5 comforts that can kill your real estate business
Comfort can be a killer if you’re not careful. In life, you either grow up or you die. Growth and comfort cannot coexist, says Jimmy Burgess. If you are comfortable in these five areas, it could be an omen that your business will decline.
Comfort can be a killer if you’re not careful. In life, you either grow up or you die. Growth and comfort cannot coexist. Comfort can often lead to complacency, and complacency almost always leads to a declining business.
Sometimes this comfort that we get used to can start to deteriorate our way of life, our life, our health and everything around us. If you are comfortable in these five areas, it could be an omen that your business will decline.
1. The comfort of a cheap
Good markets have a knack for making us look better than we are. But tough markets tend to make us look worse than we are. We’re on the back of two years where we’ve had one of the hottest real estate markets ever.
The past few years have the potential to blind agents to the fact that the next few years in real estate are likely to be tougher than the previous two years. Some agents won’t realize they need to adapt until it’s too late, but your recognition of market shifts gives you the opportunity to make changes.
The key to overcoming the comfort of a cheap market is to continually develop yourself and your business knowledge. Become a student of what agents in other markets are doing in this challenging new market environment to get things moving.
How creative are they in setting up deals when other agents wonder why they can’t make things work like last year? Do they incentivize sellers to offer closing cost credits to give buyers the opportunity to lower their interest rate? Are they hosting more open houses or getting into video marketing for ads?
Don’t let the convenience of a good market stop you from growing your business. Stay humble, hungry, and open to modeling your business after others succeed in today’s market.
2. The comfort of past successes
The comfort of past success can lead to an ego that tells you that success and continued business growth will happen automatically. Nothing could be further from the truth. What brought your past successes will not bring you to the next level of your business.
In times of frenetic markets, as we have experienced in recent years, success can seem easy. But during normal to tough market times, success comes through planning and execution.
- Do you have a set of clearly defined goals for your business?
- Does it involve measurable daily, weekly and monthly activities that indicate whether you are on track or not?
- Do you track the number of conversations, dates, and other leading indicators of future success related to real estate?
The best way to combat the comfort of past successes is to set your 2023 goals now and start executing them immediately. Real estate operates on a 60-90 day cycle, so in other words, the activities we do today translate to sales in 60-90 days.
Most agents are coasting on the fourth quarter of the year, which is why agent cash flow problems mostly occur in January and February. Do not rest on your past successes. Develop your action plan and start executing it now to ensure continued success in the future.
3. The convenience of a large database
It is not the size of your database but rather the depth of your relationships that determines your future success. It can be comforting to know that you’ve built a great database, but unless you’re constantly adding value to the people in your database, it’s of little value.
Many agents rely on the belief that because they have amassed a large database of people, they will generate business simply by the size of that database. The belief that you can just tap into the database at any time and transactions will fall is naive.
The beauty of a large database is that even if you’ve been inconsistent in the past, you can start now and develop a plan to consistently add value in a way that will provide business opportunities. This plan should include several points of contact each month.
The basis of the plan is that each member of your database receives daily, weekly or monthly updates regarding which one they own or which one they would like to purchase in the future. You should have a weekly or monthly newsletter sent out to the entire database and nurturing emails that discuss your community or upcoming community events. There should be verification phone calls and text messages every few months.
By developing an action plan with consistent communication with your growing database, your business will continue to grow.
4. Comfort from a single source
This business is constantly evolving. If you build your business from just one source of leads, your business is at risk – not if, but when that source of leads dries up or becomes less effective.
Imagine the agent with unlimited short sales in 2007, still relying solely on short sales to generate business. Imagine the agent who could generate as many quality leads as they wanted via Craigslist posts in 2014 or highly targeted Facebook ads in 2018 (targeting at this level is no longer allowed today) still trying to grow your business solely through these strategies.
Do you believe that the only source of lead you have today will be as effective as it is today, forever? How long has it been since you tested a new lead source? Diversification of lead sources is essential for long-term success.
I suggest having at least four different lead sources for your business at a time. Think of your business as a table and your lead sources as table legs. The more legs on the table, the more stable the table will be. It’s the same with lead sources. The more lead sources you have, the more stable your business will be.
5. The comfort of more money than you’ve ever had
The past few years have been an incredible time to be in real estate with record sales and record selling prices. You may be reading this with more money in the bank than you ever had. Having that money in hand is a good thing, but don’t let that comfort of money lull you into thinking your financial situation can’t change.
When we make more money than we have ever made, we tend to improve our lifestyle. This means your mortgage payment, car payment, and overall living expenses are shifted to a higher monthly cost of ownership. But what happens when the market changes and your income is lower next year than it was this year? The second your expenses are more than your income; financial storm clouds loom on the horizon.
Adjust your finances to positive cash flow as soon as possible. Reduce your expenses or find ways to increase your income. Make sure the comfort of having more money than you’ve ever had hasn’t turned into a false sense of security that your finances are bulletproof.
Enjoy the fruits of your labor and celebrate your successes. But never let your comfort rise to a level that leads to future pain. The success you experienced in the past is still available today. Keep growing and your business can only follow.
Jimmy Burgess is the Director of Growth for Berkshire Hathaway HomeServices Beach Properties of Florida in Northwest Florida. Connect with him on Facebook or Instagram.