“ If you don’t know where you are going, every road will get you nowhere” Henry Kissinger
BUSINESS PLAN - WHAT, WHY, HOW?
According to a Harvard Business Review (HBR) study of almost 3,000 business owners, companies with a business plan have 75% more chances to grow and succeed. Why? A business plan is a tool for understanding how your business is built and put together. It helps you monitor progress, hold yourself and your team accountable, and implement new ideas. With the new year approaching, now is the perfect time to start working on a business plan of your own. So let’s get into it:
What is it?
A business plan is a written document that captures the future of your business. It details what you plan to do, how you plan to do it and the finances you’re going to do it with.
Why do we need it?
A business plan is a map for the road to success and enables you to grow your business instead of managing it as you go.
How to create it?
Have a goal. Separate priorities. Develop strategy. Address finances. Split into time blocks. Review regularly.
Here are 10 steps to you help you get started with a strategy for the coming year:
1. Who are you?
2. What do you do?
Establish your niche! It’s impossible to be an expert in everything. Think about what you (and your team if you have one) are good at, what you are passionate about, and what the market needs. The overlap of these categories is your answer! Is your niche a specific neighborhood in the city? Is it a type of property? Figure out what needs to be done to become an expert in this area. If you’re part of a real estate team, you’ll also use this section to define the roles of each member. Identify what everybody brings to the table so expectations are clear.
3. How can we find you?
Once your niche is established, you can update your online marketing plan. Pick a social media channel you are comfortable with and work on it. You don’t have to be on all of the social media channels (Facebook, Instagram, etc) but be present at the one you pick. Post regularly and provide quality information to the public. By doing so you’ll have more chances to get new leads and establish your reputation as an expert. Put together a list of activities on social media that you are realistically capable of delivering. Break it into yearly, monthly, weekly, and daily activities and put it on the calendar for reminders.
5. Keep up with your competition
Let’s be realistic. There are other people that do what you do. Are they better at it? It’s good to understand your competition. Check them on the web and social media. Compare statistics regularly to check on your progress. Observe in real life and see what you can learn from them and what you can do better. Network and cooperate with your competition. It will help you both make this marketplace better. Stay current in your marketing approach.
6. Nourish your database
7. Education & collaboration
Attend educational courses on business practices, technology tools, ethics, and professional methods.
Put aside a budget and time for education. Volunteer for your local association, share your knowledge, help create a better business environment for all real estate practitioners.
8. Conduct an analysis
Strengths & weaknesses, opportunities & threats are common categories in business plans. These are especially important for real estate practice. Each quarter, evaluate each of these categories using what you’ve discovered about yourself and your business. Then, combine that knowledge with what you know about yourself and how you work.
For instance, maybe you are strong in the analysis (strength) but weak in getting on the phone (weakness). Maybe there is no brokerage firm that focuses primarily on a certain neighborhood (opportunity) or your target market is new construction and there is a construction slowdown forecasted (threat). This kind of analysis is a great tool to have even after your real estate business plan is complete.
Make sure you are aware of financial situations and have strict discipline. Keep your personal and business finances apart. Make it a habit to put 20%-30% of your commission/earnings back into your business. This way when the next marketing project is due or you hire a new employee, you will be ready for it.
Evaluate the ROI (return on investment). Analyze which business activities are bringing more results and reinvest there. Examples: Internet ads, photography/video, open house, hiring office manager, etc.
10. Revisit your business plan
Your real estate business plan is a living document, not something carved in stone. Check-in once a quarter to see if the strategies you chose are really working. And if not, try something different, something new, and measure the results again.
Have a successful year ahead!