Today, I want to define for you the difference between having a real estate business vs. a hobby.
It starts with a mindset shift. Recently, I re-read the book, "The E-Myth Revisited" by Michael Gerber where he "walks you through the steps in the life of a business, from entrepreneurial infancy through adolescent growing pains to a mature entrepreneurial perspective......" If you struggle with where you are on this continuum, I highly recommend you read this book. It re-emphasizes the need for what I do as a coach, mentor and leader. It also pushed me to cover with you again my opinion on where a real estate broker crosses the line from a hobby into the realm of running a real estate business.
A real estate hobby is where you wait and see "what the day brings you". You execute only what is in front of you that day. There are no real systems and processes that drive your business. Any system and process you have is "between your ears" with little or no documentation. There is no predictability attached to your real estate endeavor.
On the other side of the continuum, is a highly evolved real estate business. Less than 1 out of every 100 brokers has a highly evolved business. It takes years of patience, training, investment and commitment to get to that level. A highly evolved business has a process for everything including:
- Lead Generation
- Initial Buyer Presentation
- The Buyer Process
- The Listing Presentation
- The Listing and Marketing Process
- Personal Branding/Marketing Content Calendars
- The Referral Process
- Strategic Gifting
- Relationship and Database Management
- Finances and Investing
- Team Processes and Compensation
You do not need to be at that level to have a real estate "business". What takes an agent from hobby to running a business and puts you into the Top 3% (ELP) of licensed brokers is 1 thing:
The quality and strength of your "lists.”
Quality = at what level do they exist. Strength = at what level are they "connected or charged.”
In my opinion you need 3 lists in today's low inventory, highly competitive market in order to grow and thrive:
- "Hot List". - Ninja Selling describes this as all of your prospects and clients that fall into the category of "who wants to write a contract this week." (Daily Success Habit #4)
- "Warm List". - Ninja Selling describes this as those from your sphere "that are showing signs that they will want to sell or purchase in the next year. (Daily Success Habit #5)
- "Top 100". - I describe this as your list of your TOP 100 clients that know you, like you and trust you as their real estate broker. This list is broken down into Platinum (20%), Gold (30%) and Silver (50%). This is the list that you need to create a predictable and enjoyable business. A process must be created to maintain your connection with this list over the course of the life of your business. Your goal is initially to identify, create and service your TOP 100 which should consume the first 5-7 years of your career. The remainder of your career will be spent strengthening your TOP 100.
This is where you cross the line from hobby to business. If you have these 3 lists created and a process to maintain actionable steps to nurture these lists, you have a business. Note: You can design the production level of your business based on the size and quality of your lists. Let me explain... (20% return on database).
Bonus List #1: "Referral Partners" - maintain a lists of brokers in other markets and transaction partners that respect you and the quality of service you provide your clients.
Bonus List #2: "Trusted Brokers in Your Brokerage and Market": In a low inventory setting like we will be in for the foreseeable future, you must have a network of trusted brokers within your market that you can collaborate with as it relates to inventory.
All of these lists should be supported by a social media presence. Facebook and Instagram are where most of the eyeballs are at in order to show up for the "cocktail party". If you don't, your clients and prospects will have access to 100's of other brokers.
Again, I don't care if you manage these lists in a CRM or spreadsheets. Each of those concepts are there to remind you to "authentically" maintain your relationships. You cannot "automate thoughtfulness". If you maintain these lists, you will not have to worry about where your business will originate. Your focus will shift to how can I create the capacity, systems and processes to manage the business. A highly evolved business has you, the lead broker, stepping back as a CEO and letting your team and your processes manage the relationships and transaction flow.
Based on what you heard today, do you have a real estate business or a hobby? My job is to help you identify the "what, when and how". I can't provide the "do.”
If you found this helpful, re-listen to this episode and take the time to evaluate your systems, processes, habits and routines. You can follow my content primarily on my Instagram at @askjimmiller, apple podcast searchable under Ask Jim Miller and my website askjimmiller.com.