Career planning for real estate practitioners
How You Can Put Your Career on Steroids

A detailed plan could make the difference between having a successful career and having just a few good years.

BY JIM HATFIELD

Where will you be in five, 10, or 15 years? How successful will you be? Will you be making thousands in commissions, or millions? If you’re a little fuzzy about the answers to these questions, you may not be taking the proper steps now to ensure your success in the years to come, according to career planning professionals.

Just how important is it to have a well-thought-out career plan? “Very,” says George Selix, chief learning officer for Century 21 Real Estate Corp. in Parsippany, N.J., citing a 25-year study of Harvard Business School graduates. “The study showed that those who had a formal career plan and followed it earned more than 100 times those who had no plan or one that wasn’t very specific.”

Fred Peterson, director of educational services for RE/MAX of California and Hawaii agrees. “Having a good business plan can mean the difference between having a great career or just a few good years,” he says.

A good career plan should be focused on more than earnings, according to Lennox Scott, chairman of John L. Scott Real Estate, which serves in Washington, Oregon, and Idaho. Scott has a life plan that keeps his business and personal life in balance and a coach who helps him stay focused on his plan.

Whether you call it a career plan, business plan, or life plan, the important word is “plan,” says Selix. It should be specific and it should be on your desk or computer for periodic review and not put away in a drawer.

“There’s a big difference between someone who has a plan and sticks to it and someone who wings it,” says Selix. “Sooner or later, the difference reveals itself in results.”

Where to start?

Hard questions and honest answers are essential to a good career plan, says Pat Lawless, senior vice president and managing broker of Long & Foster Real Estate Inc.’s Centreville, Va., office. She suggests starting with fundamental questions to determine whether you’re even in the right line of work. Topping her list are:

• Is sales the field for me?
  
• Do I have the drive, motivation, and flexibility to accept rejection?
  
• Can I control my fear of failure until I learn the skills needed to succeed?
  
• How many calls will it take to get an appointment?
  
• How many appointments to achieve a close?
  
• How many closes to achieve my financial goal?
  
  Once you’ve addressed these basic questions, you can then focus on your financial goals. Include a realistic assessment of where you are now financially and include projections of where you want to be in five, 10, and 15 years, says Peterson, who teaches classes in career planning for RE/MAX. “It’s not enough to start with ‘How much do I want to make?’” he says. You also should consider:
  
• What are my current household expenses?
  
• Does that include cash reserves?
  
• Does it include risk management?
  
• What happens if I don’t close a deal?
  
• What happens if I have an auto accident?
  
• Do I have disability insurance?
  
• What’s my current debt?
  
• How much is that strangling my family’s cash flow?
  
• How am I going to put my kids through college?
  
  “By the time we finish asking and answering all the questions, someone who thought they could live well on $100,000 in commissions may find they really need $200,000,” Peterson says.
  
  In all your financial analysis, don’t forget the bigger picture, Scott says. “It’s worth taking extra time to figure out what’s important to you. When you say it’s important, it becomes important. If you don’t make this effort, you find yourself working to meet someone else’s expectations, not your own.”
  
  For some, the bigger picture may mean a career shift from salesperson to broker. And once you become a business owner, not only do you need a career plan, you need to ensure your associates and employees have one. As a leader, you need to have an activity plan for each person, an effective training program, and a mentor or coach who can help guide the team, says Lawless.
  
  Peterson agrees that good mentors are essential to career success. “Sometimes a mentor is not even someone in real estate but is someone who is willing to listen to you, listen to your dreams, pat you on the back, and hold you accountable,” says Peterson. “This kind of person is the difference between making it and not making it. It’s not the information, it’s the inspiration that makes the difference. If you have the motivation, you can find the resources you need.”
  
  Resources: Most large real estate companies have training programs that include career and business planning. A number of companies, including Mike Ferry Organization and Howard Brinton’s Star Power Systems, offer business development seminars and training. And books like Kenneth Edwards’ Your Successful Real Estate Career (AMACOM, 2003) and Carla Cross’ The Real Estate Agent’s Business Planning Guide (The Real Estate Education Co., 1994) provide career guidance and advice on how to create realistic business plans.
  
