in the niche market where you are already established. You have a proven track record and name recognition. Focus first on maximizing your market share within your current niche markets before looking to move into new markets.

Another way to look at tracking your numbers is accountability.

When you have a plan, and you are tracking your numbers, you can hold yourself, and your real estate lead generation efforts, accountable for the results you desire.

Better yet, share your production goals with your spouse, a friend or partner, or your broker. Ask them to help hold you accountable for achieving your production and business goals.

Conclusion

We hear regularly that somewhere around 90% of real estate agents don’t last five years in the business.

That’s a shame.

Because the real estate industry offers opportunity like very few others.

You get to choose who you affiliate with, you get to choose your niche market – who you want to serve, and how you want to work. Not many other businesses offer this flexibility.

And you also get to choose whether you succeed or fail.

Everything that happens to you in your business, and your life, will be the result of the decisions you make today.

Make good decisions, see good results. Make bad decisions, see bad results.

It’s your choice.

Adv Bus Plan Webinar Ad - inline Blog post.001