We here all of the catch phrases from Realtors about they are a small business, self employed and 100% commission. So why do they not act like it. The Real Estate industry in general needs to mature a smidge and start walking the walk if we truly want to be taken seriously. I have written many times this year about the legacy of Realtors and their hard work to build their own brand, with the business side left alone. But it is time now. Realtors, take a minute to look at your business and how serious you are about building a company and a few smart moves to do so.
1. Incorporate – Most good financial advisors will tell you to become an employee of your company. A good rule of thumb is 50/50 for accounting. Pay yourself a reasonable wage and take owner distributions for the remainder. Your accountant can walk you through this process and the overwhelming tax benefits.
2. Track expenses – How many times do I have lunch with an agent or they buy a new phone and they don’t see it as an expense. Learning what a business expense is and what deductions you may be eligible for is far beyond what you are accomplishing by doing your own taxes. You CPA studies these things and can tell you the benefit of a write off and when you may not need it. But for the sake of looking professional, start tracking expenses and know where your hard earned commissions are heading.
3. Business Day – You may not have a listing appointment or showings scheduled but that doesn’t mean you have free time. One of the blessings of being self employed is the flexible schedule but what comes with that is the responsibility of creating one too. Build into your week a business day. A day that you sit in a workspace and complete all of the necessary tasks like receipts, marketing, bill pay and organization. Then consider that time busy. All professionals have down time but they don’t head home to watch t.v. or play solitaire. Do business!
4. Study – I love working with a good attorney, CPA or developer. They are smart and know that they do not know everything. But when they work they also study. A developer will look at zoning and trends, a CPA is looking at tax code changes and a lawyer will study previous cases and documents. They become the smart person in the room by this effort and Realtors should be no different. Just like your Business Day, schedule research time. Put a few topics together on what helps you sell and regularly look into them. From a Residential sales standpoint I will look at new buyer programs, interest rate trends and new neighborhoods being petitioned in my market. This takes time and focus so stick to a schedule and take notes, as time progresses you will learn to be looking for this data naturally. But in our continued efforts to be seen as an expert resource and value center, this is the way to do it.
5. Sell – building a business takes one thing and thats sales. Realtors tend to sit back and take referrals because selling is uncomfortable or uninviting for some but a necessary professional evil. Set yourself up to be a sales person first and foremost. Then manage your business. As you grow and make money you may need to hire a business manager or outsource some of this work. But always continue to sell and generate new leads.
I want Realtors to succeed and be respected as a small business so I try to share some of my thoughts and mistakes made along the way. It always bothers me the lack of effort to reverse the “part-time” image we portray. I would be glad to share with you any resources or contacts I may have that have been advantageous over the years.
-curt
