Managing Your Success as a New Real Estate Agent

You have worked hard to obtain your license to become a real estate agent and are excited about beginning your new career. Now it's time to learn how to handle the business of being a real estate agent. Over 40% of new real estate agents drop out of the business during their first year while nearly 90% give up by three years. Below are tips that can help you survive this highly competitive profession.

Treat your new career as a business. Although you work for a broker you are an independent, commissioned salesperson. You are now responsible for your own income, tax withholdings, marketing and budgeting as any new business owner is. Thinking like a business owner will help you in your planning and budgeting.

Plan ahead. If at all possible it is a good idea to have a safety cushion of at least six months income in your savings to help you through your first few months of selling real estate. It isn't unusual for new agents to not make a sale within the first six months. Also try to reduce your personal debt as much as possible so you are not driven by need of income over the need to help your clients find the best deal for them.

Budget, budget, budget. Running your own business means budgeting your business money and using it toward the most profitable end. As a real estate agent you are responsible for your own marketing expenses, car expenses, business expenses and additional training seminars or conferences. It is recommended you put aside 10% for marketing, 4% for business expenses, 5% or more for car expenses and 1% for continuing education. You need to spend money to make money so it's important to plan ahead for these expenses.

Learn to manage your time. One of the hardest aspects of working for yourself is managing your time properly. While you don't want to work 24/7 you do need to spend the appropriate amount of time on your business to become successful. Plan the amount of hours you need to work each week at your business without forgetting to leave time for family and personal time.

Consider opening a business line of credit. Almost every small business has a line of credit to use for business purposes or as a buffer to get through slow times.

Remember that you have write-offs. Because you are a small business every expense becomes a write-off for taxes at the end of the year. Car expenses, mileage, business cards, advertising and many other items you use to run your business can be written off. Be sure to save your receipts and keep track of these important tax-saving items.

Put aside tax money first. After every commission calculate your tax withholdings and put that money aside so you have it later to pay taxes. Don't fool yourself into thinking you can spend it now and put some aside later. If the money is put aside right away you won't miss it and it will be there for when you need it.

Take stock of what is working for you. After a few months look over how your successes compare to how you are marketing yourself. Are your newspaper ads bringing in the most business or your website? Have you listed more due to going out on cold calls or by office drop-ins? Once you know which marketing skills are working the best you can concentrate your time and money on the profitable ones.

Give yourself time to succeed. Try not to get discouraged after the first few months and give up. Like any new venture being a successful real estate agent will take time. Understanding this in the beginning may help you hold in there during the slow times so you can build up to the success you've worked so hard for.

Being a successful real estate agent is hard work but if you are determined and understand that it takes time to build up your business you are sure to see rewards down the road.