NOTE: This was written in the fall of 2015! Enjoy this article before the sequel arrives in the fall of 2018.
Did you know that 2,973 (1) new Realtor associate licenses were given in the last 12 months in Colorado? I’m not sure how the rest of the country looks, but the Denver, Colorado market has been crazy this year. I kept hearing about 10 to 20 different offers on one house, hours after it went up for sale. So this may be an excellent career and small business choice based on this crazy market weather.
But I had to ask myself why did 2,973 people decide to get their real estate license? Are they buying a house and thought they would save money? Do they have 12 friends they know who are going to be buying/selling houses the next year? Are they going to become a landlord or buy houses and flip them? Is the HGTV channel an influencer? I’m not an agent and I’m none of the above. I work with small businesses with their sales force automation, customer relationship management (CRM) solution choices and email marketing platforms. I usually service manufacturers, financial institutions, healthcare, banks, and many, many small business owners.
My company began servicing Realtors the past couple of years when we received calls to assist them in their business processes. For example, accounting, filing and tax organization, how to keep up and organize their communications to stay “top of mind” with leads, referrals, prospects and previous clients. Once I worked with a few Realtors I realize this market segment needed a product or a solution to help them find the right mechanism to address these issues. A Customer Relationship Management (CRM) solution would be the right catalyst to jump start their business into an efficient communication hub of high energy and professionalism.
Yet, working with one Realtor at a time was time consuming and expensive for them. So, how do we ramp up the efficiency, decrease the cost, and reduce the time consumption? If ever there is a complaint in getting started with a new solution, it’s the learning curve. With many giving up!
So, we needed to figure out a solution or a product that could easily educate and train in a short period of time to reduce the cost to them. This product or solution needed to be able to communicate the strategies and benefits of a CRM in their business, how CRM features work to build their business, how it can automatically send an e-newsletter monthly to stay “top of mind” consistently. To also know who was opening their e-marketing campaigns, who are their hot prospects, how they got referrals through consistent and disciplined processes, and this product or solution had to be accomplished in one day. Oh, and it was decided it needed to be approved for continuing education credits (CE) by the governing regulatory agency for Realtors.
The answer to this was: “The CRM Workshop for Realtors” for 8 CEs that could be completed in one day. Well, it turned out finding the right CRM, building a workshop and getting 8 CEs approved, was the easy part!
The daunting effort came in the form of some ugly statistics for both small businesses and Realtors specifically. “8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn.” (2) In real estate, only a few new Realtors renew their licenses again.
If we use that 80% statistic for our new 2,973 Realtors, then only 595 of them will still be around the next couple of years! We may have built a great Customer Relationship Management workshop for the Realtors to help them achieve their business success, but how many will be here to implement their new skills the next year?
What’s the reason for this? We can pretty much summarize the reasons we’ve read in a billion articles and books about small business failures, but let’s add a Realtor flavor to them:
Choosing the wrong business with the wrong expectations. One of the worse answers to the question why real estate is, “I love houses”. Well so do I, but I don’t sell them I just live in one. This is a business not a hobby which brings me to the next point.
Real estate is a people business. It’s not a 9 to 5 job, it’s all the time, every day in the beginning till you figure out how to build a support system to have that life/work balance recipe in place. 72% of all small businesses are built on referrals regardless of the industry. (3) So, it’s up to you, the 2,973 new Realtors to go out and build every day, your network, your sphere, and your referrals.
People can be demanding, impossible, crazy, wonderful, inspiring and on top of that this is a business where the customer is always right, and you have to navigate personality sand pits! This is not the same as being in a retail setting selling. This is selling from pounding the pavement of prospecting, nurturing, converting, then servicing, closing, and then maintaining the relationship till the next transaction with that client in the next 5 to 10 years.
Realtors need a business home, a broker. I was surprised to find out that brokers don’t offer extensive business classes on accounting, workflow processes, how to sell, how to list, and how to navigate all of the technologies to help the new Realtor build their business. That means initiative and a lot of it, to find the right mix of technology, to help them automate parts of their business and professionalize their presence. It means finding training classes on specific skills and finding mentors in both real estate and business.
Underestimating the discipline and consistency in hard work. It’s not a rumor, it’s true, a new business owner can work up to 90 hours a week building their business. So you better love what you’re doing. Let’s emphasize, you can work hard but also work smart. We can be so busy all day and not be productive.
A Realtor, who is my client, Chani Olson, had come to me for help with her business processes 2 years ago because she was starting all over. She had stopped being an agent to bring up her two awesome boys 5 years earlier. She dug through papers, notes and files to find her previous clients so she could reconnect. Rebooting her business was scary, fear laden, and she worried of what she didn’t know. Her fear was also the engine to work hard, rebuild and be a great student. She successfully initiated every single strategy and feature of her CRM, she has become the best contract writer by both doing and asking for advice from mentors.
Could our 2,973 Realtors do what Chani has done? Good question, for each of them! Today Chani could be their mentor!
Do I think it’s possible to help all 2,973 new Realtor associates be around in 2 years? No. We all learn by doing and some of these new Realtors will learn a lot. They will learn they don’t love real estate as their business, they will realize working for a corporation is more their cup of tea, and some may stumble right into their passion while going down this path. Life is doing, finding, tripping and exploring. The 2,378 won’t have failed by not continuing with the real estate business but found another path for their journey.
Copyright © 2018 by Jeanne E. Reynolds – All Rights Reserved
1 “CAVU Online.” CAVU Online. Colorado Department of Regulatory Agencies Division of Real Estate, n.d. Web. 15 Sept. 2015.
2 Wagner, Eric T. “Five Reasons 8 Out Of 10 Businesses Fail.” Forbes. Forbes Magazine, 12 Sept. 2013. Web. 15 Sept. 2015.
3 De La Cruz, Emmelie. “6 Tools to Nurture Leads and Increase Referrals – SumAll.” SumAll. N.p., 01 July 2015. Web. 15 Sept. 2015.