Analyze your business to achieve maximum production.

Analyze Your Local Market, Your Competition, and Your Business

Go to any party or social event and let it be known that you are in real estate sales and you will get the question “So how is the market?”  What is really being asked is whether or not houses are selling and if so at what price.  There are many factors that affect the real estate market.  There are a number of key economic indicators that market analysts follow, including GDP, supply and demand, and inflation.  And not all analysts agree in the way they interpret the data.  So let’s look at how an real estate professional should analyze the key areas that affect production, and ultimately income.

Analyze The Market.

To be successful in real estate sales, you really need to be your local expert.  You also need to have your hand on the pulse of the national real estate market and be able to convey to the general public what the differences are between local markets and national markets.  Even within your city or community, the market can vary greatly. Recognize that markets can change.  What’s hot this year may struggle later.  But knowing the overall conditions and projected outlook for an area will help you to plan. 

For example, if you look at a large metropolitan area, you will likely see a trend in movement in one direction or another over a period of years.  Land availability may dictate where new housing communities will pop up.  Looking at commercial development will many times be an indication of predicted growth in an area since companies perform extensive research before investing millions of dollars in constructing a building.  You want to work in areas that look to have projected growth, not projected decline.

Analyze the Competition.

To further analyze the market, you need to understand your competition. You must know who your competitors are, what they offer to both their agents and their clients, and what share of the market they currently possess.

Start by making a list of your main competitors.  Go through each one on the list and determine their strengths and weaknesses (SWOT analysis).  What does your competitor(s) offer that you don’t?  Why would a potential client choose your competitor(s) rather than choose you?  How big of a threat does your competitor(s) pose to your business?

Now that you have identified the strengths and weaknesses of your competitor(s), rank them on a scale from not very threatening to very threatening.  Then determine what advantages you have over your competitor(s) and how you can combat any advantages your competitor(s) have over you.

Analyze Your Own Business.

Now that you have investigated the competition, you should have a clearer idea of what you want your business to look like and how you want it to function.  You will have gathered some ideas that you like, some you don’t, and others that with a bit of tweaking could work very well with your organization. If there are areas where you identify some weaknesses, think about how you could overcome those weaknesses.  Surround yourself with talent that you don’t possess that could turn a weakness into a strength.

In Summary

Now that you have analyzed the market, your competition, and your own business, you should be able to put together a plan of action that will help you to increase your production. Keep in mind that just making the plan isn’t enough. Execution of the plan is a key component. Onward!

The above excerpt is taken from our Real Estate Brokerage course which teaches you how to build your real estate business. We cover marketing plans, create budgets, structuring your business, and ideas for growing organically. For more information on our Real Estate Brokerage course you can access our Online Catalog.

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