How to Write a Real Estate Business Plan: Elements, Examples & Free Template (+ Goal Calculator)
This article is part of a larger series on How to Become a Real Estate Agent.
A real estate business plan sets the foundation and creates guidance on income goals, marketing strategies, goal setting, lead generation, and understanding of your competitive landscape. It details basic information about your business, such as the mission statement, and evaluates your organization’s SWOT (strengths, weaknesses, opportunities, and threats). Business plans should include measurable goals and financial calculations that you can revisit throughout the year to ensure you are reaching your goals.
Read along to learn how to write a real estate business plan as well as review business plan examples. Download our free template below and start creating your own.
1. Write Your Mission Statement
Every real estate agent’s business plan should begin with a mission statement, identifying your values and why your business exists. Your mission statement serves as the guide to achieving your ultimate business objective. When you create a strong influential mission statement, all other items identified in your realtor business plan should be aimed at fulfilling this statement.
Your mission statement should identify your target audience, what product or service you provide, and what makes your business distinct. As seen in the example above, a powerful mission statement should be short and concise, but sums up a business’ objective.
Let’s take Compass’ mission statement above as an example: “Our mission is to help everyone find their place in the world.” The statement identifies what the company offers, for what reasons, and who it benefits.
Mission Statement Components
Compass Mission Statement
"Our mission is to help everyone find their place in the world"
Product or services provided
Help find their place
What makes your business distinct
In the world (global capacity)
2. Conduct a SWOT Analysis
SWOT is an acronym that stands for a business’ strengths, weaknesses, opportunities, and threats. The primary objective of these four elements is to assess a business by evaluating internal and external factors that can drive decision-making and help you make more money. Conducting a SWOT analysis as you develop your business plan for real estate uncovers opportunities to differentiate yourself from the massive amount of competition currently on the market.
Strengths & Weaknesses
Strengths and weaknesses are internal parts of your organization. Strengths identify what product or services you provide better than others, your access to resources, and items that are beneficial to your customers. Weaknesses are items that need improvement, any lack of resources, or what your competition does better. These are items within your control to change because you have the ability to convert a weakness into a strength.
See the example below if “Agent X” was doing their SWOT analysis:
|Proprietary technology to quickly run property comparables||Staff does not feel supported in daily operations|
|Office is located in a retail area, driving a lot of foot traffic||Keys are often lost between agents|
|In business operation for over 10 years||High agent turnover rates|
Opportunities & Threats
Opportunities and threats are driven by external factors and are areas you can take advantage of to benefit your business. They can be shifts in the current marketplace, emerging trends that you can capitalize on, features that competitors are lacking, or even changes with your competitors. Threats, on the other hand, are anything that can negatively impact your business. You don’t have control over changing the opportunities or threats, but you can develop a practice to anticipate and protect your business against the threats.
The opportunities and threats for “Agent X” would be:
|Agents want to expand outside of a niche market, an opportunity for them to do deals in other specialized areas||New brokerage/team obtaining listings in my area of expertise|
|Buying into the Zillow Premier Agent program for more buyer leads||Interest rates are increasing; buyers don't want to move as quickly|
|Obtaining a brokerage license in an adjacent state||The state may be capping commission rate percentages|
When you complete your SWOT analysis, use it as a guide when creating strategies to meet your business objectives. To gain the most benefit from creating a SWOT analysis, make sure you are being realistic about your business and evaluating it in the present state. You don’t want to be unrealistic by listing strengths or opportunities that don’t exist yet, and you want to allocate time and money to the most impactful solution to your business issues.
If “Agent X” completed the above SWOT analysis, a few strategies they could derive would be:
- Incentivize agents to keep them at the brokerage for longer
- Implement a technology-based key machine to reduce lost keys and keep the team accountable
- Find competitive advantage against competing brokerage and use that in marketing messages
To help agents locate other brokerages operating in your preferred market, agents can use Zillow’s agent finder page as a research tool to see which agents or brokerages are operating in a specific area. You can find an agent by location, name, specialties, and language. Once you click on a Zillow profile, you can read their reviews, see their team members, contact and website information, and property listings. Take a deep dive into your competitor profiles and can use the information to implement strategies within your own business.
3. Set Specific & Measurable Goals
After clearly defining your mission statement and SWOT analysis, you’re ready to set some business goals. Goals can help set the tone to increase your performance and drive your business in the right direction. Your goals should have a definitive way to show progress, which can be a prime motivator to keep you on track to achieving them.
