Takeaways:
- With a little forward thinking and the proper education, real estate business owners can potentially avoid making crippling decisions.
- Neglecting to implement a business plan is a recipe for disaster — it might be the single biggest mistake a real estate business owner can make.
- An erroneously assembled team can result in lost income, depleted morale and even an exodus of the competent talent you have managed to retain.
Today’s real estate landscape has painted a rather lucrative picture for those on the outside looking in. However, real estate professionals actively participating in the industry are confronted with a different reality: It’s not as easy as TV makes it out to be.
Some might call it luck, albeit bad luck; and some might simply reference Murphy’s Law: Anything that can go wrong will go wrong.
Either way, real estate business owners need to be aware of the threats to their business and, more importantly, how to avoid them.
Mistakes, perhaps more than anything else, loom in the minds of cautious business owners. Nonetheless, they are inherently avoidable. With a little forward thinking and the proper education, real estate business owners can potentially avoid making crippling decisions.
Let’s take a look at some of the most critical mistakes real estate business owners make and how you can avoid making them yourself:
1. Neglecting to implement a plan
The concept of a well-devised business plan is anything but revolutionary, and far from new. However, the fact of the matter remains: there is nothing else that will contribute to the success of your business more than a proven plan.
Entrepreneurs have been using business plans as a means of making success habitual for centuries, and there is no reason you shouldn’t follow in their footsteps.
With that said, neglecting to implement a plan altogether is a recipe for disaster. It might be the single biggest mistake a real estate business owner can make.
Without an idea of what you want to accomplish, it is inconceivable to believe that you will realize your goals. Do yourself a favor and set aside some time to write up a proper business plan.
2. Hiring the wrong supporting cast
Behind every successful company — whether it’s a startup trying to stretch its legs or a multibillion-dollar conglomerate — is a convergence of talent.
There is perhaps no greater asset to an entrepreneur than the team he or she chooses to build the business around. With the right employees in place, opportunities abound.
Conversely, hiring the wrong team to represent your business could turn out to be the single costliest mistake you make as a business owner.
Not unlike a poorly executed business plan, an erroneously assembled team can result in lost income, depleted morale and even an exodus of the competent talent you have managed to retain.
Don’t let this happen to your real estate business. Mind due diligence, and vet your employees accordingly. It’s critical that your team exhibits an increased propensity toward success.
3. Not addressing negative reviews
The advent of technology, not to mention the ever-increasing presence of social media, has made it easier than ever for consumers to address the shortcomings of a respective company.
As a result, people have taken to the Internet in droves to express their concerns. Make no mistake about it — there isn’t a company on the planet immune to the occasional negative review, including the one you have worked so hard to build.
Instead of fearing the inevitable, confront any negative reviews aimed at you. Be proactive and mitigate things as soon as you can.
Engaging with them is as much about customer retention as it is about putting out fires. Any genuine attempt to rectify a questionable situation will improve your business and its standing in the public eye.
It’s entirely possible to use negative reviews to your advantage, as long as you address the issue. With a little patience, scathing indictments can turn out to be a blessing in disguise. Use them to get recognized, generate leads and build your online reputation.
4. Skimping on marketing
Few real estate professionals realize the power of a properly executed marketing campaign. They believe that the quality of their product or service will sell itself and essentially neglect to allocate the appropriate funds needed to attract customers.
Of course, this is a misconception and one of the fastest ways to sink a company. Even the best products can’t sell themselves.
Any new real estate business needs to be marketing as much as its budget will allow. Truth be told, marketing expenditures should reflect 10 to 20 percent of your targeted gross revenue.
5. Prioritizing the product ahead of the people
At the risk of sounding too complacent, the real estate industry is a people business. It has always been that way, and it always will be.
It’s just as important to build a working rapport with like-minded business owners as it is to connect with your consumer base.
Too many business owners make the mistake of putting their product or service ahead of the customer, when — in fact — it should be the other way around.
Remember, the consumer comes first. Let people know what your intentions are, and use transparency to your advantage. There is no better way to establish trust than by putting the people first.
The real estate industry comes with a degree of inherent risk. Some of that risk is the result of shifting markets and things that are otherwise out of your control.
However, complacency is equally as destructive. Simply ignoring potential risk is perhaps the biggest mistake a fledgling business can make.
Having said that, take the time to learn from those who have come before you. Understand the threats to your business, and be proactive.
You will never be able to eliminate mistakes altogether, but it’s possible to mitigate them.
Than Merrill is the founder and CEO of FortuneBuilders Inc. and CT Homes; he’s a Yale grad, former NFL player, TV personality, businessman, real estate investor, entrepreneur, best-selling author, national speaker and avid philanthropist. Connect with Than on LinkedIn or follow him on Twitter @ThanMerrill.