So, you earned your real estate licence and are interested in starting a business. There are some elements you should consider before jumping in. Here are nine things you should know before starting a real estate business.
Congratulations! You’ve decided to open up a real estate business of your very own.
But, starting your own business is not as easy as getting business cards printed. There are a few things you need to learn and consider before opening up shop.
Unsure of where you should begin?
Don’t worry, we have plenty of tips to help you get on the right path.
Here are nine things you should know before starting a real estate business.
1. Understand Your Financial Situation
Remember the old adage, it takes money to make money.
Starting a real estate business is the same as starting any other business. Before you can start raking in the big bucks, you’re going to have to drop a lot of cash when you first start out.
From buying investment properties to getting business cards printed, there can be a lot of heavy costs that come with dealing in real estate.
And while you don’t need to spend an arm and leg to start your business, you won’t regret having that savings cushion under you when you first get started.
The best solution to this problem? Begin saving as soon as you can.
Once you figure out how much you’ll need to get your business off the ground, set financial goals for yourself.
Remember to calculate your cost of living into your savings plan. You may not be able to rely on a steady income in the beginning.
2. Do Your Homework
If you’re already a practicing real estate agent, you probably already have a solid understanding of your local real estate market.
But, if you’re new to the game, you’ll need to do a lot of homework.
Are you in a decent high demand location? Are there any legal aspects you need to know about? These are a few of the questions you should ask yourself before opening for business.
Housing market aside, you’ll also need to look into any and all competition in the area. Remember, it pays to know your enemy.
Who is your competition? What are their specialties? What aspects of your business could give you an advantage over them?
Once you feel as though you know all there is to know about the real estate market in your area, then you can begin building your business to suit it.
3. Create a Business Plan
Behind every successful business is a steadfast business plan.
First, you’ll need to determine what your business structure will be. Different rules apply to different types of business. So, it’s important to decide early on whether you will be the sole proprietor or if you’d rather a general partnership.
Next, you’ll have to determine your budget. This can be tricky for real estate companies as you’re income may not be as stable early on.
When creating your budget you’ll need to determine how much you’re going to spend on marketing and operational expenses.
Depending on what size company you’d like to start out with you’ll also need to factor in other costs such as office rent and internet and phone services.
Finally, if you’re going to hire employees right off the bat, you’ll need to figure out your business’s internal structure. This means determining a structure for commission and referral fees.
4. First Impressions Matter
Appearances are key. If your business looks good, potential customers will be more willing trust you when it comes to buying or selling a house.
This is why it is so vital to invest in your new real estate business’s branding.
You’ll want to create effective marketing materials that project a professional and unified image. This way your customers will be able to see what your business is about.
When it comes time to create your marketing materials, you may want to consider hiring a graphic designer. This will ensure the best and most effective designs.
5. Gather the Best Tools
If you’re already a practicing real estate agent you’re likely already familiar with the tools of the trade.
Before you can open your new real estate business, you’re going to want to make sure you have all the tools you need.
In the world of real estate, these tools may include a property search website and an investment property calculator.
6. You Cannot Do Everything
We would all like to be self-sufficient. With that in mind, you should never perform brain surgery on yourself.
When you’re starting a new business, it’s usually best to focus on what you know and let professionals do the rest.
Whether it’s designing your website or taking care of the books, if you feel like a job is too far out of your element, try to pass it off to someone else.
Hiring out offers another often overlooked perk. If you contract local companies to assist you in setting up your business, there’s a chance they will return the favor.
7. Be Picky About Who You Hire
Starting your own business is not the right time to do anyone any special favors. Especially when it comes to hiring.
The first few years of any business are crucial to that company’s survival. So if you’re planning on hiring employees right off the bat, you need to make sure they’re the absolute best people for the job.
A good real estate company needs successful and experienced salespeople, so try to avoid hiring too many newbies for the first five years or so.
8. Find Memorable Ways to Thank Your Clients
Clients are the lifeblood of any real estate organization. And it pays to let them know how much you appreciate them.
Move-in gifts or referral thank you’s may seem like small gestures, but they can make a big difference to your clients. And, odds are, they’ll continue to push more business your way because of them.
9. You’re Going to Need Patience
So you’re all ready to open up shop. Well, don’t expect customers to come pouring in as soon as you turn your “closed” sign around.
Real estate isn’t exactly fast-paced. Especially in the early days of a new firm.
It’s going to take a while for you to get your name out there. But, if you keep at it and treat all your customers like your first, you’re business will be booming before you know it.
You don’t grow into a company like JP real estate experts overnight.
Starting a Real Estate Business
It doesn’t matter if you just earned your license, or you if you have several years of experience under your belt. Starting a real estate business can be a major step toward a more lucrative career.
Ready to branch out and start your own business?
We have dozens of resources available to help new businesses get started no matter what market they’re in.
Contact us today so we can help you get on the path to becoming a real estate business owner.