We often hear various tips and tricks on how to achieve success in your business. There’s no problem with this approach and some ideas might indeed produce a breakthrough for you. But oftentimes you can get even better insights from ideas on how to prevent failure. Sound counterintuitive? Maybe, but if we perceive success as a lack of failure, it begins to make sense. Let’s review some of the most common mistakes, which if left unchecked can spell certain doom for your real estate business.
Not having a clear plan in place
You’ve probably heard about the importance of planning in business so many times it makes you nauseous. Why play the old tune over and over? While everyone knows about the importance of planning, not nearly enough people actually commit to putting it down on paper (or a Word document). A carefully crafted business plan will save you a huge deal of trouble (and money) in the long run. What are your goals? How will you measure success? Target market? What are your expenses? Can you minimize and optimize them? What regulations should you comply with?
Your business plan will provide you a clear roadmap, thus eliminating, “What am I supposed to do now?” questions along the way. Even more, you can spot potential problems early on. It’s always better to see troubles in advance, rather than discovering them unexpectedly when you’re in the middle of something else. Crafting a business plan may seem intimidating. It takes time and a lot of work to create a good one. But even a simple 2-page plan is better than no plan at all. With some simple steps, you can craft a business plan of your own.
Not playing the long game
Real estate is not a line of business where you can expect quick success, especially if you’re a beginner. It takes weeks, or even months to get things rolling. It’s important to understand that in real estate you’re facing one of the longest buyer journeys out there. To put things into perspective, on average Americans change their phones every two years. The average duration of homeownership is much longer at over 13 years. It’s an important decision and it takes time to go through all the stages. Even if you have a prospect who’s ready to commit, expect that it will take months until everything is finalized. And “cold” prospects? Much longer.
If you’re asking, “So what?”, we may have some advice for you. Take time to nurture your leads through your marketing channels of choice, like email. Build relationships with your prospects and customers. And most important – keep going. You can weather the harshest financial droughts if you’re persistent enough.
Not spending enough on (the right kind of) marketing
Too many businesses perceive marketing as an expense. When things aren’t going well they cut marketing spend first. Is it a surprise that it only makes things worse later? Any business needs clients to survive (and many more of them to thrive), and good marketing is what draws these clients to your business. It’s not an expense, it’s a delayed profit in disguise.
Then there’s another, subtler problem when it comes to spending on marketing – spending your money the wrong way. Maybe you’re orthodox and consider digital marketing a gimmick, spending all the money on print and TV ads. Maybe you’ve heard from your in-law that, “SEO is the only way to go,” so you refuse to spend money on other channels. Instead, you should consider your goals and diversify your channels accordingly. Traditional media works, but often you can get the same from digital while paying less. SEO is a great channel, but can you afford to wait 3 months until you see results? Emails are a wonderful way of nurturing your leads, but how do you plan to attract them first? PPC gives you results fast, but it’s expensive. What’s the best channel then? A healthy mix of them!
Not following the regulations
Real estate is a heavily regulated industry and you’ll have to be aware of many legal nuances. First, you must follow both federal regulations and regulations of your particular state. We have a neat primer on these regulations specifically for mortgage specialists. Second, there are regulations and rules for specific activities like cold calling and telemarketing, Facebook Ads, or email marketing. On top of that, if you’re a member of an organization like the National Association of REALTORS® (NAR), you’ll have an additional set of rules.
It may be tempting to skip these, especially since following the rules won’t make you more money. However, this mistake can be very expensive as you can end up with lawsuits and fines on your hands.
Of course, there are many more mistakes you can make in this line of business, but we think these are among the most critical. Are there any mistakes you made in the past that were especially painful? Any insights on how to avoid them? Share them with us in the comments!
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