26 Jul CAN REALTORS RECESSION-PROOF THEIR BUSINESS??
We don’t hear the word Recession as much as we did, but it does pop up (like after Europe started offering negative interest rates and Economists started freaking out)…
Making your business Recession-proof means to run it so you will not be affected should we slide into a Recession. It’s like making your house storm-proof…so it remains standing even when big, crazy storms pass through.
I’m not going to define what a Recession is. If you want to learn more, you can read about it here.
We are going to assume that if a Recession happens (or there is the threat of one coming), it typically means your Real Estate business, and therefore you, are going to suffer because of how Housing, Employment, Interest Rates, people’s ability to qualify for Mortgages, # of Buyers on the market etc. will be affected.
So having a Recession-proof Real Estate business that can ‘weather an Economic storm’ is extremely important because, as I have discovered in my work with Realtors since the early 2000’s, far too many Realtors survive on a deal-to-deal basis…or at best, they manage their Finances one year at a time (and get through the slow seasons by having great busy seasons).
For the average Realtor, if the typical busy Spring or Fall season wasn’t so busy due to a Recession (or something specific to you like an injury, extended medical leave, extra-long vacation etc.), they would not be able to cover their expenses for that year and would have to go into significant debt or…and this happens a lot…find a part-time job outside of Real Estate.
How long would you last Financially if you had a much lower than average first half of the year? What will happen to your business if/when interest rates do (finally) go up and we potentially see a significant slow-down in the market?
If you want to know…which you should IMO…contact me to do a FREE Financial Snapshot here. We’ll find out exactly how long you would be able to ride out a storm and what you can do about it NOW to prepare for whatever comes in future.
I recently read a Canadian article on the 7 ways to make your small business Recession-proof. You can read the entire article here but let’s see how all 7 apply to a Real Estate Business:
- Protect your Cash Flow – the author says “Cash flow is the lifeblood of your business; to keep your small business healthy, cash needs to continue flowing through.”
- I completely agree…but as a Realtor, if there are less deals to be had, how do you keep cash flowing?? It’s EXACTLY why I promote Saving and Investing your hard-earned income so your Investments can keep your Cash Flowing even through tough economic times!
- I speak about this a LOT in my Posts and in my live Presentations. Contact me here to learn more or have me come out and speak to your group about it.
- Review your inventory management practices – So does this apply to Realtors? Yes…because it’s about lowering your expenses yet keeping the quality of your service high.
- That’s one of the Key Actions I promote with all my Coaching clients and in all my talks…to make/keep more Money, find ways to reduce your expenses.
- Focus on your core competencies – Are you being lured into Multi-Level-Marketing schemes or working a part-time job and doing Real Estate?
- “The fox that chases the rabbit and the squirrel catches neither.” Focus on what you do best and devote your effort to that. Become the BEST Real Estate professional you possibly can be!
- Develop and implement strategies to get your competition’s customers – Let’s be clear that isn’t about soliciting clients under contract…it means ALWAYS finding new ways to stand out and ADD MORE VALUE so clients choose you over the other 40,000+ Realtors in the GTA.
- One of the ways to do this that almost no Realtors do is offer your clients support in improving their Finances (so they can qualify for the home they truly want AND afford it!). Of course to do that you need to get YOUR Finances in order first!! That’s a great reason for you to become one of my Realtor Group Coaching clients.
- Make the most of the customers/clients you have – Many Realtors spend TONS of time prospecting for new clients (and typically hate every minute of it) when they have existing clients that like and trust them that they rarely speak to.
- Look for ways to add value to your existing clients and stay in touch (through multiple formats). What would your clients think about you if you invited them to a seminar (which I can be your key-note speaker at) on Real Estate investing or How to 10x the Returns on Your Home Legally and Easily?? And it will generate business for you when they purchase a 2nd property (and a 3rd and 4th…)!!
- Continue to market your business – Many business people reduce their Marketing efforts in tough times. This author suggests keeping it the same or even increasing it.
- If most Realtors are cutting theirs and you don’t, you’ll stand out even more. Of course you have to ensure that fits in with your budget!
- Keep your personal credit in good shape – “Hard times make it harder to borrow and small business loans are often among the first to disappear. With good personal credit, you’ll stand a much better chance of being able to borrow the money needed to keep your business afloat…”
- I believe you should ALWAYS keep your personal credit in GREAT shape and I know lots of ways to do this (I used to assist Tenants to become Owners by improving their credit scores). You know the Power of great credit with your clients…are you paying attention to yours?
Recession-proof your Real Estate business and sleep easy…even when Economic storms are brewing on the horizon.