In reading about business plans, you may have heard the phrase “conservative projections” repeated a few times. Any projections of future revenues and costs for a business require assumptions, because, as we know, the future is always uncertain. However, to meet this definition of “conservative” projections, your assumptions must be reasonable in all areas. Here are a few ways to make sure they are suitably reasonable and your projections are conservative enough.
Your projections shouldn’t consider that the real estate market and general economy is always booming, nor that it is always in bust. If you lack reliable information with which to estimate how market conditions may affect your business for good or bad, then take a middle-of-the-road approach. Although you can generally prepare for market conditions in the coming six months, your launch may be a year out and you need to estimate five years beyond that. Be clear as to how you applied the effects of the market in general to your projections and find information on how other real estate agencies are affected by the market to back you up.
Effect of Marketing and Sales
You shouldn’t assume that your marketing and sales efforts will work spectacularly at first. Instead of thinking in terms of the greatest possible returns from each marketing channel, think in terms of percentages. Read the rest of this entry »