Most real estate agents dream of having their real estate business covering multiple states. And while there is nothing wrong with fantasizing, it is essential to understand what simultaneously running and expanding a real estate business entails. This article will take an in-depth look into expanding your real estate business to a neighboring state and what it takes to do it right.
Before expanding your real estate business to a neighboring state
Business expansion is never a simple project. It requires ample time, energy, and recourses, and it comes with considerable risk. Luckily, there are things you can do to prepare both yourself and your business for expansion.
The first thing to do is research your future market as much as possible. Most likely, you will be up against fierce competition. And the only way to beat them is to have in-depth knowledge of how they work.
- The number of competitors.
- The potential of your new market.
- Brand recognition that your competitors have.
- Local SEO results.
These should give you a better idea of what you are getting yourself into. If the market is limited and there are already established competitors, you might have a hard time finding and reaching your niche. You need to climb out of obscurity and offer a better or cheaper service than what is already available.
Is it the right time to expand?
Two factors need to align if your expansion is going to succeed. First, your current real estate business needs to be in a steady growth period. An expansion is not a way to revitalize a stagnating business. Nor is it a way to save a failing one. The only scenario where you will have the time and resources to tackle your expansion with due care is when you already have an established business functioning well.
Secondly, the market needs to be ripe. Ideally, you will research the market history and see which factors contribute to an increase in the real estate market. New industries, government aid, reduction in housing taxes, people relocating due to remote work, etc. All can be a sign that the market within the new state is about to flourish. Your job is to time your expansion so that you make the most out of that boom.
Setting up an expansion plan
Once you’ve researched the market and established that your business is ready for expansion, the time will come to tackle it. Now, it is crucial to keep in mind that business expansion to a different state can be pretty complicated, especially if you’ve never done it before.
First and foremost, you need to determine what your business requirements are. You will have to find a new office and furnish it with the necessary office supplies. If you plan on moving your office inventory from your current state, the pros advise that you start planning at least a month in advance. Know that you will need professional movers to handle your items for you with due care.
Expect that your current business will run at a limited capacity while tackling the expansion. Ideally, you should already have a dependable team that will hold the fort while you are away. The one thing you need to avoid is that your ongoing business starts faltering while you are expanding. If necessary, train people to manage your business before starting the expansion process.
Whether or not your business will succeed in the new state is mainly dependent on how well you handle marketing. Just because you have good brand recognition in your current state doesn’t mean that it will transfer over to your new one. To help break the ice, you will need to invest heavily in online and onsite marketing. This includes:
- Local SEO research.
- Social media management.
- Promotional material placement.
- Special offers to first-time customers.
- Establishing co-promotions with local companies (movers, for example).
Your first couple of months should be about building your brand name and establishing a customer base. If your new branch isn’t as profitable as you’d hoped in the beginning, don’t worry. What’s important is that your brand recognition and customer base are constantly growing. Revenue will soon follow once you get a foothold in the local real estate market.
Budgeting, as you can imagine, presents a headache of its own. Our advice is to put every expense you foresee on paper. From relocation, buying or renting your office space to marketing and projected costs of running your business. Then, you need to outline the necessary revenue to consider your business successful. And how long you can work on marketing before your expanded branch starts paying for itself. Once you do that, we would advise that you add 20% to both your timeline and your projected budget. Unforeseen circumstances will, as a rule, occur. And once they do, you’ll be glad that you have planned extra money to work with.
The final piece of advice
By now, it should be evident that expanding your real estate business to a neighboring state carries a fair bit of stress. Therefore, our final piece of advice is to take care of yourself while tackling it. Cut out as many unhealthy habits as you can, and make sure to keep your stress levels at a reasonable level. If you start losing sleep or feeling particularly anxious, consult with a professional. Setting up a business branch in a new state will require you to function at full capacity. And that simply won’t be possible if you lack sleep or are constantly stressed out.