Hi, my name is Jerry Calvin P.A., and I'm relatively new to real estate (>5 years), but I'm amazed at the transferability of previous experience to the real estate business.
My background was in Marketing and Manufacturing companies, where for the last 20 years I was President/Chairman, CEO and Board Chair/Member, of some 14 different companies (did mergers, acquisitions, divestitures, etc in most of these companies).
Over the years, having taught many programs for management, sales, marketing, strategic planning, measurement and control parameters, human resources, executive compensation, etc.... I am still surprised that very few real estate persons I have met have the slightest notion as to how to really set themselves up in business, THEIR BUSINESS. Many still perceive themselves as working FOR the Broker in the office rather than WITH the Broker they are affiliated with.
I believe this perception is very bad for the agents, and quite frankly, bad for the Broker. Although some Brokers probably get an ego fix from this type relationship. Don't get me wrong, the Broker's job is to help the agents be successful, but the Agent's must assume the responsibility for the success they achieve or don't achieve.
Anyway, because of this, by first try here is to say to each of you out there, whether in the business for 1 day or 40 years, you gotta have a plan........................
Now, what is a plan (specifically what is a STRATEGIC PLAN)?
Well, to start, it must at least have the following:
1. A Mission Statement.... What is it that you are in business to do? UHHHH being in business to provide real estate services is rather too vague. You either need to get very clear on specifically what real estate services you are going to provide.
- Your Objectives..... What level of Service, Quality, Cost, Market Share, etc... are you going to achieve, when is it going to be achieved, how is achievement going to be measured, who is responsible for achieving it? Needs clearly stated, measurable, reportable and necessary resources identified. By the way, three questions you must ask yourself.... 1) What do you want to do? 2) What should you do? 3) What can you do? THEY AREN'T ALWAYS THE SAME!
- What Tactics are you going to employ to achieve the objectives. In other words, what actions are you going to take that will achieve the objectives. If you can't determine what you need to do to achieve the objectives, then obviously the objective need to be modified. Same with cost (what can you do). If you have an objective that requires actions which will cost you more than you can afford, obviously bad objective, at least short term.
- When are the objectives going to be met is determined as to when the tactics are going to be completed.... That's why its called a plan. In other words, having earned $20,000 this year and having an objective to earn $100,000 next year without detailing just what it is you are going to do (besides just being in the business next year) is a plan sure to fail. Especially if you really haven't thought through the issues of the market, your market segments served, your market share, your marketing plan, your market nitch, how much you can/will spend on marketing/sales/office/etc, where your business is going to be coming from, etc.....etc.....etc....
- Who is responsible for achieving the objectives and taking the actions and when. Lets face it, many Brokers insist upon receiving a plan by........ whenever...... but then everyone puts the plan in their desk drawer until next plan requirement. Even when the plan details down to the level of how many phone calls will be made, how many open houses, how many ads, etc. etc.... etc. I don't know about you, but I usually get distracted (sometimes hourly) on my priorities for the day.... Darn those foolish customers threatening me with business when I'm busy doing other stuff.
You may be getting the feeling that this planning thing is rather complicated and will take sure real research effort and time to do. RIGHT ON! Nothing simple or easy....... OR MORE NECESSARY. By the way, this is a simple overview..... the real plan is rather more complicated.
Come on now, how many of you have a great Strategic Plan? How many of you want one? How many of you need one? I'd love to hear your comments.
Hi Jerry
From a business standpoint I completely agree with you. Working a plan will in the end pay off. In a lathargic market, the mistake most newer agents make is in investing in the wrong properties. The outlay of capital for marketing strains many newbys and for some the learning curve can be quite costly.
There is confusion in how they define their business from the brokerage or brand. It is more of a partnership in most cases. I think many underestimate the cost of doing business. Too often they continue to put money into passive marketing (ie postcards) which does not pan out. Brokers benefit from this as they derive exposure which the agents pay for. Few agents truly realize they are expected to have a cash reserve to launch their businesses.
You have to prime the well to get water. I enjoyed your article very much- thank you for writing it.
Most agents want to jump in head first without a plan and that's why 80% of agents don't renew their license in the first 2 years. Great post Jerry! You couldn't be more RIGHT ON! :)