Starting a Real Estate Company

Starting a real estate company involves understanding a variety of key factors and deciding on a specialization. The first thing to start with is a business plan. Without one, you'll be lost in no time. You may be busy and doing things, but you won't know if you're headed in the right direction, or if your activities are having impact on helping you achieve your long-term goal. The process of creating a business plan will force you to answer important questions critical to your success.

Legal Structure and Budget

First, decide what kind of real estate company you want to run. Will your company be a sole proprietorship, a general partnership, a limited liability corporation (LLC) or a corporation? Will you run your company out of your home or open an office? Do you plan on hiring agents now or in the future?

You'll need to develop a detailed budget, even if you're operating on a shoestring out of your home or a very small office. Include categories such as advertising and marketing, operating expenses such as phone, Internet, listing services, rent, tech support and more. No line item is too small to be included.

Company Structure

Consider how you'll set up the internal structure of your real estate company. Develop a commission structure for yourself, and how you'll pay for advertising expenses. In some ways, it's good to think of yourself as an employee of your real estate company. This may help discipline you from taking too much out of the company. Consider expenses such as referral fees and other costs that would be divvied up among sales people. This will be a good exercise in getting you ready to hire additional agents later on.

Find Gurus

Real estate agents tend to be the type of people who get things done. They feel as if they can handle anything. Don't fall into this trap. Find gurus who can help you with what you truly don't know. Spend the money to have an Internet expert set you up a website and local web presence. The days of Yellow Page phone book advertising are long gone. Get an attorney to look at important documents. If you need help with marketing, hire someone to give you some advice. You may not need this help long term, but if you establish a relationship early, you'll have trusted resources you can turn to later on.

Develop a Brand Image

Real estate is ultimately about results -- getting the price for a home you're offering or finding a home at the right price for a client. However, people want to work with someone who presents a professional image. Invest in a logo and polished marketing materials. Then stick with it. Your brand image will take hold after time. All those mailers you send to prospective clients will begin to make an impression, as long as you stick with a predetermined color scheme, message and style.

Determine a Niche

Will your primary market be existing home sales or new homes? Will you work primarily in one area of your market? The best strategy is to find an underserved market that offers good financial rewards and work it. While you don't want to turn away opportunities, don't try to be everything to everybody.