  
  Six-Month Game Plans
  If you want to make a big change in your real estate career or attain the next level of success, these six-month game plans will help get you on the right track.
  
  Grow Your Sales
  Become a Broker-owner
  Move to a New Market
  
  
  Grow Your Sales
  
  Month One
  
• Assess your present situation: How well are you meeting your financial goals?
  
• Seek advice from others in the field.
  
• Calculate the impact that adding one or more assistants would have on your sales.
  
• Consider the impact and responsibilities of recruiting one or more salespeople to form a team.
  
• Estimate the costs involved in providing office space and equipment for your team.
  
• Determine how many transactions you’ll need to cover your costs and yield sufficient profit.
  
• Consider all tax implications.
  
  Month Three
  
• Write a mission statement for your team.
  
• Develop a marketing plan and calculate its cost.
  
• Set sales and financial goals for one, three, five, 10, and 15 years.
  
• Hire assistant.
  
• Recruit additional team members.
  
  Month Six
  
• Calculate operating costs to date.
  
• Calculate total revenues vs. expenses to date.
  
• Develop financial projections for next two years based on number of transactions completed.
  
• Evaluate marketing efforts and adjust if necessary.
  
  
  Become a Broker-owner
  
  Month One
  
• Ask if this is what you really want. Do you have the skills needed to manage others? Are you willing to give up sales to focus on recruiting and motivating others?
  
• Seek advice from others in the field.
  
• Investigate broker certification courses offered by the NATIONAL ASSOCIATION OF REALTORS® affiliate, the Council of Real Estate Brokerage Managers.
  
• Investigate the requirements for a broker’s license in your state, and begin planning for how you’ll meet those requirements.
  
• Survey salespeople in your market to learn which ones might be recruitable.
  
• Calculate the number of support staff you’ll need, based on the number of salespeople you plan to recruit.
  
• Estimate the cost of personnel, office space, equipment, maintenance, and liability insurance, and determine how many transactions will be necessary to cover these costs and provide adequate pre-tax revenues.
  
  Month Three
  
• Pass broker exam.
  
• Develop a mission statement for your brokerage.
  
• Create a training program for your associates.
  
• Create a marketing plan, and calculate the cost of implementing it.
  
• Create a timeline for all phases of your enterprise, with financial goals for one, three, five, 10, and 15 years.
  
• Consider all tax implications.
  
• Hire assistant(s).
  
• Begin recruiting salespeople.
  
• Begin marketing effort.
  
  Month Six
  
• Continue marketing effort.
• Sign lease on new office space.
• Hire new salespeople.
• Implement training program.
• Review plan to date and adjust as needed.
  
  
  Move to a New Market
  
  Month One
  
• List all the reasons you’d consider leaving your present market.
  
• List everything a new market must have to meet your requirements.
  
• Research the area you’re considering to learn such things as the price of homes sold recently, the number of active real estate companies and salespeople, the extent of new home construction, frequency of turnover, and prevalence of transferees.
  
• Seek advice from associates who’ve moved to another market.
  
• Determine whether you want to join an existing company or start your own.
  
• Visit area and interview with leading companies.
  
• If you want to start your own company, estimate all costs and calculate whether you have the resources to take such a step.
  
  Month Three
  
• Move to new market.
  
• Set sales and financial goals for one, three, five, 10, and 15 years.
  
• Order new stationery and business materials.
  
• Sign up for MLS.
  
• Change Web site and e-mail address.
  
• Obtain housing and office space.
  
• Hire additional personnel as needed.
  
• Begin local marketing effort.
  
• Hold office open house.
  
• Implement training program.
  
• Begin business operations.
  
• Adjust business plan based on actual cost of operations.
  
  Month Six
  
• Review plan and adjust as necessary.
  
• Continue marketing efforts.
  
• Pursue business opportunities.