It’s no secret that the U.S. enjoys a searing hot real estate market. In 2020, 5.6 million existing homes were sold across the country, leaving a tremendous demand for reliable real estate agents.
As a real estate professional, your income is capped while working for somebody else. The only way to smash that glass ceiling is to start your own business. If you’re ready to go it alone, here are some top tips for growing your startup.
Choose Your Location Wisely
Many people are surprised by the fact that 40% of all real estate agents are based in California, Florida, New York, and Texas.
If you reside in any of these states, understand that the competition is fierce. Specializing in a smaller community and demonstrating an in-depth knowledge of the local market is one way to give yourself an edge.
Alternatively, you may even want to consider relocating to a less competitive part of the country to increase your chances of success. Like your buyers searching for their dream homes, it’s all about location, location, location!
Cut Costs by Running Solo
Anyone who has cut their teeth as part of a larger real estate company may believe that they need a team to launch their own venture. However, successful solo real estate agents do exist. While they only have so much capacity, building a team from day one is no requirement.
Opting for a one-person operation can negate the need to seek external funding and put you under pressure to recoup your initial investment from day one.
Leveraging digital software solutions and starting in a small way can lay the groundwork for expansion further down the line.
Protect Your Real Estate Business
Insurance is important in any line of work. While it’s unlikely that you’ll physically injure someone, there are still countless reasons why someone may decide to file a lawsuit against you. According to the U.S. Small Business Administration (SBA), almost half of all small businesses can expect to be named in a lawsuit annually.
The cost of a lawsuit filed against your business can lead to tens of thousands of dollars in attorney costs, court fees, and settlements. It doesn’t matter how frivolous the lawsuit is because, without insurance, you’ll be expected to pay directly out of your pocket.
One of the most important types of coverage is Errors & Omissions (E&O) coverage. When you get E&O for your real estate business, you protect yourself against any mistakes you make when managing your clients.
Consult an insurer that specializes in the real estate business. Customized policies ensure you work with an insurer who understands the challenges of your industry.
Build Your Referral Network
Word-of-mouth marketing is among the most powerful tools you have for a small real estate agent. Don’t make the mistake of trying to compete with the top agencies. Instead, brand yourself as a fixture of the community with enhanced local knowledge the larger agencies don’t have.
Build up your referral network by increasing your visibility within your target area. Hand out business cards, attend conventions, sponsor local events, and don’t be afraid to form partnerships with other unrelated businesses within your area.
Building up your referral network takes time, but referrals are the key to growing your business.
Develop Your Brand
Real estate agents all provide the same service. To stand out, you need to build a brand that emphasizes your unique selling points and crafts the image you want to protect.
Consider your target audience. Are you a real estate agent for people looking to purchase their first home, retirees looking to downsize, or people searching for a luxury property? The community you base yourself in will define much of this, but if you live in a major metropolitan area, like New York City, Chicago, or Los Angeles, you have more options.
Make use of offline and online marketing techniques, such as billboards, radio ads, and content marketing, to raise your profile and send a message.
Before starting your marketing campaigns, make sure you’ve established a set of brand guidelines. Authenticity and consistency are the two watchwords that should define your branding.
Leverage the Power of Technology
Tools and technology develop your professional image and enhance your productivity. Today’s agents can take advantage of any number of tools to organize their business and promote themselves.
Intelligent use of technology is critical, but you also need to avoid becoming too enamored with it because dedicated solutions can weigh on your cash flow.
Contract Management
Client tracking within your pipeline is a must. Basic solutions like an Excel spreadsheet are a starting point, but an all-in-one solution will serve you better.
Dedicated commercial solutions will allow you to harness insights and keep track of your business on the go.
Multichannel Management
Your own domain name and website are a must for establishing an online presence. However, the chances are you’ll be making use of real estate platforms like Zillow to bolster your reach.
Maintaining control of your channels can become challenging, especially if you’re experiencing a growth period.
Dedicated multichannel management platforms aggregate the activities of all your channels to make management more accessible and provide a higher standard of service.
Marketing Software
Some real estate agents may choose to outsource their marketing needs, but if you’re keeping it in-house, a marketing platform is a must.
These packages will include features like email templates, design templates, and an email platform. Some of the more advanced solutions may even give you the option of creating an animated home tour for potential buyers.
Update Your Financial Plan
Real estate agents can easily trim down their business expenses. However, there are still expenses to cover, and there’s a good chance you’ve taken out a business loan to launch your business.
Cash flow is the primary reason why small businesses in all industries find themselves filing for bankruptcy. According to one study, a massive 82% of businesses fail due to cash flow problems.
Maintain a financial plan and keep your finger on the pulse of your incomings and outgoings. Then, think about how you can become more efficient with spending to make the most of your resources.
Conclusion
Running a real estate venture is an opportunity for you to advance your career and maximize your earnings potential.
Wearing many hats at once can weigh heavy on even the most motivated realtor. However, investing in the solutions that make your life easier will enable you to be more productive and deliver a better service.
What’s your top tool for running your real estate business?
