Make a business plan for a real estate agency

5 Steps to Writing Your Franchise Real Estate Agency Business Plan

Do you want to open a franchise brokerage? To do this, you need to convince bankers, or even outside investors, to fund your project. To do this, you need to write a complete business plan. Here are 5 steps for writing a real estate agency business plan.

Present the team and the genesis of the project

In real estate, more than in any other industry, the franchise candidate’s experience, skills and credentials are fundamental to the success of the project.

Indeed, two main scenarios can arise in franchise real estate:

  • Either the project leader joins a network of agents† In that case, this section of a brokerage firm’s business plan should highlight the project leader’s commercial experience and specify that as a prospective broker, the T-card is not required as he will be acting under the mandate of the Network Head.
  • Either the project leader integrates a franchise of brokers† In that case, this part of the business plan should highlight the experience, degrees or future education that will allow the candidate to obtain the T-card essential to work as a real estate agent.

The credibility of your franchise brokerage project directly depends on this first part of your business plan. Don’t hesitate to describe your professional background in detail and compare it with the skills needed to succeed in real estate.

Present the study of the real estate market

The FNAIM but also the notaries of France regularly provide fairly accurate data on the general state of the real estate market† And this down to the provincial level. You should therefore initially rely on this data to present your research of the real estate market.

But in a second step you need to analyze the local real estate market

  • Number of houses and apartments in the whole area;
  • Average income;
  • Average prices per square meter according to the type of home;
  • Number of transactions per year;
  • Average useful life of a home;
  • etc.

Third, you need to cut out your catchment area divide them into quarters and apply the same criteria to them. The goal: to demonstrate that you have a thorough knowledge of the market and its characteristics.

It is also strongly recommended to list and analyze the competitors present in the catchment area: what are their strengths, their weaknesses, etc. And this to show how your project can fit into this market.

Uncovering the Marketing and Communication Strategy

When setting up a franchise business, be it a brokerage, brokerage business, or any other business, the marketing strategy and the national communication strategy are determined by the head of the network : This is the whole principle of the franchise.

In principle, this part of your business plan is therefore written in consultation with the main network teams: marketing positioning, target, customer acquisition strategy, etc.

On the other hand, you will have to indicate how you intend to communicate and position yourself in your catchment area. : even if the head of the network offers you his support and guidance, this local communication falls under the franchisee’s prerogatives.

Recruitment of individuals selling their property on shopping platforms, publications in local newspapers, recruitment of specifiers/partners (finance brokers, bankers, etc.), distribution of flyers in mailboxes in neighborhoods with high dynamics, etc. : there are many solutions to replenish leads from the network header. You will need to specify in this section of your brokerage firm’s business plan which individuals you wish to employ.

Demonstrate the economic model and present the financial forecasts

The business model is directly dependent on the chosen real estate franchise.

  • If you chose to become a real estate agentwill essentially be a matter of presenting the amount of commissions you will receive from the brand (generally from 50% to 90% of the commissions on sales), as well as your fixed and variable expenses (telephone subscriptions, announcements of distribution platforms, estimated travel costs, any royalties to the head of the network, loan repayments, etc.).
  • If you have chosen to open a brokeragethis part of your business plan will be similar to any other company: fixed costs (rent, personnel costs, various subscriptions, etc.), variable costs (travel costs, drafting deeds of sale, etc.), royalties on the head of the network and of course the revenue forecast, consisting of commissions on sales but also rental management, etc. Real estate agents do indeed have more costs than brokers, but they have a wider variety of sources of income.

To build these numbers, and especially the revenue forecasts, you must rely on:

  • On the data from your market research, by extrapolating your transaction volume, properties under rental management, etc. †
  • About the data coming from the headend : the latter can indeed help you to refine your financial forecasts thanks to the data of the agencies already established.

Write the summary

The final step in developing your business plan is writing the executive summary, an introductory summary of your business plan. Clear, concise, effective, it covers the main points of your project while arousing the interest and curiosity of the reader, usually a banker.

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