Why did you decide to be in real estate? Since agents are independent contractors, do you like the freedom of being your own boss? In spite of that I am sure you understand, “No Risk, No Gain.” You are an entrepreneur if you are are real estate agent. You take risks but you also have a business plan. If you do it right you know the difference between bare risk (like Las Vegas) and managed risk.
Using the investment community as an example you can be a great risk taker, do day trading including option buying and ride a roller coaster. Or you can make a managed long-term diversified investment plan. Both choices involve risk, but the second choice of diversifying manages that risk and results in a successful outcome. A successful entrepreneur manages risk.
Michael Gerber, in his book “The E Myth Revisited”, discusses what I would suggest are the unnecessary bare risks in entrepreneurship. The e-myth or the entrepreneurial myth as described by Gerber incorrectly assumes that the desire of the new business owner or entrepreneur, plus capital, plus a profit goal will result in success. This lack of true understanding of what it takes has caused businesses to fail.
For example, I notice many restaurants opening and closing. The concept sounds simple. Some people love cooking and have some great recipes. They feel that because they understand how to create a great meal that, therefore, they would be a natural to open a restaurant. The business can open and make sales. The owner may spend all his time working the kitchen without any oversight of what is happening to the operation and profit in the restaurant.
If you fail to understand the nature of the business, then the business will fail. In order to manage your risk, you need to have a plan, work that plan, and manage the results.
I have found that the enterprises in Westchester County that I have coached and consulted have had success when they have followed the following points.
- The enterprise has a clear vision. How does it look when it is successful? What is the future of the business five to ten years from now? How will it adapt to change?
- Who are the customers now and in the future? What is the unique value proposition; what sets the business apart from the competition? How does the business acquire customers?
- How does the business work rather than what work is done by the business? What processes and procedures are in place to facilitate the smooth operation of the business when the owner is not present?
- How does this business generate profits rather than how does the business make sales?
- How is the business structured to meet the needs of the customers? How does the business build loyal customers?
- How does the business hire, motivate, and retain the best people?
- Can this business continue to grow and duplicate? In other words, is this a sustainable business?
You are entrepreneur if you assume the risk. But you gain if you manage risk by having a strategic plan and working your plan. For a similar post on our web site see ARE YOU DOING WHAT IT TAKES TO BE AN ENTREPRENEUR?
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