If you are a REALTOR® or other real estate professional considering starting your own real estate business, congratulations! Any new enterprise is exciting, but even for seasoned real estate professionals, it may take some direction to know exactly how to get started.
The first step to start a real estate business is planning. That includes taking steps to define your future business and determine exactly why you want to create it. These steps are crucial as they will be the foundations for planning many other business details, including the area you’ll be specializing in and the risks you’re willing to take.
Planning Your Real Estate Business
One of the reasons that entrepreneurs start companies is to meet their personal goals. For example, here are some common reasons professionals enter the real estate field:
- Flexible schedule that allows more personal time.
- (Potentially) high compensation.
- Relatively easy field to enter.
- Genuinely talented/passionate salesperson.
These are just examples, but any or all of these reasons could play an important role in the kind of real estate business you want to create.
Before you take any further steps, ask yourself about your personal goals and what you want to achieve through your business. Let’s look at the three questions to help define your business goals.
What kind of real estate business do I want to develop?
If you’re seeking quick profits, you may not be necessarily concerned with building a long-term business. Similarly, so-called “lifestyle entrepreneurs” (those who create businesses that generate only enough profits for them to maintain a particular way of life) may not focus on building businesses that can survive their departures. However, REALTORS® and real estate brokers who want to sell their businesses or pass them to the next generation are interested in creating businesses with long–term staying power.
What are my short-term and long-term plans?
Ask yourself if your goals are specific and concrete. Are they measurable? Are they achievable? What is your time frame for reaching them? Where do you want to be in five, ten, and fifteen years?
What risks must I take and sacrifices must I make?
A sustainable business has productive assets beyond its founder’s efforts, contacts, and skills. That means it often involves taking more risks, particularly financial risks, in the long-term. To build staying power, you may need to invest profits into the business, launch advertising campaigns, take on additional partners, and guarantee debt personally. As a startup, your company may have to recruit an inexperienced workforce, which could increase personnel costs. Given these factors, it could be several years before their businesses create sizeable profits.
Real Estate Vision Statements
Though related, the mission statement and visual statement for your real estate business will be quite different. Both are very important aspects of planning your real estate company.
How to Create a Real Estate Vision Statement
Your real estate agency’s vision statement should be an aspirational description of what your company would like to achieve or accomplish. Your vision statement is intended to serve as a clear guide for choosing current and future courses of action.
When creating a vision statement for your real estate business, consider exactly what you want your business to attain as related to the following factors:
- Employees
- Growth
- Societal contributions
- Values
Real Estate Mission Statements
Your real estate agency’s mission statement should be a written declaration of the company’s core purpose and focus.
Why are mission statements important?
- Mission statements can serve as a filter to separate what is important from what is not.
- Mission statements state which markets will be served and how
- Mission statements communicate a sense of intended direction for the entire agency.
When you craft your business’ mission statement, you should consider your company’s previously crafted vision statement as well as your clients’ needs and goals.
How to Create a Real Estate Business Mission Statement
You can use the following questions to help plan the perfect mission statement for your future real estate agency.
- What services will we provide? The answer to this question should describe which of your clients’ needs will be met by your new real estate agency. For example, these needs can be financial, logistical, sentimental, geographical, and more. For example, a residential real estate brokerage helps people buy and sell homes. However, from clients' perspectives, the brokerage helps them fulfill the dreams of home ownership, create wealth, raise their families, and improve their quality of life among other things.
- How do I provide that service? The answer to this question should describe the technical elements of your business. It should explain your real estate services, including the processes, costs, logistics, and how you will meet your clients’ needs.
- Who is my target market? The answer to this question will help you create a targeted marketing strategy. This will also help you decide the appropriate mix of services and their price points. What do you want your niche to be? What type of properties will you help clients buy and sell? Commercial? Residential? Who will be your target customers? Luxury home buyers? People relocating to the area?
Your new vision and mission statements are intended to help guide your growing real estate business. However, they can be and should be revised to reflect changes in the business plan or business. This is particularly true of the mission statement because businesses grow, target markets change, competitors leave and enter markets, markets fluctuate, and the overall economy rises and falls. As a result, real estate professionals may need to revise their mission statements to reflect these factors.
Learn More About Starting a Real Estate Business
Do you want to learn more about starting your real estate business? WebCE has you covered! You can order our online course Planning and Growing a Real Estate Business today! Designed by industry experts for serious real estate professionals, this course provides a blueprint for developing a workable business plan and using that plan to create a lucrative, sustainable real estate business.
If you’re ready to invest in your business and career, WebCE is here to help! We offer a comprehensive catalog of online real estate courses. To order courses, you can visit our Real Estate CE catalog or use the buttons below.