Plan to Succeed
Ever notice how some new licensees seem to make fewer false
starts than others?
Old timers in the business are often astounded by the ability of some newly
licensed individuals to generate business, learn the necessary computer
programs, and generally get off to a much faster start that they did back in the
day. What do these early bloomers know that
the rest of us did not?
Today’s new licensees know they have to hit the ground
running if they are to survive. Gone are the kinder, gentler times when the
relatively
low cost of getting and established in the real estate business provided a
fairly long period of time in which newbies could find their ideal market. Many
of today’s industry leaders will admit to less than stellar beginnings, and
twenty years ago it was possible for newcomers to survive a three or six month
period without generating much income.
The thought of today’s newcomers taking such an extended
time period to become profit centers strikes terror into the hearts of brokers
who are faced with mountainous operating costs. It is equally as frightening to
the newcomers themselves who are also faced with the high costs of becoming
licensed and establishing a clientele.
Most successful brokers have developed business plans that
optimize their resources and minimize their risk. Salespersons, however, seldom
think of themselves as a business and it follows that they do not envision the
need for a business plan. When it’s necessary to generate a good
bit of income in a relatively short time in a business that is largely unknown
to the worker, having a business plan might be a very good thing.
While all business plans tend to have similar areas of
concern, each salesperson should develop a plan that is personalized to his/her
own resources and goals. Answering the questions below realistically and
honestly will result in the beginnings of a business plan.
Keep in mind that a business plan is a work in progress
that will never be perfected. Individuals grow in experience and knowledge
and change interests market conditions change. Business plans should reflect
all changes. The most important feature of a good business plan
is flexibility.
1.
Can You Describe the Business You Want to Cultivate?
It is impossible for a person to succeed over a long time
period in a business that he/she does not understand. Almost all practitioners
begin using the scattergun approach – taking their best shot at all available
business and hoping to hit on some. The scattergun approach to real estate
sales has the advantages of being intuitive and traditional, but it and real
estate sales careers lose appeal when no income results.
Each salesperson must develop a clear picture of the
business he/she will pursue and the efforts it will take to make that
business happen. Failing to grasp that essential of the business may be the
factor that contributes most to the eighty-five percent failure rate of
newcomers within the first two years of licensing.
Clearly defined work and reward goals should be
formulated. There is a reason that work and reward are considered together;
without work rewards will not be realized, and without rewards work becomes
meaningless. With this relationship in mind, a salesperson should identify the
rewards desired and make a realistic assessment of the work that will be
required to attain the reward.
For example, if the reward desired is achievement of a
certain sales production level, then the work description should include daily
or weekly estimates of the specific jobs that will have to be done in order to
hit the level. Salespersons wanting to achieve a specified sales production
level without work plans for making it happen are involved in a business
fantasy, not a business plan.
The great coach and motivator, Vince Lombardi, said that
luck is what happens when preparation meets opportunity. Most successful
practitioners in any field report that the harder they work, the luckier they
get, and the real estate sales field is no exception.
2.
How Will You Market Yourself?
Identifying the type of business to be pursued and the
time, effort and resources the pursuit will require lay the foundation for a
marketing plan. A workable marketing plan always begins with identifying and
locating the target population from which clients and/or customers will be
selected.
Since it is possible to convert customers to clients,
pinpointing sources of customers is the most logical starting place. The
tried-and-true methods for locating customers dictate that salespersons wishing
to sell residential property will probably have good luck locating buyers
through such activities as holding houses open and attending first time buyers’
seminars while if selling commercial property is the salesperson’s choice,
he/she may have better luck at meetings of civic organizations. Obviously,
salespersons who generate original sources of customers are a step ahead of the
competition, but working the conventional sources while waiting for inspiration
is more productive than just waiting. As long as no laws are broken and ethics
remain fairly high, where customers are found should be between the customers
and the salesperson.
Once customers are found the second part of the marketing
plan, finding salable properties, comes into play. Newcomers may not
have a large number of personal listings to offer buyers. Luck and pluck and
not too much knowledge are often easier to sell to buyers than to sellers.
After all, the sellers have already experienced at least one real estate
transaction and may be wary of licensees who have not. Members of multiple
listing services are able to offer to prospective buyers all listings of all
brokers belonging to the same service.
If a broker insists that new salespersons must at least try
to capture listings, there is no better bait than the availability of a group of
qualified buyers located through the licensee’s prospecting efforts. (Note: many
agents choose not to represent both buyers and sellers. Those who choose
to represent only buyers are known as Exclusive Buyer Agents, or EBAs)
Having located sources of both qualified buyers and salable
properties the last ingredient of the marketing plan, personal marketing,
enters the scene. Personal marketing plans come in as many forms as there are
individuals on Earth. A personal marketing plan can be as simple as a letter of
recommendation or as complex as the major promotional efforts required to elect
a politician. Whether simple or complex, the principal requirements of any
personal marketing schemes are that it be legal, ethical and that it must work.
Everyone who wishes to succeed in real estate sales must be
involved in personal marketing at all times. This means that every single
contact with another human being whether face-to-face or through a distance
contact medium such as telephone, fax, email or social media is a personal
marketing situation. Successful real estate salespersons understand this and
accept that they must put their best foot forward in all public and semi public
places. If your personal brochure has a photo of you flashing a giant smile, you
must also smile at two am when you are in the express checkout at the
supermarket clutching lunchmeat for the next day’s lunches. While within your
target market you will never again know the luxury of letting it all hang out,
and with Internet access available to all buyers and sellers a good part of the
world is your market!
