Prior to obtaining my license as a real estate agent, I practiced in the healthcare industry in a variety of roles, including administrator. My education and experience exposed me to some serious planning, both short term and long range strategic plans. For example, multi-million dollar budgets were developed for monthly, quarterly, and annual budget forecasts. Capital budgets for items of significant value were planned for, including the financing.

We developed plans for new product lines and new services. We developed staffing plans for how each service would be delivered, the competencies required, and relief!

On a regular basis, teams of us would meet to discuss competitive analysis: strengths, weaknesses, threats and opportunities (SWOT analysis) in the marketplace. We developed marketing plans and strategic plans (5, 10 and 20 years) based on our mission and vision for our facility.

All of this planning time was allocated as part of our job, and was done in addition to daily operations.

It was only natural that as I began my real estate career three years ago, that I brought these same principles into my business. After all, I have an MBA and these planning techniques are required for all successful businesses. At least, that is what I thought!

The reality of a new real estate practice requires many of the same ideas, but there are key differences:

Budgets

Expense Management: I use an excel spreadsheet to manage monthly, quarterly and annual expenses. In previous blogs, I have discussed that operating in the "red" is reality and normal for many new agents. How far in the red you can go determines your marketing budget and budget for technology and other real estate gadgets that everyone seems to have but you!

1. Revenue Budget: I use excel to manage forecasted actual revenue (commissions). This is known as closings. For a new agent, they are few and far between. And just when you have a binding contract with a closing date, it terminates. To me, this is one of the most difficult principles to understand in this industry. I have had to "unlearn" many things that I thought were important. The reason: it will drive you crazy! This is one reason for the high failure rate of new agents and high turnover rate in the industry. A new real estate practice requires access to large capital sums to survive until there is enough business volume to break even, reach profit, and survive the inevitable terminations.

Forecasting seems almost impossible!

Competitive Analysis

In my area, this is one of the most challenging aspects of planning. There are over 100,000 licensed agents in Georgia and everyone seems to know an agent. The number of real estate brokerages is simply overwhelming. Everyday as I drive, I see more and more signs of a company that I have never heard of.

Determining your marketing budget and geographic area will inevitably bring you up against numerous mega-agents: agents with dominant market share, mindshare and a bigger marketing budget than you! It is known as waking up a sleeping giant when you go up against a dominant agent.

Marketing

Everyone advises a new agent to have a market niche and plan for generating and managing leads. This is the lifeblood of the agents business. How much you are going to spend on internet advertising, print advertising, direct mail, networking, etc. is directly related to your ability to obtain leads. Often, you have to sign a contract and agree to monthly bills. As they pile up, more and more revenue (closings) is needed to offset what you have obligated your company to pay. Sound like stress may be involved?

Staffing

Many agents are solo practitioners or act as buyers agents for established listing agents. An agent has to plan their day to manage leads, manage transactions in process, work with buyers and listings, and address all of the planning that we have mentioned above. It can be an overwhelming and long day. Success means hiring an assistant, adding agents and building a team. Knowing the best time to do this is part of your business plan and budget.

What is the good news? I write these ideas to try to touch new agents who may be experiencing or feeling the things I feel and to try to offer hope! The paradox of planning and the stress that it causes must be addressed. First, the planning is important for all types of businesses. However, what I am beginning to realize is that failing to meet my goals, failing to close and the constant pressure is taking a toll on me that simply will not work in the long run. I loose my joy and feel very tired. Not good for a small business owner.

There are many great tools and coaches out there for a new agent to help with these concepts. And I have learned and come to believe that"?there is a choice or an attitude that is more important than all of the plans: it is the choice to believe that with every cell in my body, I know that I am doing what I am supposed to be doing. I have been called into this for a cause and a mission: to serve seniors. Every day, I am committed to doing my best for the people that come to me for assistance in real estate matters. And, everyday I will believe that I will continue to succeed and thrive, no matter what the numbers say!

Right now, this process of faith is getting me through the day. I am determined not to fail, but I would also like to keep things in perspective and not loose myself in the process. A little bit of planning and a whole lotta faith! Maybe that is "the secret".

How about you?

Make it a great week!

Kendra