Are you finally going to take the leap to start your own real estate brokerage?
You need to have a real estate brokerage business plan to map out your path to success. You might think that you have all of the ideas in your head, so that’s enough to start your new venture.
Believe it or not, businesses that have a written business plan are much more likely to be successful than ones that don’t. You want to make sure you give yourself every chance to have a thriving business.
What are the steps to create a solid business plan for your real estate firm?
Read on to find out.
1. Get Your Vision on Paper
Before you start writing the formal business plan, take the time to write down your vision for the real estate brokerage. Where do you see it in 5 years? 10 years? How do you see the business scaling up?
You should also write down the mission and the vision for your real estate brokerage. These will be necessary to have in your business plan.
You also want to think about how your business plan will be used. That will determine how formal it needs to be. If you’re using this to get a loan, lenders want an in-depth formal plan.
2. Do Your Research
Research allows you to understand what is happening in the real estate market now and where it’s going to go.
With your real estate experience, you may know the general sales numbers inside and out. You need to know your competition and where they’re positioned.
Out of your research, you should have a clear idea as to how you want to position yourself in the marketplace. For example, you may see high-end condos going up in the downtown area. You can position your brokerage to be the high-end condo expert.
3. Target Market
Who do you plan to market to? Don’t say anyone who wants to buy or sell a home.
Are there companies building in the area that are attracting new jobs in the area? That may present an opportunity to be a relocations specialist.
It’s good to pick a certain demographic and market early on in your brokerage. You’ll become the go-to person in that niche, whether it’s for relocations or first-time home buyers.
As your business grows, you can expand into another area and become the expert there. Once you have a foothold in that market, you can expand into another one.
In the early stages of writing your real estate brokerage business plan, you want to use your research to see the growing trends in the marketplace and spot the opportunities to choose the right demographics to sell to and the types of homes they’re looking for.
4. Company Background
The company background outlines the basic information about the company, such as the legal structure and where it’s registered. In this step, you’ll want to note how you plan to obtain your brokerage license, such as getting a real estate brokerage sponsorship.
5. Competitive Analysis
You did research on your competition, now is the time to write about what you learned. Take your top two competitors.
In this step, write about their level of experience, how they market themselves, how many agents work at the brokerage, specialties, and social media activity.
6. Do a SWOT
Every single business has a certain level of risk when they start. You need to uncover those risks before you sell your first home.
A SWOT analysis stands for strengths, weaknesses, opportunities, and threats. You look at your internal and external strengths and weaknesses that would impact your business.
7. Create Spreadsheets for Financials
This step can be tedious, but you can’t afford to skip it. You need to know where you stand financially as you begin your journey.
You’ll have to gather your startup costs, including everything from printer supplies to office furniture. That will go into your startup expenses spreadsheet.
You’ll then create another spreadsheet with all of your monthly costs, such as rent, utilities, and commissions payments.
Other spreadsheets that you should have are profit and loss projections, revenue projections, and a breakeven analysis.
Your projections are going to be based on certain assumptions, like the economy in Texas will continue to strengthen over the next 5 years. Make sure you note all of the underlying assumptions you base your numbers on.
8. Have a Sales and Marketing Plan
A marketing plan will detail how you plan to get clients in the door. In your marketing plan, you’ll want to address your main marketing messages, who you’re trying to reach, and how you’re trying to reach them.
You can add your sales strategy to the marketing plan, which will demonstrate how you and your team will close leads, and how many clients you expect to have.
9. Write the Executive Summary
The executive summary is the first page of your business plan. It’s also the thing that should be written last.
This tells the reader a little bit about your company, the corporation structure, and the basic operations plan. You’ll have bullet points that sum up the most important points of the business plan.
You want to get this section right for two reasons. The first is that you’re setting the reader’s expectations. If you’re using the business plan for loans or investment purposes, you want the reader to be interested enough to keep reading.
Putting Your Real Estate Brokerage Business Plan Together
A real estate brokerage business plan is a critical step in getting your brokerage off the ground. Not having a plan or understanding the market before you open your doors is a huge risk. You learn a lot about the market by going through this process.
The steps listed here are the main components of your business plan. If you plan to use your business plan for a loan, you’ll need to make it a formal document. If it’s for yourself or your partners, then you can make it less formal. You still need to do the research and make it organized.
Are you ready to start your own brokerage? Sign up for a brokerage sponsorship plan today.