Starting your own business is never easy. This is especially true in recently in real estate given the market conditions. Everyone tends to over simplify just how difficult it is grow and manage a successful real estate business.
The fact is, being a successful entrepreneur in any industry is challenging because you have to wear many hats. For example:
- Accounting – You have to be good at managing money, your budget, and bookkeeping.
- Operations – Administration is the glue that keeps a business together. Your business can’t grow if the infrastructure is weak.
- Management – You must be able to manage staff or delegate 80% activities to third parties such as title companies, attorneys, and mortgage brokers.
- Rain Making – You must be able to prospect and create new business opportunities.
- Salesmanship – Once you have clients to work with, you must have strong sales and closing skills to put contracts together and keep them from falling apart.
- Relationship Management – You must be able to reinforce and maintain existing customer relationships.
In a corporate environment, you are usually only required to have one skill set, or wear only one of the about hats. As an entrepreneur, you must be a jack of all trades or competent in every area. Lack of expertise in any of the above areas usually leads to failure in your business. For example:
- You can be the best manager, administrator, financer, and customer service person around, but you won’t make money if you can’t rain make or prospect.
- You can be highly successful generating sales and revenue, but if you can budget or manage money, you can spend more than you make and go out of business. A good formula to use for the success of your business is to categorize it by using the term PARFA.
P – Prospecting, or rain making
A – Appointments, which also includes salesmanship
R – Referral and Relationship Management with your past clients and sphere of influence
F – Finance
A – Administration
Each category must be managed properly, it’s important to note however, the most important activities that generate the most about of money for the time invested involve the first three letters PAR, Prospecting, Appointments, and Referrals or Relationship Management. As your business grows, keep in mind that finance and administrative obligations should be delegated to support staff because these duties take away from revenue generating activities such as prospecting and appointments. Finance and Administrative activities should be viewed as 80% activities while PAR, Prospecting, Appointments, and Referrals are almost always 20% activities.
As you schedule your activities each week, be sure to focus on 20% activities before addressing 80% activities. It is much better to run out of time with the things that don’t make money as opposed to getting those things done and then not having time to concentrate on making