When Shayla Twit started her real estate career in 2002, she knew a financial game plan was essential to her success. “I saved up, so I would have a cushion when I started,” said Twit, a sales associate with Coldwell Banker Residential Real Estate in Sarasota. “I also had a second job waiting tables until my commissions started coming in.”
Paying close attention to your finances is one of the key steps to building a successful real estate business, according to California-based national trainer and coach Tom Ferry. “The first thing any new agent must do is create a business plan,” he says. “The biggest mistake you can make is approaching this business free-form. You need to know how you’re going to generate business and the actions required to make your plan work.”
Here’s a closer look at how to succeed with your finances and the other key steps in growing a successful business.
1. Manage Your Finances
If you’ve never prepared a business plan, now is the time to start. It will be your navigation system guiding you toward your destination. Because it usually takes time to generate income from a new business, you will rely on your financial reserves and other sources of income until the commissions start rolling in.
• Calculate Income and Expenses. “For example,” says Ferry, “what is your monthly cost to run your household? Rent, mortgage payment, kids, dogs, food, dry cleaning, everything you spend money on—get that number. Let’s say it’s $24,000 a year.”
Next, list the expenses you expect to incur to get your business going, such as legal services, marketing tools and technology purchases. “Add in the work expenses, say $8,000 a year, so a total of $32,000 a year you need to survive. How much outside monthly income do you have (spouse income, rental unit income, etc.)? Subtract this number. Now, you know how much you need to earn.”
• Review Your Plan Regularly. “One mistake I made starting out was being afraid to spend money,” says Twit. “But I’ve learned and updated my business plan through the years based on my goals and market conditions.”
• Visit a Professional. As part of your business plan, you should contact an accountant and attorney to find out how to organize your business. For example, should you register as a professional association (PA) or as a professional limited liability corporation (PLLC)?
• Breakthroughbroker.com: Search for marketing and business plan templates that you can use.
• Florida Realtors® Take 5 videos: Search for videos on tax structure and professional associations. Visit floridarealtors.org/videosforlearning.
• Placester Real Estate Marketing Academy: Search on “The Ultimate Guide to Creating a Business Plan.” Visit placester.com.
• National Association of Realtors®: Check out the Starting Your Career (nar.realtor/starting-your-career) webpage, which features a Rookie Tool Kit and more.
• Want a detailed way to calculate your cash flow?
Download Zillow’s free business plan template at bit.ly/ZillowFreeBizPlan
2. Use Your Time Effectively
Succeeding in real estate requires daily discipline. “You need to create your schedule and stick to it,” says Ferry. “I’ve often said, “If it’s not in your schedule, it doesn’t exist.”
• Build in personal accountability. Just as a personal trainer can help you stay on track with your fitness goals, a real estate coach can help you assess your progress and overcome challenges. “Share your goals with your loved ones whose lives will be impacted by your results, or hire a coach to become your strategic partner invested in your success,” Ferry says.
• Create checklists. A good starting point is to prepare daily and weekly checklists based on your business plan. Then, get systems in place to track and measure your activities and results. Create visual scoreboards to make it easy to see your goals and progress, adds Ferry.
• Tomferry.com: Check out his “Hour-by-Hour Plan for a Real Estate Agent’s Perfect Day,” which includes a time-blocking template. (tomferry.com/blog/real-estate-agents-perfect-day)
• The Real Estate Trainer: Use the handy “Top Realtor Daily Schedule” infographic to map out your day. therealestatetrainer.com/2016/03/14/top-realtor-daily-schedule
3. Make Prospecting a Priority
Every day your job is to get employed, says Steven David, president of Florida Professional Real Estate, Inc. in Fort Lauderdale. “If you don’t have a closing or a listing, you’re unemployed. So, to make certain you have a future, set aside time for prospecting every day.”
• Build a database. “Create your database with every person you know, including friends, family members and professional relationships,” says Nikki Ubaldini, broker, Keller Williams Realty South Florida Region in Palm Harbor. “Start with at least 50 and keep going.” Your database might be a simple spreadsheet or a more sophisticated customer relationship management (CRM) system. In any case, keep adding people as you meet potential customers and referral sources, and use your database for ongoing communication.
Reach out to the people in your database and send them a letter letting them know you are in real estate, says Ubaldini. A week later, you can call to ask if they got the letter and remind them.
• Build affiliate relationships. Your first customers are likely to have plenty of questions about mortgages, titles and insurance. You can help them by cultivating relationships with lenders, attorneys, accountants and insurance professionals in your community, says Armando Diaz, president and broker-owner, Ocean View Int’l Realty in Miami. Then, you can refer a buyer or seller to service providers whom you know can help complete the transaction.
