Franchising is a fantastic way to run your own business at a lower level of risk, following a proven business model and counting on the support of your franchisor. One of the most lucrative industries that you can do this in is real estate, but in order to kick off your successful estate agency franchise, you’ll need a watertight business plan.
In this article, you’ll discover how to build that all-important business plan. In a sector like real estate—thriving, but buzzing with competition—it’s important to do your due diligence. To know where you stand in the marketplace, so that you can figure out where you can stand out.
It would be hard to ignore the buzz around housing right now. Homes are selling in the blink of an eye, buyers continue to enjoy historic low mortgage rates and real estate professionals are soaking up opportunities missed from last year’s spring selling season. For many, a career in real estate has never been more enticing.
—David Marine, Forbes
Building a business plan for a real estate business
Building a business plan for a real estate business means assessing the market, and determining your place in it. You’ll often be helped with the process of business planning by your franchisor. Here are seven crucial tips. If you follow them, you’ll come out of the other end with a plan worth being proud of...
1. Follow a clear structure and check sections off as you complete them
Every franchise business plan should include:
- An introduction
- A description of your business
- A description of your products/services
- A market analysis
- Operational details and plans
- An advertising and marketing plan
- Premises details
- Financial details
- Profit and loss forecasting
- A cash flow model
- An appendix including any other necessary items
As you’re creating your plan, ensure that you follow this structure, and use it as a checklist to be certain that you’ve covered every necessary base. Introduction? Tick. Description? Tick. So on and so on, until you’ve included everything you need to include within your plan.
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2. Determine clear goals for your real estate franchise
When you’re starting your own estate agency business within a franchise network, goal-setting will be crucial to your success, helping you to increase your dedication, determination and motivation. Set specific, measurable goals that you can actually achieve. Goals that will help you to keep moving, even when you’re not seeing immediate results.
When you have your goals, you can centre your business plan around them. Write a list of quantifiable aims for your business, commit to them, set them in stone in your business plan, and don’t forget to reward yourself once they’re achieved.
3. Include financial details and projections
Lay out your franchise’s monetary situation, and any financing options that you’ll be utiliising. Determine the point at which you’ll break even, and the wage that you’re planning to take.
All of this will be especially important if you’re building this business plan with the intention of putting it in the hands of a bank, who will either approve or reject your loan application partially based on the contents of it. Back up your projections wherever you can, and try to keep things concrete and realistic.
4. Analyse the market and find your targets
Analysing the real estate market will be a key component of creating a successful business plan for your franchise. You’ll need to understand need and demand so that you can exploit any potential gaps in the market, and so that you can truly and completely define who your target audience and ideal customers are. You should:
- Look to established franchisees and examine their existing customer base
- Analyse the products and services you’ll be offering
- Identify specific demographics to target
- Conduct market research
- Interview customers of the franchise network
- Ask your franchisor for any available sales information
Target marketing allows you to focus your marketing [budget] and brand message on a specific market that is more likely to buy from you than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.
—Mandy Porta, Inc.
5. Assess your local and national competition
Looking to other estate agent franchise businesses and estate agency companies will help you understand need and demand, too. The sector directly employs more than 1.2 million people and contributes over £100 billion to the economy every year [British Property Federation], so competition is fierce. Analyse your local competition by:
- Determining which agencies are the biggest in the market
- Assessing the resources of other businesses
- Analysing how other businesses are using their assets to stand out
- Understanding and noticing gaps and needs that your competitors can’t meet
- Determining how you can fill those gaps
6. Dive into marketing and advertising
For 38.4% of companies, good marketing is the leading cause of revenue growth [Vital]. Advertising your business effectively makes an undeniable difference, and it’s something that you’ll absolutely need to cover in your business plan. Here are just a few strategies to make sure that your marketing plan is pulling its weight:
- Create a solid, user-friendly website
- Make all the content that you put out count - add value to the customer experience
- Use social media to promote and raise awareness
- Collect customer data - put it to work creating suitable advertising content
>> Read more:
- 5 Qualities of a Successful Franchisor
- 4 Things Franchisees Never Have Time for But Are Essential for Running a Successful Business
- How to Launch a Franchise and Get Noticed
- 4 Elements of a Successful Franchise
- How to Start a New Business on a Shoe-String Budget
- The Ultimate Guide to Franchising Success
7. Keep your plan up-to-date using SWOT analysis
When your business plan for a successful real estate business is complete, it isn’t really complete. It will need to be regularly updated and rebuilt as your business changes over time. One of the best ways to stay in touch with the workings, successes and failures of your business is to perform a SWOT analysis.
SWOT equals Strengths, Weaknesses, Opportunities and Threats, and it’s a simple, useful framework that can help you to figure out:
- What’s working?
- Why is it working?
- What’s not working?
- Why isn’t it working?
- What should be done next?
Running a successful franchise in the real estate sector takes commitment and hard work
Hopefully, this article has given you a good sense of all that you’ll need to put into a business plan for an estate agency franchise. There’s plenty more to learn about franchising in the real estate sector, so why not stay on Point Franchise and discover how to choose an estate agent franchise that’s right for you, or the state of franchising in the real estate sector?
Lily Sweeney, Point Franchise ©