Simply Junior

With over 2 million real estate agents according to the National Association of Realtors (NAR), becoming a successful real estate agent takes more than just a license and a knowledge of current laws and regulations.The first year drop out range estimated to be from 40% to 80% demonstrates that many real estate agents are not as successful as they could be and research suggests that 90% give up after 3 years. The following 7 tips may help you avoid becoming one of these statistics.

First and Foremost YOU are a business. Real estate agents work for a broker, but are independent, commissioned sales people. This means that you are a small business and must run your practice as a business. Again, remember you are a small business owner. Embrace a Planning Attitude. If you don’t have a plan, then you are on some else’s plan – usually the successful real estate agent’s. During the last 10 years, what I have learned as a performance improvement consultant or coach is that most people place more value in planning a trip to the grocery store or a vacation than planning their lives either professionally or personally. Research Your Market Plan. Since you, as the real estate agent, are responsible for your own expenses, do your research specific to your marketing plan within your strategic plan. Time spent in constructing your marketing plan is definitely well spent. NOTE: Remember a business plan usually is data driven, while a strategic plan identifies who does what by when. Establish Sales Goals. Using your strategic action plan, establish sales goals. If you are new to this industry, it may take 6 months before the first sale. HINT: Use the W.H.Y. S.M.A.R.T. criteria for goal setting. Create a Financial Budget. Budgeting is critical given the up and down of this volatile market place. Your financial budget should plan for your marketing costs, any additional costs such as education and your forecasted income. Make Managing Yourself a Priority. Building a business is not easy. You must learn how to manage yourself especially in the area of time management, ongoing real estate business training coaching continuing education units, and personal life balance. Real estate is said to be a 24/7 business much like any small business. However, it is important not to lose sight of your personal life including family, friends, physical health, etc. Find a Mentor or a Real Estate Coach. Going it alone is not easy. Take the time to find a mentor who can help you steer through some of the known obstacles and help you during the “peaks and valleys.” If you have the resources, you may wish to hire a real estate coach or an executive coach who specializes in small business help and sales.

Being an incredible sales person and entering the real estate market does not guarantee similar sales success. However, these 7 tips may help you avoid many of the pitfalls by not being one of the four real estate agents who quit within one year or one of the nine who give up after 3 years.

Having a business plan has made and broken more than one successful, business idea. When a potential, small business owner is asked to write a business plan, most of them run the other way. Writing a small business – the business plan can be a complicated process. A business plan is the document you will use to sell your business idea to potential backers, venture capital firms, family friends, or just about anyone who may back your business venture.

Getting funding can be costly and extremely time consuming. It will most likely be the hardest part of starting your business. Therefore, your business plan must convey your excitement with the promise to succeed at your business venture. You maybe excited about your business idea, but that does not mean others will be as excited as you. Not only will you need to convey you excitement but you will need to make sure you illustrate the profit potential correctly. If no one can see the potential, then the odds of getting funding will be slim to none. When writing the small business – the business plan you will need to make sure your plan stands out amount the rest.

If your plan looks, and reads like a junior executive wrote it than your business plan may get overlooked. Getting your small business plan to break through the minutia. Start off with the benefits – you will want to start off with detailing what you do and how what you do will provide your investors with a sizable profit. Make your projects believable – do not just show figures, explain what will drive growth, how you plan to capture sales and how the two activities coincide. Show detailed knowledge of your market – you will need to demonstrate that you have extensive knowledge of your marketplace.

You will need to show how you plan to progress into the mass market. Introduce you and your team – this seems like a minor detail. However, you need to demonstrate that you and your team have the experience and accomplishments to achieve the profitability goals. Provide financial forecasts – make sure to keep your forecast realistic. You will want to include a breakdown on how you plan to reach your projections. Demonstrate product or services – the power of observation can go a long way in illustrating your products benefits.

Developing a plan does not have to be the kiss of death. If you structure it correctly, it could be your ticket to success.

Some may have heard of a Health Spending Account or HSA, but few know the absolute benefits to a small business owner.

When you leave employment to venture into your own business, you generally leave behind your ‘benefits’ package and suddenly find yourself with no health-care coverage. There is however, a very simple, very cost-effective and tax-effective solution-the HSA.

