Bringing business planning to brokerages
Business schools across the United States and around the world have been teaching the merits of a sound corporate business plan, and also the skills to create a one. Over the last decade, it has become a popular coaching mechanism to bring this concept into the world of independent contractors, and especially real estate agents. It is a productive planning tool for agents as well as a good tactical roadmap for executing one’s business. Lost in translation, though, have been the skills for actually creating a strong business plan that can be used practically to maximize potential. Let’s take a look at this process, and also about how to make your business plan work for you.
The first step – building your executive summary
Step one – for corporations as well as individuals or small teams – is to develop a well thought out, focused and informative executive summary. This document should be a powerful 2-4 pages that captures what drives you (or your business). It needs to succinctly illustrate your value to anyone reading the document. To do this, you will be forced to tightly define what makes you “you” and where your true competitive advantages are. This article will walk you through how to create your own executive summary, and how to use this strategic document to increase your success.
Mission Statement
Your Mission statement is a powerful summary of what value you bring to the market and what you focus on everyday to get better and better at what you do.
- CondoDomain.com’s example: Use technology, content, evolutionary pricing and in-person service to provide a less expensive, more efficient and ultimately more satisfying experience for real estate clients in the top 20 U.S. metropolitan markets
Goal
Your goal should be what you want to accomplish from a business perspective. Essentially, if you fulfill your mission, what will the results be?
- CondoDomain.com’s example: Achieve a 5% market share (by total transaction volume) in the real estate markets for each of the top 20 metropolitan markets.
Business Overview
Succinctly introduce your history in the business, the milestones you have hit over your tenure and the current state of your operations. Has your business strategy evolved over time? Perhaps you have evolved from an agent, to a broker to a managing broker hiring a team? Have you won any awards or done any advanced training? Put those here, too. Finally, summarize your current business strategy.
Opportunity
Describe your personal “market” and the business opportunity it presents. Identify total market size as well as market factors which you can take advantage of to earn business and grow your revenue.
Management
Provide a short bio of leaders in your organization. If it’s just you, describe you past experience and success, and make it clear how this will help you succeed with this venture.
Unique Selling Advantage
What makes you different from every other agent (or business)? Advantages can be technology based, a huge referral or relocation network, or a unique service you provide for clients, and more. If you are going to succeed, you NEED a unique selling advantage.
Success
What have you achieved in this current business. Use specific examples or hard data to illustrate that you know how to achieve tangible results.
Strengths
What are your strengths verses the competition? How will you leverage them for success?
Weaknesses
What are your weaknesses verses the competition. How will you overcome them?
How You Get Paid
Detail how and how much you get paid, and prioritize these ways if you have multiple revenue channels.
Projections
Make top line revenue, gross revenue and net profit projections for the next 2 years, broken out by quarter. Base these projections on actual market data and what your strategy, as it gets more and more effective, can achieve.
Capital Needed / Requirements
What do you need to execute on your mission statement, successfully implement your strategic plan and hit your projections? List any essential investment money needs, technology development, content creation (i.e. blog posts), etc. that are required to make your business succeed. Next, what is your plan for securing what you need?
Create your plan and follow up
Developing a strong executive summary forces you to evaluate your business in a productive way and answer hard questions that are important to maximizing your success. Taking the creation of this document seriously is a productive process in itself, but it should not end there. I suggest having quarterly business reviews where you document the state of your business in all of the categories above including the financial projections. If you are off track, determine if you have come up short or if the market has changed (if so, you may need to change your strategy and/or your projections). What have you learned that can make you more effective and more productive? Is everything still relevant?
It is important to create an executive summary (and later a business plan – which we will discuss next time) but it is equally important to understand that this is not a static document. You should be evaluating your performance, the market and your strategy… and updating your plan and projections accordingly. If you do this well, you have a powerful tool to become and stay a market leader.
