It starts with a vision

For Baird & Warner Managing Broker Stephen Engel, business planning starts with agents understanding that they are, in fact, running a business. “It’s the ultimate goal, for agents to understand that,” he says.

Most agents do not come into real estate as former business owners. Without that background, their understanding of what running a real estate business requires on a day-to-day basis – the planning, budgeting, marketing and self motivation – may be lacking.

It’s a problem that Engel sees in new agents and real estate veterans alike.

“I’ve seen $2- to $3-million producers that cannot get past that plateau because they do not plan like a business,” he says. “There is nothing for them to follow – nothing that says, ‘Okay, it’s December, this is what I need to do.’ ”

That is precisely why Engel emphasizes the seriousness of running a real estate business to all incoming agents, even before they attain their license. Among other things, new agents must consider things they may not have otherwise, including examining their motivations for turning to real estate and what they hope to get out of it.

“A lot of agents come in thinking this is going to be an easy way to make a ton of money,” Engel says. “That is not the case. This job is not easy.”

Understanding the reality of the business and having motivations beyond ideas of easy money, Engel adds, is the foundation of the most solidly built business plans. Jim Miller, the managing broker and COO of Jameson Sotheby’s International Realty, who has coached countless agents over the years, says that without a business plan, an agent might as well be a real estate hobbyist. He likens it to planning a trip.

“You are not going to take a trip and not plan it,” Miller says. “You are going to figure out where you are going, and how long your trip is going to be. You will make a budget, and choose your flight and hotel. Those who plan and have an intentional process are the ones who have a business.”