If you stop and think about how many people become licensed and then wash out after short time, the numbers are pretty amazing.
Tom Ferry says he’s quoting NAR when he says 87% fail in the first 5 years. Here in our small town, I’ve lost count of the number who started and stopped within just a year or two.
Plenty of reasons, beginning with the expectation that real estate is “easy” and will give people plenty of free time to play while making an above average income. (That sounds just about like the hype about becoming a copywriter!)
Maybe it’s that false expectation that leads to what I believe is one of the primary reasons so many agents fail:
They don’t treat their business like a business.
Many have been employees all of their lives and have no idea what it takes to run a business. They don’t know about:
- Paying self-employment taxes
- Paying their own business expenses
- Bookkeeping, especially to take advantage of deductions
- Budgeting their money – both for business expenses and for their household expenses when they don't have a set monthly income
- Budgeting their time
- Working more than 40 hours a week
- Marketing and self-promotion
The money part is a huge issue, especially with people who have been used to getting a weekly or monthly paycheck with their taxes, etc. already deducted. They get a nice check and think they can spend it.
Then when Uncle Sam sticks his hand out in April, the money isn’t there.
And, when a month or two comes along with NO income, they have nothing to fall back on - except perhaps their credit cards.
Time is another issue. As you know, real estate offers dozens of distractions and ways to waste time. From office gossip to people who want to tell you all about the latest and greatest thing you should buy, empty talk can take a huge chunk out of a day.
Add that to a feeling that you “should” be able to take time to go to lunch with friends, get to work late, and go home early, and it’s easy to spend days without doing any work at all.
But… for some it doesn’t matter, because they don’t know what getting to work means beyond showing a house or meeting with a homeowner to ask for a listing.
In truth, only the self-motivated will survive in real estate.
A new agent may go to work where a broker or mentor will give them suggestions about what to do to get going. Some might even have quarterly performance reviews to see how an agent is doing and make suggestions for improvement.
But licensed agents are independent contractors. As such they are their own bosses. Some other boss isn't going to tell them they have to make ten phone calls today.
There may be a little help and guidance, but when the chips are down, each agent has to push himself or herself, set his or her own goals, and demand his or her own performance.
In order to succeed, they have to get out of bed and get going every morning, whether they feel like it or not. And, perhaps more often than they like, they have to keep right on working when other people are playing.
I suppose some can manage it, but I haven’t met any successful agents who only work 40 hours a week. Some of that work might be done at home early in the morning or late at night, but it's still work.
Marketing and Self-promotion are foreign concepts to many who have never before owned a business.
And, since real estate schools don’t generally teach these skills, they don’t even know what they don’t know. They don’t know where or how to begin.
But they need to learn quickly, because as small business owners, agents do need to market themselves.
I’ve read top agents here in the Rain who say it’s necessary to spend an hour every day on marketing.
If you’re not already a top agent in your area, perhaps it’s because you aren’t spending enough time and energy on marketing.
- Maybe it’s time to start picking up the phone to call past clients or to connect with your sphere.
- Maybe it’s time to write some useful blog posts – then share them on social media.
- Maybe it's time to choose a set or two of my real estate prospecting letters and start mailing – or put a capture box on your website and start sending them by email to folks who opt in.
- Maybe it’s time to add a client-attracting bio to your website.
- Maybe it's time to get out in the neighborhood and meet people.
If you have no appointments this week and can't think of anything at all to do, click here for 14 ideas.
Real estate is unlike any other career in so many ways.
One of those ways is that you are a small business person - but one without a store full of merchandise or a tangible product to sell. You sell homes, but you don't own them.
Your "product" is a package that includes your knowledge, your expertise, your personality, your friendship, your guidance, your time, your patience, your support, and even your comfort when things go wrong.
Marketing that package is a necessary task if you wish to treat your business like a business.
Failure stamp abd time to work images courtesy of Stuart Miles @freedigitalphotos.net
Gift Box Image courtesy of Master isolated images at FreeDigitalPhotos.net