Building Your Real Estate Business Plan: Insights from Seth Price
By Matthew Bushery
About Agent Basics
“Developing a comprehensive real estate business plan for yourself is really essential to growing your business. Without a plan that goes over both sales and marketing, you’re probably not going to achieve your goals.”
To get insights and advice on developing a real estate business plan from Placester VP of Industry Relations Seth Price, watch this video, or read the full transcript below:
Successful agents and brokers constantly adjust their real estate business plans.
Seth says …
Here are two of the biggest changes that we’ve seen, and I think we’ve all experienced.
Number one is really natural. It’s the move to digital — almost 100% from the consumers’ perspective.
Every consumer that we meet has some sort of digital phone. They’re searching for properties on many of the big portals. They understand how to communicate. They may still have preferences — email, SMS, a phone call — but that movement has happened.
We’re no longer in the age where some people are digital and some aren’t. We’re in the Digital Age, firmly.
The second really big change is a move toward teams — I’ll call that specialization. There are folks in your organization who are better at some things than others:
- Some people are really good face-to-face [as] a buyer’s agent.
- Some people are really good at transaction coordination.
- Some people are really good at being an ISA (inside sales agent), working the phones and working leads to convert them into showings and listings.
That specialization, in particular, has helped to better serve the customer and increase response times, which increases conversion.
It’s important to incorporate a strong marketing strategy into your real estate business plan.
Seth says …
The biggest challenge that I see today is the need for all businesses — whether that’s an individual agent or a team or brokerage — to either be a professional marketing organization, or enlist the services of one.
What that means is there are too many moving parts to leave marketing and your sales conversion engine up to chance. That’s just the bottom line.
If your website is not tuned to attract and capture, if your content is not of a high caliber and you’re not creating it with enough frequency and enough personalization, if your emails are canned and not being opened at the rate in which you want them to, that’s when you really need to think about what it takes to establish a marketing muscle that you can leverage going forward.
Every business is being challenged like this. It’s no longer enough to put up a sign and say, ‘Hey, I’m an agent in XYZ area.’
You really have to take the time to figure out the opportunity in the area, and how are you going to market into the area so you can be effective and grow at a reasonable rate.
Real estate business data helps you prepare for what’s ahead.
Seth says …
What’s great about the real estate business? We have access to lots of data.
At the simplest level, look at all of your past transactions and literally categorize all of the buyers and all of the sellers and create a plan for how you’re going to communicate with them and turn them into repeat business and referrals.
You also have market data about what’s going on in your area – where you farm and work.
Understand the price increases or decreases. Understand the inventory so you can plan accordingly if it looks like you’re going into a slump of inventory and you’re going to switch from working with buyers to sellers predominantly – because that’s going to be the opportunity.
Utilizing the data that exists is vital.
Also, look at the lead sources you’ve had over the past 12 months to understand what has been the most cost-effective lead sourcing you’ve done.
It could be your phone prospecting. It could be your Facebook advertising. It could be your website advertising, or your content marketing.
Really dial into that to understand which ones you need to spend less on and which ones you need to double down on so you can be more effective and drive more return on investment.
If you don’t have customer personas, your real estate business plan is destined to fail.
Seth says …
Customer personas are extremely important for you to figure out the right way to communicate.
What I mean by that is understanding, if you look at all of your past clients, who predominately are they?
- Are they first-time home buyers?
- Are they second-time or vacation home buyers?
- Are they folks that are in a certain financial demographic?
- Are they mostly men? Or are they mostly women?
- Are they parents? Are they divorcees?
What’s the breakdown of the folks that make up the core of your business? The clearer you can get to understanding who that is, the easier it is to connect with them.
You can understand where they spend their time, what types of tools they use, how they consume their information, whether they’re extremely digital like Millennials or if they still really love the newspaper and the ads that you might put there because they’re of an older set that gets the newspaper delivered on a daily basis.
Personas help you target the right customers.
These are the keys to creating a strong REALTOR business plan.
Seth says …
Real estate business planning is really done in many ways with a spreadsheet:
- What’s the average home price? And what’s the housing inventory?
- Given how fast you want to grow, how many homes do you need to sell?
- What’s your commission for you to reach the financial goals you’re after?
The other side is really tracking all of your expenses and understanding and looking back from the previous year.
Ask, ‘Well, what did I spend not only on the basic things like licensing and continuing education and travel and conferences and those types of things, but what did I spend on tools and on gas?’
Then you want to look at what you spent in terms of customer acquisition costs. Now, we may call that marketing or sale: all of those activities you did in the past you’re going to project based upon your growth in your future.
Why this is so important:
- You have a goal you want to achieve.
- You have a clear idea of what’s available for you to spend so you can juggle your budget.
So, if you spend a lot of money on bus station advertisements and it didn’t generate the return you were looking for, you might look into reallocating that money into some other tool.
Maybe it’s to Facebook marketing. Maybe it’s to content marketing. Maybe it’s to re-doing your website. Or maybe it’s for someone to create emails for you so you can communicate with your list.
Real estate agents are business owners — and business owners need a clear-cut path to growth. Get the guide.
Published on March 6, 2018
Written by Matthew Bushery
I'm the Sr. Content Creator for Placester, where I educate real estate professionals about modern marketing and, in turn, help agents and brokers make the most of their online presence, earn more traffic, and generate more leads and business.