Are you considering the life of a real estate agent?
Waking up at 10 am, hopping in the BMW, swinging over to the local Starbucks, ordering a non-fat decaf tall latte, spend the afternoon showing a few houses like on you see on Bravo’s Millionaire Dollar Listing, then at the end of every month picking up a $32,000 check for all your efforts.
A certain image has been promoted of the real estate agent. It’s often glorified as the great dream, leaving your old job, with the long hours and annoying boss in exchange for a flexible lifestyle that you are in control of.
Well, let me tell you – it’s all true!
Well sort of. Real estate is a simple business. It’s not by any means easy to do. You lose many things you might have not realized you valued in your old secure job. Let me point out the things you lose that you might want to think about before quitting your day job.
1. Kiss Reliable & Predictable Income Good-Bye
The are only two jobs that are 100% secure jobs, the funeral director and an IRS agent.
You’ve heard the argument, “Avoid downsizing, Control Your Income, start your own small business.” However, controlling your income doesn’t feel like that in the beginning.
Jay Thompson announced some interesting facts on his website, The Phoenix Real Estate Guy:
- At the end of 2008, there were 33,500 agent subscribers to ARMLS.
- 20,466 of those agents (61%) had at least one sales transaction.
- Conversely, that means 39% of agents in the Phoenix area sold nothing in 2008.
- 7,156 agents (21%) had $1 million or more in sales volume.
- Those 7,156 agents had $23.6B of the areas $29.4B in sales transactions (80.1%)
- In short, it’s the age-old “80/20 rule” – 20% of the agents do 80% of the business.
The only consistent thing of owning a business is the waves of emotional highs and lows. Even the oldest business in the history of the world still has to hustle for sales. For most, a check every two weeks FEELS more secure than the peaks and valleys of your own business.
2. You Have No Life But Work
For most employees, when they punch-out on the time clock, when the whistle blows, when clock strikes 5 p.m. — they’re done physically. Most likely, at 4 p.m. they already checked out mentally.
Small business owners don’t have a time clock to punch. They live and breath their business. They don’t ever really leave work, like Freddy Kruegar or Halle Berry work follows them into their dreams.
Now I’ve got it pretty good at the moment because I love what I do. It is not necessary for me to work as long as I do. That being said I am trapped to checking my email day in and day out, 24 hours a day, which is not ideal.
Chances are when you start your business you won’t be working 9-5 or even 8-6. Forget burning the midnight oil. At 1 a.m. you’ll be crushing caffeine pills into white powder, mixing them with Red Bulls and a slice of veggie pizza. Wondering to yourself is this what Gary Vaynerchuck meant in his book “Crush It!”?
You are the CEO, shipping clerk, and janitor.
Until your revenue can justify hiring others your hours will be long and you won’t have a weekend. It took me a long time to realize this, yet it is necessary to set realistic expectations. Life is like a walking balance bar and you don’t want to rack yourself. If you use the right leverage, systems and technology tools, running your own business can definitely be like the Timothy Ferriss’ 4 Hour Work Week.
3. You Won’t Make Real Money Until You Sell
Did you know that the majority of small businesses don’t make much more than an average salary?
Only if you’re smoking crack should you base your business model purely on financial rewards.
Many small business owners don’t make real money until they sell. When they do make the sale, they will use the money for Norwegian Cruises and doctor bills. Still, the only way to become fat cat wealthy is to start a business and sell a business.
Unfortunately, only a small percentage of businesses make their owner really wealthy. The rest only to take home a few dimes after taxes. The flip side is they still love their lifestyle and only work as hard as they want to.
Running your own business has the greatest potential to make you rich or bankrupt. Even with creditors on your back and customers mad as hell, having your own business is very likely to make you a happier person.
Keep your goals simple.
Aim for lifestyle of substance over riches. In America, anyone can get rich. Look at Warren Buffet, for over forty years the wealthiest man on the planet, has lived in the same non-Mcmansion home in Omaha, Nebraska. Contented people are rich without needing material wealth.
4. A Quick Look At Pension, Paid-Time-Off & Sick Leave
5. Got Colleagues?
There are no colleagues for the solo-preneur. You are going to be alone. You can hire employees that may hopefully become friends, yet your still the boss. You are going to be alone.
Do you remember the time when you worked in a busy, lively, talkative office sharing war stories and weekend triumphs? Do you remember Friday afternoon strawberry margaritas, team building events at Putt-Putt and shared time complaining about the loser boss who doesn’t know anything? You can kiss all this goodbye. You are going to be alone.
Okay, that’s not entirely true.
There are many small businesses that have great working environments. The difference is as the boss you have to create your own social network. Create an amazing business culture with clear goals and an open-book policy and you’ll see the office is like a disco party that happens to get work done too.
Or if you do not require employees, which is my preference, make sure you don’t turn into a lonely Scrooge McDuck. Swimming by yourself in a pool of gold coins is only fun once-or-twice.
Even if you operate out of your home, get out!
- Stretch your networking muscles.
- Organize fund-raising events and blood drives with other business people.
- Stay actively involved in gun-shooting groups and cooking clubs.
Stop reading this article, leave the home office now and interact in real, not digital life. Much like everything else with running your own business, you are in charge of your social life too.
Now you are familiar with what you lose when starting your own business.
Moving Forward,
Ps. If you still want to get into real estate, let me know, I can refer you in the right direction.
