Right now, some real estate agencies are paying thousands to external lead generation companies for cold contact and gimmicky campaigns designed to bring in more business.
And those who aren’t, are out hitting the streets, running mailbox drops and making calls to achieve the same result.
But what if a great opportunity to win business is already right in front of you, it’s just clouded by a ‘this is the way we’ve always done things’ mentality?
In this month’s Management Series we dive into SWOT analysis for your real estate business. We show you how one simple office activity can drive leads and build opportunities for growth.
Have you ever gone on a bushwalk? Perhaps an off-road drive? What about a big trip from one state to another?
In any of these instances, other than abundant water and provisions, the most important tool you can take with you is one of the simplest — a map.
The map allows you to identify a goal — arriving at point x — note milestones on your path and plan how you will get from where you are now to the finishing point.
Running a business is a little like heading out on an adventure — you absolutely can do so without a clear map, but in making that choice, you risk hitting obstacles you didn’t see coming and missing out on opportunities to find the shortest route to the top!
What is a SWOT analysis?
Used in both business and marketing planning, a SWOT analysis is an exploration of the internal Strengths and Weaknesses of your company and the external Opportunities and Threats facing your company.
Essentially, your SWOT is the part of your ‘map’ that helps you best identify obstacles you may need to overcome as your company grows and changes, and opportunities for better results that should present themselves throughout your journey.
The challenge with a SWOT is it is very time-specific, so like the rest of your business or marketing plan, it really needs to be updated regularly.
Unfortunately for most small-to-medium businesses, real estate included, reviewing and refining the SWOT and broader plan each year, aren’t always considered a key priority.
Why conduct a SWOT analysis?
As an agency owner, especially one who has been in real estate for many years, you can face two big risks:
1) You may become comfortable with the way things run, so you don’t often (or ever) stop to review practices to determine how you might evolve and improve.
2) You assume you have seen it all: you have so much experience and local knowledge you start to make assumptions about your target audiences, competitors, reputation and other areas that may actually have changed over time.
A regularly updated SWOT analysis can help you mitigate both of these risks.
It can help you see those influences that might damage your business, in advance, so you can plan for them or move around them.
It can also help you spot ways to build your business that might only become obvious once a range of influences are on paper and considered at the same time.
What should a SWOT include?
One of the toughest parts of completing a SWOT that is actually useful is ensuring it is detailed enough — going beyond the obvious to explore all influences, internal and external on your business.
To help you really make the most of your SWOT, here is a list of categories and questions to consider in each of the four analysis areas:
INTERNAL STRENGTHS AND WEAKNESSES
Separate answers into two lists, one for strengths, one for weaknesses. Within each list, answer the questions (and brain storm further) with statements. For example, ‘We are the only office in town never to have had a compliance issue’ or ‘Our customer service is not rated very high’.
- What does your business do better than competitors (for example, customer service, compliance, marketing, communication, branding etc)?
- What is your unique selling point? What is it you do or offer that no one else does?
- What experience or qualifications do your team members have that you can draw on?
- Do you use technology to streamline processes and reduce task time (for example, in admin, sales, marketing and property management)?
- Do you have a strong culture? Do your team members really support each other? Is everyone very motivated? Does everyone share the same goals?
- Do you have a robust (or unique) business structure and solid processes?
- Do you have a history of few or no errors or complaints?
- What is your reputation like in your community?
- What brand marketing have you done that has been very successful? What hasn’t been successful?
- What physical assets do you have that ensure a strong foundation for your business?
- Are your financial processes robust? Do you have good cash flow? Various revenue streams?
- Do you enjoy a lot of repeat business?
- Is your company and team genuinely open to innovation?
- Is your team creative?
- Do you retain employees well and attract new employees easily? Why?
- What is your leadership like? Are you respected? Naturally followed? And your managers?
- What opportunities does your team have for growth? For example, an annual training program is a big internal strength.
- Is your location a factor in your success or decline?
EXTERNAL OPPORTUNITIES AND THREATS
Separate answers into two lists, one for opportunities, one for threats. Within each list, answer questions (and brainstorm further) with statements. For example, ‘Two local offices have just closed down providing an opportunity to improve market share’ OR ‘Another agency offers a new technology we don’t offer yet, meaning our service may be perceived as less innovative.’
A PESTEL test (political, economic, social, technological, environmental and legal) can really offer some great insights.
- Is your head office conducting a national campaign?
- Has the competitive landscape changed? Are there new competitors entering, or old competitors leaving?
- Can you expand into a new geographical area?
- Can you introduce a new revenue stream?
- Are new infrastructure or other selling points being introduced where you are?
- Is there new software that can help you better retain clients?
- Is there new technology that can give you a point of difference or an edge?
- Is there new technology that might threaten your industry?
- Is local, state, federal or international politics affecting the market or your area or your primary target audiences?
- Are key influences in your community changing? For example, the population or demographic composition, the goals of the community, approach to tourism or growth?
- Are there new marketing opportunities? Are they affecting your current marketing approach?
- Is anything affecting the reputation of your brand or the real estate industry?
- In what way is the economy and industries like banking impacting the industry?
- Can a closer focus on data give you better insights so you can spend less to make more?
- How will upcoming regulatory changes impact the industry, your area or your business?
- How is the media affecting your industry?
- Are there weather conditions that are positively or negatively affecting your area?
How can you use a SWOT?
In simply documenting every strength, weakness, opportunity and threat that is facing your business, you are likely identifying factors of influence that you may not have otherwise considered. This can help you plan better and take advantage of every development. Effectively, it also provides you with a list for action.
With a little more work, a SWOT can also help you identify gaps within the market you can capitalise on in order to get an edge or even some quick wins. This is especially the case when your SWOT is combined with a through competitor analysis and target audience analysis.
As an example, in the above, you may have identified the internal strength that one of your staff members is particularly engaging and does a lot of work with the local dramatic society — great strength! In opportunities, you may see a shift in target buying audience and note more buyers are now first home purchasers as opposed to investors.
On face value, these strengths and this opportunity are very useful insights you can use separately. But together, they tell you your buyer audience has changed — they are young and inexperienced and they are looking for guidance and support.
Your engaging staff member who is happy to be up in front of crowds presenting could host a series of engaging buyer insight evenings. She could provide valuable training and education, and in doing so, build up your database so you have a long list of buyers waiting in the wings every time you list a new property, not to mention, some great word of mouth! What an opportunity!
Don’t just take each identified point on face value, consider how they overlap and affect each other, and how you might use that to enhance an opportunity for an even more effective result.