Starting a commercial real estate brokerage?
Want to make sure your business becomes a success?
When starting a commercial brokerage it’s important that you know exactly what you’re doing and that you have the skills to run it effectively. You need to keep every aspect of the business in mind and make sure you’re not forgetting any important tasks.
Luckily, we’re here to help. Below we’ll look at the top 8 tips you need to know about when running a commercial real estate brokerage.
1. Determine Your Financing Plan
When you’re running a commercial brokerage it’s important that you create a great plan for financing your business.
First of all, you need to do the necessary work to find out what your operating expenses will be. Decide how much you need and make sure to factor in both startup costs and ongoing expenses. Know what it will cost your brokerage when it comes to advertising costs, errors and omissions insurance, office supplies, and other expenses.
You’ll also need to decide if you’ll be bootstrapping your business and self-funding it or if you’ll need to take out a loan to start your brokerage. In many cases, taking out a small loan to get your business started will be the necessary choice.
2. Make Sure You’re Meeting State Requirements
When starting a real estate brokerage you should also be ready to meet all of the legal requirements for your state. In the state of Texas, for example, you’ll need to make sure you have a real estate license.
To get started, you’ll probably need to take some required educational courses, meet certain state work requirements, and pass a broker’s exam as well.
It’s important to check with the specific state that you’ll be operating in to make sure you’re meeting all of the different legal requirements. States vary somewhat in what will be required to start a brokerage, so do your research early on.
3. Write a Business Plan
It’s also important to have a solid business plan when running a real estate brokerage firm. By having a solid plan in place you’ll have direction and won’t be leaving your business success up to chance.
Creating a business plan can help your business keep track of how it stands in the market and help you monitor your progress. Doing this extra planning can be invaluable as you move your brokerage forward.
Be sure to include a mission statement, a company summary, and a market analysis in your business plan. Also, use a SWOT analysis to analyze your strengths, weaknesses, opportunities, and threats.
4. Choose Your Legal Structure
One of the most important things to think about when starting your commercial brokerage firm is to decide what legal structure it will be under. Make sure to register with your state as soon as you know what structure you’ll use.
Usually, the best choice is to structure a real estate brokerage as a limited liability company (LLC). However, in some cases, a partnership, sole proprietorship, S corporation, or C corporation may be an option as well.
In addition to having errors and omissions insurance, an LLC can give you some extra personal liability protection. An LLC can also create more flexibility when it comes to paying taxes.
5. Get Ready For Recruiting
When running a successful commercial brokerage you should also have a good strategy for recruiting. Many business owners underestimate how difficult it can be to find reliable workers and staff when it becomes time to expand.
When hiring new employees, it’s important to have high standards and to be clear with what you’re looking for in an employee. Be sure to screen your applicants thoroughly.
However, once you hire great employees your job isn’t over. You should also have a plan for cultivating their skills and increasing their loyalty to your business. A generous commission structure is one thing that can help.
Additionally, you should also make sure that your company is one that employees will be proud to work for. Make sure they know that you value their support.
6. Use the Right Software
To run your business successfully it’s also important that you create and implement the right systems that can help you get things done and keep your business moving forward.
Investing in the right automation software and tools can help you manage your business actions and easily keep track of client relationships. Look around for a great real estate CRM that can help you manage your business and automate tasks. Doing so can help keep your business running smoothly while leaving plenty of manpower available for more difficult tasks.
7. Professionally Market Your Business
Once you’ve launched your commercial brokerage firm you also need to remember that your job isn’t done. You need to have a way to market your business and continually get new contacts and clients. Look for ways to increase brand awareness and to reach out to your local community.
These days, internet marketing tactics can be very helpful. Using search engine optimization (SEO) and pay per click (PPC) advertising can be very helpful or getting new clients to your website. Social media marketing, email marketing, and mobile marketing techniques can also be a big help when marketing your firm.
Whatever way you decide to handle the marketing for your business, make sure you stay on it. Make sure that you’ve added marketing costs into your monthly budget.
Successfully Growing and Running Your Commercial Real Estate Brokerage Firm
With a little bit of work and a lot of great planning, it’s more than possible to create a commercial real estate brokerage that becomes a quick success. Make sure to use the tips above if you want to have the best chance of effectively running your real estate brokerage.
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