Each goal should follow a pattern to identify set criteria. This will ensure that your daily efforts are performed to meet business objectives within a set period of time. A way to do this is by using SMART goals:
Examples of SMART goals for agents or brokerages:
- Increase closed transactions by 20% to a total of 150 deals within the next year
- I will ask all closed clients for a referral and review within 30 days of closing the deal
Goals can be split into short-term and long-term goals. Short-term goal lengths vary between a few days and weeks but do not exceed six months. Short-term goals can also be worked on simultaneously with long-term goals. Long-term goals can take up to six months or more to complete and require careful planning and perseverance to accomplish. Having a mix of both short-term and long-term goals will help you maintain motivation.
All goals are equally important; however, success will stem from how you prioritize each one. Slowly add on additional goals as you have the capacity and feel comfortable with the current progress of your current set of goals. Without identifying your business goals, you’ll essentially leave your results up to luck to attain your business objectives.
4. Plan Your Marketing Strategies & Tactics
Developing marketing strategies and tactics and implementing them help you identify and locate your current value proposition in the real estate industry along with specific timelines for execution. In addition to determining your overall business objectives and goals, your marketing strategy and plan should include the following:
- Pinpoint general marketing goals
- Estimate projected marketing budget
- Know your geographic farm area data and identify your target audience
- Analyze market competition
- Identify your unique selling proposition
- Establish a timeline and set your plan in motion
- Track your progress and readjust as needed
While a marketing strategy identifies the overall marketing goals of your business, developing marketing tactics will help you achieve those individual goals. They can include referral business tactics, retention efforts, and ways to acquire new customers. For example, you can offer incentives to anyone who refers your business who closes, or you can implement new email drip campaigns to help increase lead conversion rates.
These tactics should have set key performance indicators (KPIs) to help you evaluate your performance. For instance, a KPI you can set for your business could be that referral business should exceed 20% of your lead generation sources.
If you’re not sure how to put together your marketing plan, check out our article Real Estate Marketing Plan Template & Strategy Guide and download the free template to get started.
If direct mail is part of your promotion strategy, using services like ProspectsPLUS! can help easily create and distribute mailers to a selected targeted area. It also has options for postcards, brochures, newsletters, flyers, and folders. You can also send mailers to prospective clients by geographic or demographic farm areas through its campaigns. Check out its templates and mailing options today.
5. Create a Lead Generation & Nurturing Strategy
Having a successful lead generation strategy will help you maintain business growth. Lead generation can be performed both organically and through paid advertisements to attract and convert prospective clients. In addition to generating leads, agents should have systems in place to manage, nurture, and re-engage with contacts to maximize opportunities.
Generating leads through a multipronged approach is the best way to maintain lead flow. Use organic strategies like hosting an open house, reaching out to your sphere of influence, and attending networking events. Employ paid generation strategies, such as purchasing leads from a lead generation company (e.g., Market Leader or Real Geeks) or setting up a website to funnel potential clients. Your marketing strategies will directly correlate with your lead generation strategies.
Every lead is an opportunity, even if they don’t convert to a deal right away. Effectively nurturing leads can make sure no opportunity falls through the cracks. Agents can nurture leads by continuously engaging and developing relationships with prospective leads. It’s important to provide prospective clients with a constant flow of important and relevant information, depending on where they are in the real estate buying or selling process.
Implementing an efficient customer relationship management (CRM) tool will make the lead nurturing process easier. CRMs like HubSpot are affordable and gather contacts into one easy-to-use platform. Agents can input contact information along with any necessary notes into a contact’s profile to refer back to when communicating with leads. HubSpot’s lead management tools like sales automation, call tracking, and email templates assist with helping you stay top of mind for your leads.
6. Calculate Your Income Goal
Your income goal is one of the most important items that need to be included in your business plan. While this may be more difficult for new agents who are still learning the business, it’s still necessary to estimate the amount of money you are going to earn for the year. Work with an experienced agent or mentor to help you estimate your monetary goals. For experienced agents, review your previous years to judge your income goals for the upcoming year.
To calculate your income goal, and the amount of work you’ll need to complete to get to that goal, you’ll need to have some basic number estimates:
- Net income: The amount of money you will put in your pocket after commission splits with your real estate brokerage.