Most people are familiar with or have had ‘Group Insurance’ and hence are aware how the programs work. They are however Insurance programs and have limitations, restrictions and high risk of fee increases each year. A ‘typical’ group insurance program can cost a business owner $300-$400 per month for family coverage, and this coverage would have significantly low limits for dental, prescription drugs, hospital stays, etc., and would likely not cover eyeglasses, orthodontics, medical devices, certain therapy etc. Under an HSA, all of these items can be covered at a fraction of the cost, in fact, the savings under an HSA can be quite significant – consider the following example:

Jesse is a small business owner, has a spouse and 2 school – aged children. If their medical/dental expenses were $2000 per year, they would have to pay this with ‘after-tax’ dollars, therefore requiring gross income of approximately $3000 per year. However, only a small portion of the expense on for medical would be allowable as a tax-credit on their personal taxes. (medical expenses must exceed 3% of your taxable income before any is allowed for a tax credit) If they were to obtain group insurance, lets assume they paid $300 per month for coverage. Although some this would be deductible by the business as employee benefits, a portion of the plan would be a taxable benefit to Jesse, and the plan would have restrictions.

Now, let’s assume Jesse sets up an HSA for their family. By having the company contribute $200 per month to the HSA, Jesse would effectively have $2400 per year of ‘tax-free’ money to spend on virtually any medical expenses. The company would gain the benefit of a 100% tax deductible amount of $2400 per year.

As the money ‘belongs’ to Jesse, she may determine what expenses to submit for payment; orthodontics, eyeglasses, physiotherapy, contact lenses, prosthetics… and the list goes on.

There are other great benefits to an HSA as well:

Employee retention products; you can establish an HSA for your employees, setting the contribution amount at whatever you want – all employees do not have to be treated equally. ‘Bonus’ payments may be added to the HSA, incentive prizes etc. You can add an insurance component to your HSA – if someone experiences a catastrophic event, the insurance will pay when you exceed the value of funds in your HSA. You can add emergency travel medical to your plan – safeguard for when you are out of the country. One of the best benefits, completely unlike insurance, because the money is YOURS, you can carry forward any unused values at the end of the year to the next year – you do not lose any of your money. Setting up an HSA is not difficult, and generally only takes a couple of days. There is a small setup charge, however, the tax advantages as well as the health advantages far outweigh this fee.

Continuing with our cover story, lets look at the tax benefits of the HSA program for Jesse:

Assume Jesse earns $50k per year and her spouse earns $45k per year. They have family medical expenses of $3,000 per year. To cover the ‘after-tax’ cost of $3k, they would have to earn roughly $4,500 before taxes. Then, they would be entitled to a medical expense credit of only $251.62 The ending result, They still expended more than $4,000 of gross income to pay for their $3,000 in medical expenses.

On the other hand – if the company contributed to their HSA, $250 per month, they would be out-of-pocket $0. The company would realize a 100% tax deductible expense of $275 per month. (An HSA is a ‘costplus’ program that carries a 10% administration fee, paid by the company – the employee never has to pay a fee.) From the company perspective, as they have a tax deductible expense of $3,300 per year, assuming a corporate tax rate of 22%, the corporation saves $726.00, therefore, the actual ‘cost’ to the corporation is only $2,574 to give Jesse the BENEFIT of $3,000 per year in FREE medical costs.

HSA’s are not only for Corporations, a sole-proprietor can also realize an even greater benefit – if their marginal tax rate is greater than 22%. The business receives 100% of the tax deduction, whereas personally, the individual would only be entitled to a small non-refundable tax credit.

CRA, in recent Tax Information Bulletins, completely endorses Health Spending Account Programs, get yours today and give your family the medical peace of mind you deserve, and start saving your hard earned money.

One of my favorite types of projects is working on small business plans with clients. There is an air of excitement as they work out their ideas and put their dreams on paper. I always think that I might be witnessing a birth of another future corporate giant. Some of those ideas are compelling, others seem unattainable, and yet the confidence and certainty my clients exhibit leave me with no doubt that they will succeed.

