9 Business Lessons For Real Estate Agents
Jul 19, 2009 Real Estate Properties
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When I was in a mastermind meeting with real estate entrepreneurs not long ago, I asked the question:
What lessons have the real estate bubble and the recession taught us?
I was surprised to hear that many of the real estate agents haven’t learned their lessons. I’ve learned many. In fact, I started a little notebook in which I detail new lessons as they are delivered to me - which is just about every day. I’m hoping to keep this notebook at the ready for the next recession, whenever that may be.
Let me share some of the lessons I have learned.
1. Lines of credit CAN and WILL disappear. Don’t make the mistake of thinking your personal or business lines of credit can be taken for granted. It’s likely that, in the worst of times, when you need them the most, they cannot be counted on. The lesson is that it’s necessary to build large cash reserves. Maybe even draw on your credit lines when they are available and put the money into a savings account and make the interest payments.
2. New credit will be difficult to access. Your credit score won’t matter much. See No. 1 above.
3. Business opportunities change rapidly. You have to be proactive. Spotting new trends and adapting to changes. What are larger businesses doing to adapt in this economy? Copy their strategies within your own business. Where is the money in your marketplace? Look around and pay close attention. Follow the money. Be decisive. Change things on the fly.
4. Your clients will be very nervous about buying and selling. Try to understand their point of view, this shift in their mindset. Alter your client communications in accordance with this shift.
5. Keep your overhead low. Overhead will take a business down very quickly. Don’t take on large office space. Don’t take on too many employees right now. And especially, don’t take on large fixed expenses within your business. Try and keep your business expenses variable, reducing these expenses quickly, if you have to.
6. Improve your customer service FAST. When the real estate market was going gang busters, we let our customer service slip. It didn’t matter too much. This was a big mistake. Start going above and beyond for your customers. Don’t give them any excuse or reason to go elsewhere.
7. Look for ways to offer lower prices on services or products. When money becomes tight, your clients will look more to price than anything else. Be prepared to quickly adjust your pricing to remain competitive.
8. You have to have multiple income streams in place. When times are good, prepare for leaner times by creating multiple income streams. Diversify, so that losing one source of income doesn’t mean disaster. Multiple sources of income are like life rafts on a big ship; they can save you from drowning.
9. Cash is king, and it makes kings when times are tough. If you have cash built up for the bad times, you could take advantage of many opportunities during bad times. Look around. Properties can be bought for pennies on the dollar; stocks are languishing at never-before-seen prices in some cases. Buy when others are selling, and sell when others are buying, and you won’t go wrong.
I hope this article will help you eliminate mistakes in your business. Lessons like the ones taught in this recession will continue to be delivered to you. Eventually, you have to learn them. It’s best to learn them the first time around!
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