The old saying – “You have to spend money to make money” – is as true now as when the saying was originated. However this idea can be financially disastrous if an agent hasn’t first gained business sense and skills. Conversely, ignoring this saying can be financially disastrous, as well.
Beginning agents are usually familiar with sales; many come from a sales background or they at least possess the personality and temperament for sales. Hopefully, the new agent or even more experienced agents have studied the profession of sales, especially as it relates to the service industry. Much of what makes a good salesperson may be hardwired in their genetic makeup, but even someone who is a “natural salesperson” should study the body of available knowledge regarding sales in order to be truly successful.
This should be obvious if you are going into the profession of real estate sales. What may be less obvious in real estate sales is that the traditional high-pressure method of selling has basically become obsolete. But the new agent quickly learns the service industry methods or they go the way of dinosaurs.
What is often even less obvious to agents is the necessity of learning and truly understanding business practices. The two types of mistakes I see being made are:
- Agents are afraid to spend money until they first start making money.
- Agents spend too much in the wrong ways on the wrong things.
I have made both mistakes, although I have a tendency to be victim of #2. One thing I have done, though, is to learn from my mistakes and adjust. Measuring the results of my marketing efforts has greatly enhanced my marketing efficiency. But first I had to learn as much as possible about standard business practices.
Being a contract salesperson IS a business and has to be run like a business. From my experience, this is where I believe most agents fall short. Putting together a budget plan and a marketing plan can be tedious and is not as sexy as selling and dazzling clients, but I think it is vital to long term success in business.
Money and time spent on a business plan is an investment which can create a very good return. It’s difficult to grasp this concept when you don’t have business pouring in, but to ignore it can mean staying stagnant business-wise, or perhaps going out of business. Spending too much on every system and gadget that comes along can deplete your bank account. However, planning and spending wisely can lead to faster rewards, long term stability and growth.
I am not going to list books to read, there are many available if you search for them. What I will suggest is to talk to successful agents who will work with you and pick their minds regarding the business side of this profession. Perhaps one or two will become mentors and you also gain richer professional relationships to boot. Search for business courses, even if they aren’t real estate specific. Learn a little bit about economics and marketing and even (I don’t believe I am saying this) accounting.
A lot of this learning doesn’t cost much at all except time. Books can still be obtained from libraries. Once you have a clear idea of what marketing needs to be done, this can cost money, but hopefully through budgeting and what has been learned about effective marketing the money invested will create the return for which it is designed.
Final caveat: take it from one so vain, vanity marketing is good for a short term self-esteem boost but is not very effective for paying the bills and building a business, but being a stingy wall flower can be just as ineffective and costly.
Mike From Savannah