Starting a real estate business can be profitable next step for a real estate broker armed with entrepreneurial zeal, ample financial resources and valuable contacts acquired over time.
However, despite your tenure and experience as a real estate broker, starting a real estate business requires hard work, training and time. The real estate market is also prone to drastic fluctuation. Therefore, you need to possess the uncanny ability to keep your business afloat even in perilous times and manage your real estate business efficiently.
Following are a few useful tips to help you branch out and established your real estate business:
Determine your business idea and analyze the market:
According to a 2012 Economic Census, there are more than 86000 real estate firms operating in the United States. To establish a sustainable business in a saturated market, you need to figure out some key details including the services you plan to provide and the target market.
Real estate brokerage cannot function on the principle of “one size fits all”. It is recommended to determine the scope of your business and whether you will specialize in residential or commercial real estate, national or international real estate or a combination.
You also need to evaluate your target market to determine the demand for the real estate services you plan to provide, the scope for growth, and the existence of potential competitors and their market penetration.
Write a business plan
Once you have conducted a thorough market research, the next step is to devise an ingenious marketing plan which comprises of the initial setting-up costs, business model, marketing strategy and other essential elements required to run a successful business.
Online resources such as U.S. Small Business Administration’s website, can help you get started as it provides useful sample business plans and free counselling.
Following are a few integral parts of a perceptive business plan:
- Business model provides an overall description of your company, identifies sources of revenue generation, explains the services you are offering, and also includes the details of your financing
- Budget outlines the monetary resources; estimate the earnings and break down the expenses into marketing, advertising and operating costs
- Business structure describes the legal structure of your business such as an LLC, sole proprietor, partnership, etc.
- Marketing strategy describes how you plan to market your company and what unique marketing tactics you plan to employ
- Recruiting strategy includes an overview of how you intend to find and retain the most exceptional salesmen
- Mission statement highlights your goals and specifies your unique selling point (USP)
Analyze the financial aspects
Starting a business requires substantial financial investments and the primary income may not be sufficient enough. Therefore, you need to estimate your startup cost, required to lease an office in an ideal location, buy necessary office supplies, and get a license, amongst other things, as well as daily operational costs to carry you through the first few lean months.
Moreover, you need to include the cost of outsourcing certain jobs, which are beyond your expertise, including web and graphic designing, marketing, and accounting.
Once you have an approximation of a projected cost, you can decide about whether you will fund your business with your savings, bring on a partner on-board, approach a silent investor or acquire a loan from the bank.
Invest in marketing
Your marketing strategy needs to be well-planned and meticulously executed to propel your business towards growth. Begin by identifying your target market and devise a plan which caters exclusively to your target audience. For example, if you are aware of a new transportation project or school construction commencing locally, you can include this information in your marketing plan.
Craft a prominent social media presence with a polished website that channels your professionalism and dedicated social media accounts on Facebook, LinkedIn and Twitter.Social media marketing, if efficiently conducted, has the potential for massive outreach with minimal investment.
Invest in brand recognition, by hiring a graphic designer to create a distinctive logo that should be featured on your website, emails and other ad materials to project a unified image.
Remember, a top-notch marketing campaign which uses high-quality materials and creates appealing advertisements can put you in the league of the big guns of the real estate market and help you get noticed, instantly.
Construct a robust team
A robust team of top talent functions as the backbone of a thriving business. Qualified agents who have worked locally can bring in adequate business and help your business excel.
To hire the best of the sales force, you need to identify and convey the benefits you can offer them. Put in place an employee reward program that motivates them to work harder and keep them content in their job.
However, it is also crucial to understand that as a novice real estate business owner with limited resources, you may have to function as one-man task force initially until you are financially stable enough to hire additional staff.
While you may be a competent real estate broker with years of experience under your belt, running a business is another story altogether. Therefore, you need to network and form analliance with other business owners who can guide you through tough situations and mentor you through the initial years.
You can join online discussion forums, social media communities pertinent to your niche and attend entrepreneurial networking events.
Start a client appreciation program
It is always a smart move to convey your appreciation to your clients with memorable gestures; however, it is even more imperative as a new business owner as it can generate referrals and sent more business your way.Majority of real estate firms flourish when the previous customers refer the company to their friends. You can also promote referrals by offering valuable incentives in addition to impeccable services to your customers.
Real estate industry is a demanding niche which requires rigorous efforts and surpassing customer expectations. To expedite your efforts, you can employ real estate management softwarewhich combines modern technology with smart property management practices to take your entrepreneurial endeavours to new horizons.
By: Erica Silva