Which one are you? How do you view your occupation? How do you view yourself? The answer is important. Is what you do your occupation, or is it your passion? These are key questions you should ask yourself when you begin your real estate career.
I believe that your answer to these questions will be the catalyst to your future success.
Starting Out as a Real Estate Agent
When I started my career, I was a real estate agent. I was looking for a way to make money and have control over my life. Isn’t that why most of us get into the business? The real estate industry can certainly provide a wonderful opportunity to fulfill those two criteria. A real estate agent focuses on transactions and the daily work that surrounds them. They keep a tight view on sales under process and what sale might be next.
Transitioning to a Business Owner Mindset
As you grow in the industry, however, successful agents come to understand that they are small business owners. As a small business owner, you take stock of the larger view of your business and the work taking place beyond each individual sale. Business owners are looking to grow their personal income by finding ways to make improvements and promote their business. They do not invest in unproven or often unheard-of business models, including flash in the pan technologies, but they do look to make investments in themselves and often take on every aspect of the business from sales and marketing to interacting with all clients and vendors.
Criteria for Success in Your Real Estate Business
So as a small business owner you need to know what is vitally important to making the most out of what you want to do. As I was preparing for this blog, I did a few basic searches for what criteria makes a successful business owner. A lot of information came back – here are the highlights:
- Driven to succeed
- Budget Minded
- Risk Taker
- Goal Oriented
- Focused
- Self-Motivated
- Passionate
- Resilient
- Confident
- Open Minded
Many characteristics turned up in my searches, but only two came back over and over in all the results I found. They were Budget Minded and Passionate. Every article I read talked about how success can only be measured by knowing your expenses and creating budgets and sticking to them.
Budgeting for your Real Estate Business
Money management may not be something you have given much thought to in the past, but you will need to now as a small business owner. Real estate commissions are unpredictable; you must manage your money carefully to increase your chances of success.
If you are new to the business, you will need to start tracking your expenses and realize that you are at the building phase of your small business.
If you are not new to the business, you need to examine last year and figure out exactly where you spent your money. Do not forget to include all the expenses. Here is a link to a list of common real estate expenses.
It is easier than ever to use apps to help you track your spending. If you do not know how much you have spent, you will not know your bottom line. How much money do you really want to make and how much money was truly your salary for the year? In this way your business budget can segue into your personal budget, and you can track where your money is going on all fronts.
Budget Categories
A few categories to consider for your Real Estate Business budgeting plan are:
- Auto Business Expenses (repair, parking, lease payment, insurance, maintenance, gas)
- Office Business Expenses (Office Space charges, internet, computer, office supplies, cellular charges, postage, printing)
- Personal Development Business Expenses (dues and subscriptions, CE or any education)
- Marketing Business Expenses (advertising, including print, billboard, social media, search; website, client meals & gifts)
Remember a major distinguishing factor between agents who succeed and those who have fluctuations in their income and sometimes exit the career is all about mind-set! I hope you now view yourself as a small business owner not just a real estate agent. The realization that your income stream is dependent on both your knowledge and passion is what many real estate agents fail to embrace.
Good luck – I’d love to hear from you about your business budgeting questions. Let’s chat!
USED CORRECTLY, A BUDGET DOESN’T RESTRICT YOU; IT EMPOWERS YOU.
TARA STAUFFER