The topics that are covered in the Michigan Real Estate Exam involve the laws, ethics, and practice of real estate. Unfortunately, many agents don’t educate themselves outside of these topics, including how to run their businesses. As most real estate agents work as independent contractors, setting business goals and managing the day-to-day operations falls on them.
As a new or established agent, one of the best things you can do for your real estate business is to treat it as a business. That means coming up with a clear set of business goals and strategies to achieve them. Here are some steps you can take to get started with your business plan:
The first step in writing a business plan is to define your business’s mission by writing a mission statement. This may seem unnecessary at first but taking the time to clarify your mission will help you move forward in the planning process. The goal of the mission statement is to describe what your business does, and how and why it does it.
Are you more interested in residential or commercial real estate? Perhaps you prefer working in the luxury market. If you are just starting out, it may be best to keep these preferences broader and revisit them in a few months. Keep in mind that your business plan will continue to evolve with your business.
The answer to this question could include what currently differentiates your business from others, and the direction you’d like to take in standing out from the competition.
Think about what needs your business meets and how when trying to answer this question. Why does your business exist?
Consider the values of your organization as well as your personal values.
As you start thinking about the what, how, and whys of your real estate business, your target audience will begin to emerge. What market segment will your business serve? Are you looking to target first-time home buyers, the luxury market, retirement homes, or perhaps you want to specialize in condos? Whatever audience you select, make sure to keep an open mind as you may realize down the road that there are different opportunities and better-suited audiences for your business.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis involves examining the strengths and weaknesses of your business and coming up with opportunities to capitalize on those strengths as well as strategies to overcome the weaknesses and threats. Ideally, your SWOT analysis should be repeated annually to reflect the changes in your business as well as the real estate market.
Once you complete your SWOT analysis, your business goals will begin to emerge. Think about the future of your business and set goals for the near and far future. For example, where do you want to see yourself in the next 6 months? And, how do you plan on getting there? When setting your goals, make sure that they are realistic and achievable. Of course, every new agent would want to be the top producer in their company, and that could be your long-term goal. But setting your goals too big in the short term can leave you without a clear strategy or path, and cause you to give up. Setting smaller goals on the path to achieving larger ones will help keep you focused.
The goals you set should also be measurable and time-bound. Clearly define when a specific goal should be achieved by. You can even implement checkpoints (e.g. halfway or quarter-way through) to keep track of your progress.
After identifying your goals, the next step is to come up with a strategy to achieve them. Consider breaking down your goals into smaller steps and identifying the strategy for each step. This approach will make it easier to create a clear path to reaching your goals. Also, be flexible in your strategy. Things may not pan out exactly the way you plan them the first time. Editing your strategy from time to time is a good thing and not a failure on your part.
When you are in charge of every business decision and outcome, it can be difficult to keep yourself accountable. Make sure to set deadlines for accomplishing the tasks and goals in your real estate business plan. If you have or end up hiring employees, deadlines will also help them to stay on target. When you are running your own business, short-term tasks tend to take priority over long-term goals. For example, if you have contracts to draw up or listings to upload, those tasks tend to get prioritized daily. Although these tasks are very important, they shouldn’t overshadow longer-term tasks and projects. You can try time blocking to remain focused on the big picture.
Determining your financial needs is one of the most important parts of any business plan. After all, your business must make money to be successful. You will need to identify your financial needs, your projected income, expenses, and costs. Keep your needs and projections realistic and revisit your goals regularly.
Once you have a clear mission, business goals, and strategies, it will become much easier to come up with a process to achieve your goals. Your business plan and processes will continue to evolve as you learn and gain experience. The needs of your business will also look different one year or even six months down the road. This is why it is so important to revisit your business plan and keep an open mind in identifying new opportunities. Don’t be afraid to change your strategy as there is no one straight path to success.
As a real estate agent, you are the most valuable asset of your business. Investing in your professional development and knowledge is an important step to success. When you are selecting a real estate school for your continuing education classes, choose NCI Associates for a superior learning experience. NCI's unique, custom-written Continuing Education course delivers real-world, agent-centered, and practical information. All of the topics are covered from a Michigan-specific perspective. Our instructors are highly qualified and highly recognized in the real estate industry as trusted and reliable sources of information. Read our testimonials and watch this video to find out why our students keep coming back year after year to take NCI’s CE classes.
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