3. Is the Competition for Business Fierce?
Sure it is. If real estate sales were easy, everyone would
be doing very well. Instead, about twenty percent of the sales force is doing
about eighty percent of the business. To become part of the twenty percent
rather than the eighty percent requires plenty effort and creative use of
resources; luck doesn’t hurt, but it is foolish to bet your future on it.
The smart newcomer will devote the necessary time to
studying the competition, noting what the heavy hitters do to distinguish
themselves from the crowd. The really smart ones know that doing exactly what
the superstars do will only make them pale imitations. Studying many high
achievers rather than focusing on one will almost surely lead you to the
realization that while they have some things in common they also vary widely in
others. One common characteristic is that they are extremely hard working and
persistent. Ways in which they vary are infinite. In fact, the one way in
which the infinite variety among superstars is always the same is that they have
found ways to use their unique characteristics for effective networking.
When you’re brand new at the game it may take a while to
realize which of your unique characteristics will help you make the giant leap
from mediocre to stellar. This time is best used to develop the strong work
ethic you will need when you do discover yourself. Don’t be too surprised if
hard work and persistence are enough to set you apart from the rest of the
“medium” hitters! Your chances of finding a client are much better at an open
house than in the break room in your office – no one there is going use your
services to buy or sell anything.
There’s No One to Tell Me What to Do! Hooray?
When real estate brokers are in recruiting mode they often
flatter prospective new hires by observing that they look like real “Self
Starters.” When brokers and motivational speakers use the term “self starters”
what they really mean is that there will be no direct supervision, no guide book
to tell you where to find business and no one to tell you when to start and stop
working. To many wage slaves that sounds like the good news, and to a certain
extent it is. There will definitely be no hovering boss telling you exactly
what to do every minute of the day. There will also be no one on hand at the
moment to tell you how to avoid trouble and what to do when you find yourself in
it with both feet. Keep in mind the old sales rule of thumb – if you’re not in
trouble with somebody, you’re probably not networking a large enough consumer
pool.
So what do you do when you find yourself in need of
information, support, gratification or a couple of aspirin? Take a page from
the local undertaker’s book and face up to these unpleasant facts on a pre need
basis. Always be on the lookout for folks in the business who handle adversity
with style and/or grace. Be very nice to those folks. Do as many favors for
them as you can. In your time of need at least one of them will be able and
willing to help you out.
This is a single process that you can have in place for
trying times. It is also a good idea to have in place processes for handling
contracts and all the various documents created by real estate transactions.
You should have a process for: keeping on hand all the blank contract forms you
might need, contact information for potential clients and customers, contact
information for networking, licensing documents, and so on. If you have no
processes in place you will spend a huge portion of your time and energy
searching for people and/or paper. This is time that is much more profitably
spent networking for buyers and sellers.
You may have the great good fortune to belong to a REALTOR
association that offers online contracts and other transaction documents. If
you are so fortunate, please do not rely on anyone other than yourself to back
up your computer memory. Large gigabyte flash sticks and external memory drives
are available and inexpensive. I recommend using both for what the detail minded
call double redundancy. It is extremely unlikely that all saved documents will
disappear into the ether at the same time.
4. Can I Afford This Job?
That actually should be the first question rather than the
last, and only you can answer it. If you haven’t already made this discovery
you are about to learn that it can be very expensive to be in the real estate
business when you’re not generating income. Before quitting your odious and
hated job to go into real estate, you should have made a detailed list of all
the costs you’d have to bear in your first six months. Any ethical, honest and
competent broker will be able to give you a list of the business expenses you
will have to bear, and you will have to make an honest list of personal
expenses. To the total of those costs you should add the income you will lose by
not having your salaried position. Note: you may want to have a brown bag handy
if you tend to hyperventilate.
If you can’t afford to cover all your costs without income
for several months you might want to re-think going into real estate sales on a
full time basis. Many successful real estate salespersons began their careers
on a part time basis. In fact, one of the best sources of clientele for the
newly licensed salesperson is fellow workers at the old job and you will be
harder to overlook if you are there every day. The stress level in the business
is always pretty high and adding money worries is almost always a recipe for
personal disaster.
That’s the bad news. The good news is that if you work
very hard and very smart for thirty days in a good market you have an excellent
chance to bring home a commission from one transaction that is greater than a
whole month’s pay at the odious, etc. job you quit. When market conditions are
less than good you will have to work longer and harder, but sales are still
being made and you will not have the handicap of having sold properties in the
past to current sellers for more than they are presently worth. To quote Coach
Lombardi again, the only place where success comes before work is in the
dictionary.
I Think I Can!
If you find that you can afford to attempt a real estate
sales career you might just find the life you’ve always dreamed of. No, you
can’t actually make your own hours unless you stumble on the only clientele in
the history of the world who value your time above theirs, but someday you may
be able to hire an assistant (or several) to work some of the hours (and
clients) you’d rather not.
In tough market conditions you will work harder and earn
less, but you will be getting a street-level education that licensees who began
their careers in better times will be learning right along with you.
Real estate sales is not a career for the faint of heart,
nor is it for those unable to bend goals and procedures to fit the available
business. For those flexible individuals who are able to locate sources of
business, are willing and able to make any deal available to be made with anyone
buying and/or selling there will always be something to sell someone. With a
real plan all things are possible.
The time to start is now!
My Real Estate Business Plan Outline (Sales Associate)
$10
