During the past few weeks, I have read numerous articles on Inman concerning navigating the unchartered waters of the COVID-19 virus. At last count, over 120 columns have been published addressing topics from how agents and brokers are handling their businesses to the impact the virus will have on local and national real estate markets. Inman is a tremendous source of information on how we, as real estate professionals, manage our prospects, clients, transactions and closings in the weeks and months ahead.
In my last column, I wrote about the importance of safeguarding your business during this challenging time. One crucial piece of information I intentionally left out of the column was updating your 2020 business plan in light of the onset of the COVID-19 virus. Changing a business plan four months into the year requires an in-depth discussion on how to adapt your prospecting, budgeting and overall strategy to tackle the new reality we find ourselves in at present.
My Nov. 3, 2019 Inman column laid out eight steps for crafting an effective business plan for 2020. I want to revisit a few of the key points from that column and modify them so they address how to have a plan that can assist agents and their business moving forward with the coronavirus as the “dark cloud” over our country and throughout the world.
Revise your mission and vision statements for the remainder of the year
A mission statement describes what you want to accomplish now with your business and how you get there. A vision statement outlines what your business will look like as you grow it.
With the coronavirus affecting real estate throughout the U.S., consider what the mission of your business is now. Instead of a statement such as, “I am committed to providing the highest level of professional real estate services to my clients supported by my many years of experience and expertise in meeting the needs of buyers and sellers,” it might need to read as, “I am committed to being of service and support to my clients and prospects in any way they might need me by providing the experience, expertise, and tools to assist them in navigating the real estate market during a difficult season.”
Your vision statement might need to read: “Our real estate practice will continue to adapt and be refined in the marketplace by providing the technology, support and services to meet the needs of our buyer and seller clients.” Modifications to your current mission and vision statements need to lay the path for which your business is now heading as well as reflect your personal and professional principles and ideals.
Update your SWOT analysis
As I mentioned in the November column, this is a critical piece of your business plan. You need to determine your strengths and weaknesses as you face the real estate market moving forward. Questions to ask yourself should include:
- Do you possess the right type of selling skills and expertise to work with sellers and buyers in a downturn or recession?
- How will you set yourself apart from the competition as changes take place in the market?
- Will you specialize in working with a specific group of clients impacted by the COVID-19 virus? In other words, will you work with those who are being “downsized” or relocated due to their employment situation?
- What niche should you consider spending additional time in light of an uncertain economy? Do you need to sharpen your skills with further continuing education and professional development?
- What are the biggest threats to your business right now? What can you do to overcome these threats?
- How can you adjust your real estate business in the next 30, 60 and 90 days so it can survive?
Continue to set realistic and obtainable goals for the foreseeable future
Goal setting might be considered tricky because we do not know what lies ahead for us. However, there are some basic goals you need to consider as we deal with the pandemic. Some may include:
- Reaching out to your sphere of influence over the next two weeks to check on them and their family to make sure they are healthy.
- Sending hand-written notes to past clients letting them know you have not forgotten about them during this trying time.
- Spending one day helping in your community by serving those who might be elderly, infirmed (non-coronavirus) or disabled who need meals and other essential items as they self-quarantine.
- Taking one or two online continuing education classes during the next few weeks. Also, consider webinars and other online resources to help grow your business.
- Update your website so it includes tips on remaining safe and healthy amid the COVID-19 pandemic.
These are just a few suggestions, but by establishing goals you can easily reach will allow you to remain productive and plant “seeds” for your business after the virus leaves us. Remember to set a time-frame for any goal you set. Track your goals so you know how you are doing at achieving each one.
Adjust your personal and business budgets
More than likely, our nation is in or in the process of moving into a recession. The COVID-19 epidemic has impacted our financial markets as well as the overall global economy. I hope any economic slowdown will be short-lived and recovery will happen before the end of the year. In the meantime, every real estate professional needs to take a look at their household and business budgets to determine where income and expenses currently stand as well as putting a forecast together for the next two, maybe three financial quarters.
Cash is king!
Review your current sources of income and forecast your cash flow so you know exactly how much money will be coming in between now and at least through the end of the summer. If you have closings scheduled, set aside money for taxes, your business and an emergency fund. In these uncertain times, all of us should have money set aside for unexpected expenses.
Reduce your debt.
You need to develop a debt-reduction plan as soon as possible. Debt is what stands in the way of us having the money we can spend on the things we need and want. You should develop a plan that will reduce your debt over a specific period. Look at your credit card balances as well as any other consumer accounts. Unpaid credit card and installment loan balances continue to rise with high-interest rates with each billing cycle.
You need to do everything you can to reduce this type of debt. Consider transferring your high-interest credit card balance to one that provides a low percentage rate or 0 percent for a certain length of time. Another option is a debt consolidation loan that can will have a set monthly payment at a lower interest rate. Whatever you choose to do to attack your debt, act now.
Temporarily discontinue high-cost tools and products.
Times are difficult right now, and you are going to have to make some hard decisions about where you are spending money in your business. For the next three to six months, you may need to discontinue your online lead generation system and focus more on calling and mailing to your sphere of influence.
The monthly full-color mailings may need to be scaled back as well as the newsletters and other printed materials. Consider going “paperless” as much as you can and move your marketing online. Instead of printing newsletters, transfer them to a digital format and distribute via MailChimp, Contactually, MyEmma or other online electronic distribution provider. Utilize YouTube and other online video tools to broadcast updates on market conditions as well as providing tips to get a home ready for sell, negotiating strategies, industry trends, etc.
Review your household spending.
Look at your monthly budget and see where you can cut expenses. During this current season of “social distancing,” cutting costs at home may be easier than you think. With the closing of restaurants, bars, theaters, shopping malls, department stores, hair salons and other venues the options to spend money are somewhat reduced.
However, review your grocery, clothing and personal needs budgets and purchase wisely for everyday items. Dollar stores and community thrift stores, if open, are great options for low-cost groceries, toiletries and apparel. If you are finding it hard to make ends meet, speak with your mortgage company or landlord about seeking assistance on monthly housing payments/rents. Utility companies may also be willing to help with bill payments and other services. It never hurts to ask!
Develop a new strategic plan of action
Once you determine your goals for the next few months, you need to decide how you will reach them. What strategies will you employ that will bring the results you want?
For example, what can you do in the next 30 days that will impact your business the most? It might include contacting every client you have closed a deal with over the past two to three years, asking how they are doing and how you could help. Or, it might be developing a virtual first-time homebuyer seminar on Zoom, GoToMeeting or Skype sponsored by you and your favorite mortgage lender. Get creative!
Be specific about how you are going to carry out each business objective and refine your methods as you go along. Remember, it’s best to use the “rifle” approach (precise and defined) and not the “shotgun” (scattered and undefined) method to build your business.
These are unprecedented times for our industry and our country. Many of the brokers and agents we know in our communities may not survive the downward turn our economy is taking as a result of the COVID-19 virus. Some brokers and agents do not have the financial means or “know-how” to overcome a slower economy — even if it is brief. However, those who are wise and prudent in modifying their business to survive the current crisis will be the first who will benefit after the infection has been defeated.
John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”