• Start a farming program. Spend time each week meeting people in your target neighborhood. Print fliers or mailers. Be sure to mention your farming area on social media sites. As David says, “Memory recall is what you’re after, so meet a certain number of people every day and leave them with a favorable impression.”
• Create campaigns. “Create a drip campaign to keep contacting [your sphere] every three weeks with either snail mail, email, calls or personal visits,” Ubaldini adds.
You have plenty of options for prospecting, such as knocking on doors, asking friends for referrals, making cold calls or building a presence on social media. See what approaches are most effective in generating leads for potential buyers or sellers and track the results.
• Get out of the office. Don’t wait for your phone to ring, says Kathy Betancourt, sales associate with RE/MAX Anchor Realty in Placida. “Real estate is a relationship business, so go out and talk to people in your community,” she says. You could visit a coffee shop and get to know the regulars. Wear a name tag when you shop and strike up conversations at social events.
• Host open houses. A great way for new agents to get business is to host an open house. “That’s how I got my first listing 15 years ago,” says Anne-Marie Wurzel, a sales associate with Core Group Real Estate in Oviedo. “You can help an experienced agent in your office and co-organize the event.” Be sure to get information on every attendee so you can send a personal follow-up note.
• Look for free tools. You don’t have to spend a lot of money to build a presence in social media, says Twit. “You can start marketing on Facebook, Instagram and Twitter for free,” she says. “Don’t let your finances hold you back from prospecting.”
• Be personal. Send handwritten notes, make calls and send texts. “Be genuine with those follow-ups,” says Wurzel. “Don’t be pushy but let them know you’re available to help them.” Ubaldini recommends setting a goal of at least three personal notes per day.
• Real Estate CRM Comparison (softwareadvice.com/crm/real-estate-crm-comparison) for reviews of different platforms.
• Fit Small Business’s Guide to Real Estate Prospecting: fitsmallbusiness.com/real-estate-prospecting-tips/
• Real Estate Uncensored Videos: Check out “Real Estate Prospecting Tips + Strategies” and “Live Prospecting and Lead Generation.” Youtube.com channel Real Estate Uncensored
4. Commit to Learning the Business
Education is vital for new agents, according to Diaz. “What you learn in real estate school is only the beginning,” he says. “You need practical, real-life experience in working with clients.” If you’re starting out, talk with brokers or managers about educational opportunities before deciding on a company.
Make a commitment to keep learning throughout your career. When Ubaldini started in real estate, she attended classes on real estate, business and personal mindsets. “We also always implemented at least one thing we learned immediately after every class,” she adds. “We have never stopped investing in ourselves and we are to this day still attending classes on a regular basis.”
• Know your market. You can get an edge on your more experienced competitors by becoming a local market expert, says Wurzel. “Look up every sale in your area for the past six months and carry a printout with you. It shows your market knowledge and reminds prospects that you can access more information for them.” For detailed housing market reports, price index reports and more, go to floridarealtors.org/researchand
• Find a mentor. Ask your broker about finding a mentor—a manager or veteran sales associate who can answer your day-to-day questions. “This is important for every new agent,” says Diaz. “When it’s time to write your first sales or listing contract, for example, you need someone who can advise you on the wording.”
• Shadow a top producer. Another great learning option is to shadow one of the company’s top producers. “Don’t be afraid to ask a veteran agent if you can tag along, says Ferry. “You’ll learn much faster this way than constant trial and error on your own. Do the same with your marketing. When you see something that works for others, borrow it.” To compensate the veteran agent for this time, create a written agreement to share commissions on a set number of sales.
• Join a team. This is another way to learn about real estate transactions, assisting buyers or showing listings. You also gain the satisfaction of contributing to your team’s success, says Twit.
• GRI education. Earning this designation will give you the knowledge you need to build a business that thrives no matter what the market. Go to floridarealtors.org/Education/Courses.
• NAR Education: nar.realtor/education for books, designations and certifications to boost your industry knowledge.
• Florida Realtors® Take 5 videos: floridarealtors.org/videosforlearning for videos that offer peer-to-peer training advice.
• The Brian Buffini Show podcasts (thebrianbuffinishow.com): Educational podcasts for new and veteran agents.
Summing up her advice for new agents, Twit says be prepared to put in long hours and hard work before seeing financial results. “There are very few overnight success stories in our business,” she adds. “Treat it as a marathon, not a sprint, and the rewards will fall into place for you.”#
Richard Westlund is a Miami-based freelance writer.