The Challenge of Writing a Business Plan
As excited as these entrepreneurs are about their ideas, for many of them the actual task of writing things down in a business plan format is very hard. They would rather get started already, develop their product or service, find a location – do all the things a typical small business owner does. They have such inner clarity about every single detail and yet communicating all of it in writing – in a business plan format – seems completely against their nature. It feels too structured, almost unnecessary.

Obtaining Financing
And yet, especially it today’s world, it is necessary. Most of the time the purpose for a small business plan is to obtain financing. No matter which group you are thinking of approaching – venture capitalists, commercial lenders, potential investors – they will all want to see a formal, written business plan.

Even though many people use business plans primarily, and sometimes only, as financing tools, they tend to write them in a way that puts the venture in too optimistic a light. Even if it gets you the cash you wanted, it will not help you succeed, because if the business has not been well thought out, or if the risks are too great, it will fail.

A realistic and objective business plan that also conveys your excitement about your business idea and your confidence in reaching your goals will have a much better chance of not only getting you the financing you need, but also fulfilling the other purpose it was meant to serve:

Planning a Business
Yes, that’s it! A business plan is a “planning tool”. That is its primary function and purpose. And it does this so well that shrewd business people like investors and bankers use it to determine who will get financed by them and who will not.

And you too will benefit from using it the most when you see it as such and not only as a sales tool.

It is a structured approach to refining your ideas about your business and devising a plan of action taking into account all aspects of the future enterprise: marketing, personnel, operations and finance. It helps you translate your ideas into actionable goals and it helps to predict your financial resource needs and financial results.

As you fine tune it, you will find out that it allows you to make many mistakes “on paper” and saves you from their consequences in the real world.

Monitoring a Business
The hardest business plan to draft is your very first one. Why? Because all you have are estimates and assumptions. But after a few months of operations, you will have some real numbers and you can update your plan at that point. Planning process has to be dynamic and on-going. A plan is not something you do once and put on a shelf. If it is to you, you have not realized the tremendous value it has for your business.

It should be an integral part of your management. Use it to compare your actual results to what you were anticipating. Analyze the deviations and understand them. Perhaps what you did was better than what you planned, perhaps not. Either way, you can learn from this comparison and refine your planning and your operations even further.

Any time you plan to introduce a new product, enter a new market, change the management structure, you should first prepare a business plan for the scenario you are envisioning. And don’t think this means too much time involvement for you. After all, you are just a small business owner. You cannot behave like a large corporation with a separate planing department, right? Wrong…

Large companies have large planning departments because they have learned the value and necessity of planning, but you need it just as much, if not more, because as a small business owner you do not have the reserves that can carry you through a sales slump or a bad business mistake.

This is what I always tell my clients – small businesses need all the sophistication of large companies. They actually need it even more, they just need it scaled down and adjusted to their size.

Small business owners need all the help they can get when it comes to saving money. Small business moneysavers are imperative for the business owner to keep your head above water. There are many areas of your business where you may be able to cut costs and these may be things that you have not thought of, if you can save money in a couple of areas, it may go a long way in the money you can place into other areas of your business.

Instead of taking time each day to run to the post office and mail off your packages and letters each day, you can save a tremendous amount of time by being able to print postage at home. This is a great small business moneysaver and you will save time and money in the long run. You can also fulfill your postage needs whenever you choose and you will not be stuck on the post offices schedule.

Taking a good look at your phone bill can help you to save money. You may be paying for services that you do not use and eliminating these extras may save you a good amount each month on your phone bill. You should also compare companies and this is a great tip for small business money savers. You may find that there is a very competitive company that you can use that is less expensive then the phone company you are currently using.

You may also be paying too much for your internet service and you can also compare internet service providers also. There are many out there to choose from and you should not only look at prices, but also at the service that will be provided. You want to make sure that your internet can keep up with the use of your business and this should also be a final determination factor.

Taking a close look at your surroundings may help you discover many other ways to save money and you may be able to free up even more money and this can help you change the money that you are receiving each month in profit.

Small business moneysavers can create more income for the small business owner and there may be many services that you are not even using and only having the things you need for your business can make a big difference in your monthly income.