- Fee split with brokerage: This is the agreed-upon commission split that you have with your brokerage for each completed transaction. For example, if you have a 70/30 split with your brokerage, you will collect 70% of the commission, and your brokerage will receive 30% commission for each deal.
- Estimate of completed deals per year: You also want to estimate the number of deals you intend to complete per year. Keep in mind that some months will be busier than others, so make sure to account for holidays, weather, and your personal schedule.
By figuring out these numbers, you’ll be able to give yourself a realistic number for your income goal. Compute for the gross income commission (GCI) or amount of money you need to make before commission splits and the average profit per deal and per month you’ll need to reach your goal.
For a more detailed breakdown of your yearly goal, download and use our yearly goal calculator. Input your information into the highlighted yellow boxes, and the spreadsheet will automatically calculate the GCI, total deal count, and gross income you’ll have to earn each month to reach your goal. Adjust the average gross commission per deal and brokerage split as necessary.
For additional information on real estate agent salaries, review our article Real Estate Agent Salary: How Much Do Real Estate Agents Make?.
7. Set Times to Revisit Your Business Plan
Business plans are only effective if you use them. A business plan is a roadmap for your business, and you’ll need to revisit it often to make sure you’re staying on track. It should act as a constant resource to guide you through meeting your goals and business objectives, but it’s not necessarily set in stone if you need to make any changes.
Agents should revisit their business plans monthly to measure progress and make any changes to stay the course. If you find that you’re missing the times set for your goals, then you should continue to revisit your business plan regularly. Changing the business plan itself should occur on an annual basis, once you’re able to have a complete picture of your annual performance. Evaluating the business plan can help you discover new strategies and ensure you have the appropriate resources for the upcoming year.
Using sales software like Pipedrive can help you track your overall business performance when you revisit your business plan. It presents company sales data in easy-to-visualize dashboards that track your business performance and also contains forecasting tools to project future revenue. It has the ability to maintain company and team goals with progress tracking to keep goals top of mind.
5 Real Estate Business Plan Examples & Templates
Real estate agents and brokerages don’t have to build their business plans from scratch as there are many resources available providing different examples. Business plan templates can also have different objectives. Some are used to secure financing or help you focus on lead generation, while others are single-page plans meant to get you started.
Here are five real estate business plan examples you can use to create yours:
1. Lead Generation & Income Plan
This business plan is from Market Leader, a third-party lead generation platform. It specializes in lead generation, marketing, and converting leads into customers with an attractive IDX (Internet Data Exchange) website and robust automation tools. Agents can also participate in purchasing leads through their lead products to receive a guaranteed number of leads per month.
Market Leader’s business plan is centered around driving more business through lead generation. It helps agents understand their lead sources, average sales price, and how much commission was earned in a given year. It also helps agents set income and transactional goals for the following year.
2. A Single Page Business Plan
Agents who are new to writing a business plan can start small. Business plans do not have to be multipage in order to be effective. This single-page business plan helps identify a single goal followed by three areas to focus on and five objectives for each focus area. As real estate agents begin to feel comfortable with goal setting and completion, they can continue to add on to this single-page business plan with duplicate pages, identifying additional goals.
3. Business Plan for Real Estate Brokers
This robust real estate broker business plan is designed to address organization and management goals. It contains pages that identify personnel information like title, job description, and salary. The business plan also encourages the broker to identify operational goals focused on future personnel changes. It’s best suited for a broker with a larger team to help drive operational change.
4. Business Plan With Detailed Financials
This multipage business plan contains eye-catching graphics and detailed company financial information best for real estate agents and brokers looking to obtain funding from outside investors. One of the last sections of the business plan is a financial planning section geared toward showing how viable your business is through your provided income statements, cash flow, and balance sheet reports.
5. Real Estate Developers’ Business Plan
Upmetrics’ business plan templates are easy to edit, share, and contain professional cover pages to help agents convert their business ideas into actionable goals. The business plans from Upmetrics are geared toward agents looking to transition into real estate development. This particular plan includes key sections important for a developer to analyze, such as building location, demand for housing, and pricing.
Whether you are a new real estate agent or a broker looking to grow your brokerage, writing a business plan will help you define the steps needed to build a successful business. It serves as a guided roadmap to help you achieve your business goals, identify areas of improvement, and provide guidance in all aspects of your business, from marketing, operations, and finance, to your products and services. Most importantly, business plans can help determine if your business is viable and worth the financial investment.