Starting a real estate business is not easy. People who start a real estate business must be committed, determined, and unwavering. On average, real estate businesses get 5 deals within their first year- and that’s if they are lucky. However, there is help out there, and you don’t have to do it all on your own. By taking all of these things into consideration, you will be able to give your real estate business the best start. A good start for a business will lead to greater success down the road. 3 out of 4 real estate agents fail within their first year- but not you. If you keep all of these things in mind, starting a real-estate job doesn’t have to be so risky. This candid, realistic guide will make sure that you know how to start on the best foot.
Identify Your Customer Base
Before you begin your business, you must decide what niche your business will operate in. There are many different niches in real estate. Residential real estate helps people find their own personal homes. Commercial real estate deals in office space for businesses like yours. There are businesses dedicated to holiday and vacation homes, income properties, and rental properties. Your business simply cannot sustain accommodating all of these different niches. By deciding which niche your business will support, you will be better able to line out goals, identify your customer base, and start making your business plan. It would be recommended here to research what each of these niches is like to work in and how lucrative each is- so you can decide how you want your business to look. Making these decisions early on will only help streamline the success of your business as your business develops, and will also help you boost your retail sales.
Make a Business Plan
A successful business simply cannot start without a detailed and well-thought-out business plan that has taken into consideration everything it can. A well-detailed business plan will give a plan for how you can achieve your business goals. It will ideally include financial objectives so that you do not go over your budget. Here are the main steps when creating a business plan.
The main things to consider when compiling your business plan are:
- Clarifying your business idea and aims
- Identifying potential problems
- Set out goals for the business and timescales for said goals
- Figuring out ways to measure your progress
Set up Accounting and Bookkeeping
Your real estate business will need to record in detail for tax purposes and also to track your cash flow. Setting up an accounting and bookkeeping system will be crucial when tracking and securing the success of your real-estate business. Accounting keeps a record of your organisation’s financial information, while bookkeeping categorises your financial details. Hiring a bookkeeper and an accountant is really important when it comes to recording and analysing the financial details of your business. Having your accounting and bookkeeping done by professionals will reduce the risk of any mistakes made by just doing it on your own. An accountant and a bookkeeper that is well-versed in property law and tax will be able to construct a good financial plan for your business.
Register Your Business
You’ll have to register your business with the government to be able to operate. Most businesses trade as sole traders, limited companies or partnerships. It’s simpler to set yourself up as a sole trader, but this means that you are solely responsible for the financial affairs of your business. If you set up a limited company, your business finances are separate from your personal finances. However, there are more management responsibilities. Some people get help from a solicitor, but you can do this yourself. If you have a business partner(s), a partnership might be the best way to go. This way you will share the responsibilities for your business debts.
Consider Business Insurance
It might be tempting to not have to pay out for things you don’t need to. However, insurance is a surefire way to make sure your business is safe. There are many different types of insurance. Professional indemnity insurance helps you protect your business if things don’t go as planned and your customer is unhappy with your service. Personal accident insurance will help you if one of your employees or partners has an injury and is unable to work. If you consider getting an office for your real estate business, office contents insurance will help you protect your business operations if your computers and furniture are stolen or damaged. Cyber and data insurance will help keep your business safe from cyber-attacks or if your client’s personal data is compromised. You may need to consult wealth recovery attorneys to create a plan in case your financial data is stolen. This is similar to crime insurance, which protects your business if you are a victim of criminal activity. Credit insurance covers businesses if customers or employees do not pay their debts, which could be useful if you employ contractors to work on your properties but they do not do the work. Making sure you’re insured is paramount in making sure that you are protected in case the worst happens- even with the best business plan, getting insured is the best way to protect against this.