Recent real estate news has been awash with articles proclaiming the cooling of Canadian markets and the overall state of the country’s real estate market. Should REALTORS® be worried? This is not a question that will be addressed here. I defer to the experts. What REALTORS® should be is prepared, especially if they are new to the profession.
Being prepared means having a business plan, which should set out objectives (both short-term and long-term), and the strategies and tactics on how to achieve them.
The following illustrates the six-step approach in preparing a real estate business plan.
Step 1: Assess your income needs
Make a listing of your living and business expenses to determine how much income you will need to generate annually.
First, pick a reasonable about of income. Start with a conservative goal and be realistic. This is especially important if you are new to the profession. Then, determine how many properties you will need to sell in one year to meet your financial goal. To do this, you need to do research: review reports on real estate trends published by banks, other financial institutions, and brokerages; and seek advice from colleagues in your brokerage (manager, other salespeople).
For example, if you want to achieve two listings per month, how many people must you call to secure those listings? Or, if you want to earn a certain salary, how much will be required each month and how will you achieve that amount?
Step 3: Translate prospecting initiatives into sales goals
Select the type of prospecting you will use to find potential buyers and sellers. Examples of prospecting initiatives include:
• cold calling [Please note: Do not contact anyone on the National Do Not Call List (DNCL). For more information about the DNCL, go to https://www.lnnte-dncl.gc.ca/index-eng.]
• converting For Sale by Owners (FSBOs)
• working a geographical area/farm [Choose a target market and position yourself as an expert in the minds of buyers and sellers in the market.]
• working another salesperson’s open house
• working expireds [Please note: refer to the listing to determine if the seller has consented to being contacted after the listing expires.]
• working personal contacts
Step 4: Create an action plan
Create a detailed list of items you must do every day, and do them. Your action plan will keep you focused on primary money-making activities that will put you face-to-face with potential buyers and sellers.
Consider the following when creating your action plan:
• how much money you need to make
• types of properties you sell (commission per property)
• types of prospecting you do
• how many hours a day you work
• how many days a week you work (including weekends)
Step 5: Put money aside
As there is no such thing as a regular paycheque, for every commission you receive when a deal closes, put aside a specific amount of money into a separate bank account. Doing this will help you stay focused on reaching your earning goal.
Step 6: Review and revise
Review your performance to determine if you are meeting your projected income. If not, revise your action plan. In addition, your action plan should allow for changes in circumstances.
For More Information
For more information on business plans and how to successfully transition to the world of real estate trading from the classroom, consult our A Mentoring Kit for New Salespeople: Training For Success – http://www.orea.com/OREA-Real-Estate-College/Learning-Tools/Training-for-Success-Mentoring-Kit. This is a valuable resource for both brokers and salespeople.