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How to Start a Real Estate Business: Three Mistakes to Avoid

When starting a real estate brokerage business there are potential pitfalls at each phase of the launch. Look out for these mistakes as you move forward.

Entering a Crowded Market

Before you even create a business plan, look at the local market situation. You don’t have to look hard to read reports about the surplus of real estate brokers in the United States relative to the number of homes available. What is important for you to remember is to go beyond this generalization to look at the local market condition where you are looking to open your business. If you enter a crowded market with a low number of homes for sale per working agent, you will find yourself either lowering fees to win clients or simply not winning clients in the first place.

Not Raising Enough Capital

Once you’ve created your business plan, the next challenge is to raise enough capital. Don’t make the mistake of looking only at the funds for pre-launch expenses such as your business’s office, marketing, and licensing. Look ahead to all of the cash reserves you will need to stay afloat during the first lean months (or quarters) until the deals start to flow. If you don’t raise enough capital you have two choices. You will either have to go back to your investors or lenders with your hands out for more or start seeking new funding options at a time when you should be concentrating on the business launch.

Going For The Quick Sale

Once you have launched the company, the challenge is to make sure that every interaction with a client works towards the brand and reputation you want to create in the long-term. If you focus on sales above all, you risk influencing your brokers to pressure clients and not act in their best interests at all times. Plan for the likelihood that every past client who feels wronged by your firm will spread the work of their experience ten times as loudly as each happy past client.

The first step to starting a real estate business is to develop your business plan. Growthink provides products and services to help you develop a professional business plan and turn your dream into reality.

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Our professional business plan consultants can create your entire business plan for you. We will make sure your business plan is sound and ready for investors so you can continue to focus on running your business. Over the past decade, we have created business plans for hundreds of entrepreneurs like you.

To speak with a Growthink business plan consultant, call 800-506-5728 or complete the form below.


Growthink helped birth my company. They got to know both me and my vision. They helped ‘smack me upside the head’ to help make sure I was realistic, about meeting expectations. As a result, they helped craft, draft and construct the right written presentation. As a result, I got my funding.

Jeffrey Ullman
Founder & CEO
Great Expectations

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