Real Estate Agent Business Plan

Business Plan Articles

If you are starting a real estate practice and need investment or a market-entry strategy, you may benefit from a business plan. The experts at Pro Business Plans have worked with many real estate agents to prepare professional plans for investment and strategy. This article provides information about what is included in a real estate agent business plan and how it is typically structured.

Real Estate Agent Business Plan

When forming a real estate agent company, there are many unique factors to consider. Among the most important of these are the location of your operation, scope of real estate you focus on, commission structure, and marketing plan. Each of these elements will combine, along with your implementation ability, to determine the degree of success that you will experience. If you are seeking capital, banks and investors will review the aforementioned factors in order to measure the risk and forecast the profitability of your real estate business.

Business Model

The business model for a real estate agent is to represent clients looking to sell their real estate on either a leasing or outright sale basis. Some real estate agents represent a certain territory within a niche of the market, such as residential or commercial. Others cover a broad spectrum of properties but are still geographically focused. The business model for a real estate agent will define this positioning, along with the operations structure of the agency.


market positioning

Positioning

The market positioning for a real estate agent is very important as some specialize in commercial real estate, whereas others focus on condo sales or luxury residential. Almost all real estate agents focus on a specific territory or area of the market. It is extremely important to have strong positioning as a real estate agent because the market is highly competitive.


team management

Operations

The approach to operations for a real estate agent is primarily focused on lead acquisition and conversion. Other activities relate to managing relationships with the community and networking in order to increase the inventory volume - particularly exclusive relationships that will help the company to grow in the market.


Marketing Plan

The marketing section of a real estate company is designed to provide a concise, yet strategic strategy for acquiring real estate clients. This is very competitive if you are just entering the market because it is likely that there will be other real estate agents that have industry relationships.

However, there are a number of ways to acquire clients that include the use of social media, digital marketing, and public relations. For a new real estate agent company, one of the best approaches is to establish a very positive public image as quickly as possible. This can be accomplished through the acquisition or media coverage that positions you as an expert in the industry, namely the local market.


trade shows

Lead Generation

The approach to lead generation is most effective if it is done over time through a combination of factors. The lead generation for a real estate agent includes both inventory acquisition (I.e. acquiring homes for sale) as well as leads for qualified buyers through sites such as Zillow, Naked Apartments, and strategic partnerships with other companies.


business development

Business Development

If any activity dominates the majority of a real estate agent's time, it is business development. This activity entails actively seeking out and targeting companies and individuals that can assist in either increasing inventory or increasing the number of qualified home buyers to see your property.


Financial Projections

If your real estate agency business plan is being used to acquire investment, it is likely that you will require at least three to five years of financial projections. The commissions for a real estate agent can vary considerably depending upon the structure of the company. If you have sales representatives working for you, they may decrease your margins, but enable you to generate more revenue. Likewise, trading off lower margins for more expensive marketing channels and higher sales may also be an option. Preparing a comprehensive financial model can help you better understand the impact of these decisions on your bottom-line profitability.


revenue projections

Revenue Projections

The revenue projections for a real estate agent are based on a combination of factors including the commission split as well as the amount of properties turnover and their price. However, the unknown variable of the sales value and frequency of sales makes it challenging to perform such projections.


budget forecasts

Budget Forecasts

The budget for a real estate agent is based on a combination of factors including the costs to acquire a customer, the assets required to operate your agency or individual operations as an agent. Some real estate agencies cover these fees, but others do not.


What is Included in Our Custom Real Estate Agent Business Plan?


  • Marketing Plan
  • SWOT Analysis
  • Competitive Analysis
  • Profitability Analysis
  • Personnel Plan
  • Organizational Chart
  • Company Valuation
  • Executive Summary
  • Company Description
  • Keys to Success
  • Three Year Objectives
  • Product or Service Description
  • Market Research
  • Fundraising Support
  • 12 Month & 3 Year Profit & Loss
  • 3 Year Balance Sheet
  • 12 Month & 3 Year Sales Forecast
  • 12 Month & 3 Year Cash Flows
  • Break-Even Analysis
  • Financial Ratio Analysis
  • Management Team

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