Count Your Cost Before You Build

Today's Sunday God First Post is based on Bible Scripture Luke 14:28-30 that says, "But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you. They would say, ‘There’s the person who started that building and couldn’t afford to finish it!’"

Although written over 2,000 years ago, this scripture still holds true today in our modern and sophisticated world. My heart sits heavy to discuss How to Start and Run a Successful Real Estate Business (or any small business for that matter) using this very biblical principle. It's not so much about building a "house" per se.

Your Financial Plan is Your Blueprint for Success

Most brokers teach rookies to begin with a business plan. I don't think that is correct. One of the most important thing that a person who is considering real estate as a career path should always begin with a Financial Plan. A business plan tells you where to focus and more often than not, the marketing strategies include spending limited financial resource. Unlike your business plan, your Financial Plan involves creating a dirty "B" word ie BUDGET.

If you didn't know how much you have in terms of savings and liabilities (debt), how could you know:

• How long could you stay in this business until your first paycheck rolls in?
• How much is your monthly obligations (payments you need to make)?
• How much can you afford to invest into your business?
• If you are truly financially ready to work for yourself?

Planning Takes Time and Considerable Patience

Hence, your financial plan is truly your blueprint on which your business should be built upon. Yes, you might discover some truths that could set you back on your dreams to starting your real estate career NOW. But I promise you that patience will become your best friend if that's what your financial plan is telling you.

All I know when working with real estate agents who needed to sell something NOW in order to pay bills, they are not very nice people to work with. More often than not, you can feel the pushiness coming from somewhere. Don't ever put yourself in that position if you can control it NOW. Do something about it NOW.

Most people tells you that you will need at least 6 months of savings (ie monthly expenses) but I say you need at least 12 months. That's after you become debt-free (consumer debts). The economic situation will take a while to get better and in the mean time, besides just having to pay your monthly expenses, you will need additional funds to invest in your marketing plan.

So, what happens if you are already in this business?

If it means working harder, smarter and longer to make the extra income, so be it. It's not forever but you will become a different salesperson when you are not pressured about the paycheck at the end of the transaction. Not many agents can truly say that.

Small business owners like us need to always have a monthly budget with priority levels associated with each category. You always list and pay Food, Utility Bills, Mortgage (or Rent) and Transportation (including insurance). I call this the MUST PAY category. Then, list the rest of your monthly obligations. Small business owners may inter-mingle the personal and business expenses. Whenever possible, separate your business obligations from your personal.

I begin my week here on Active Rain with my God First posts, written every Sunday once a week. My promise to you is that the messages I share will be day-to-day related, often times related to real estate. If these topics are important to you also, I'd love for you to subscribe to my blog.

*********************************************************************************************

All contents are original. Consider subscribing to my blog for more real estate commentaries.

Subscribe via Email if you are not an Active Rain member here.

Contact:

Loreena Yeo
Realtor®/ Broker of 3:16 team REALTY
(214) 783-2210
loreena@loreenayeo.com

Super-serving Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets, Dallas White Rock Lake area communities and other surrounding areas.

Copyright © 2009 by Loreena Yeo (3:16 team REALTY).
Count Your Cost Before You Build.