Part One: How to Create Your Most Successful Business Plan
Some real estate agents look back on the prior year with pleasure and enthusiasm. Many others look back with less enthusiasm. Then, they look forward with concerns over the strength of the market and what kind of next year they will have. They want to do what they can to ensure the most successful year. This series of articles will show you exactly how to do just that.
What Agents Do
Agents who started the year with a solid business plan know exactly where they stand. They have been evaluating their progress weekly and monthly all year. They are confident looking forward to next year.
I realize most agents don’t fall into this category … yet. This article will help you get there.
Many agents chose a goal at the beginning of the year, but haven’t paid much attention to where they are in relationship to it, perhaps until now.
At this time they may look and discover one of two things. They have reached their goal or they are close to it. Time to celebrate! But be careful. You need to set another goal or you risk declining motivation.
Other agents who set a goal discover that they don’t know quite where they are in relation to it because they have no benchmarks. This leaves them continuing to “run like a hamster on a wheel;” with continued unproductive pressure and stress. (I distinguish this from productive pressure and stress that comes with good planning.)
Finally, most agents didn’t set a goal for the year. Or they set a goal but can’t remember what the goal was or just don’t think about it again until December. This information is particularly valuable for those agents.
The following business planning work will take you about an hour if you have good data already. Some of the questions may require that you gather data on your activity so far this year. If you gather the information and follow the instructions below I promise you a business plan that will take you to higher levels of production than you have ever achieved.
So, if you are serious about your real estate career, schedule time to sit down with your computer or pen and paper and do the following.
If you get bogged down or do not see yourself completing this, just skip to the section on Lead Honesty or all the way down to the italicized paragraph at the end of this article.
Setting – Resetting Goals
What I have attempted to do here is to lead you step by step through the goal setting session that has led hundreds of agents to their best years ever. It has always been done one on one. This is the first time I have tried to reduce this to writing. I am not sure how well it translates.
Look back to the beginning of the year and
- Write down at least three things you have accomplished, personal or professional.
Once you have done this smile and pat yourself on the back.
- Write down three goals you want to accomplish by the end of the year, personal or professional. Do this quickly and instinctively at first. Just write down what comes to mind without judging it or trying to make it “right.” You can go back and make changes later.
- Write down three goals you would like to accomplish over the next three years, again personal or professional.
These three exercises set a good background for the rest of your planning.
Measurable goals are critical to your success. Following are the categories in which we set goals with our clients.
If you set goals this year were the goals in the following categories?
- Written Sales Volume monthly and year to date
- Number of Sales broken into buyer and listing sales monthly and year to date
- Listings Taken monthly and year to date
Do not set a goal in the following category. Do plan to track it all year.
- Income tracked by the month in which you are going to receive it and recorded as you write each sale
If they were not in these categories I strongly recommend that you set your goals this way for 2008.
Tracking it in this way you will know every day in real time whether you are on track, ahead, or behind the pace to achieve your goals.
Do you have monthly goals set in the first four categories for the months for the rest of this year? If so, re-examine them to see if they should be adjusted. If you don’t have monthly goals set, start this month and set them now. (Hints: Set written sales volume first. Then translate that into number of sales. Choose how many of those sales will be listings sold. That will dictate number of listings needed. Income is a result that is easy and important to track but hard to set as monthly goals.)
Weekly Activity Goals
This is a key to your peace of mind and taking time off with greater ease. Go back through your calendar and count how many appointments you have had with new buyers and sellers this year. If you don’t have accurate records do the best you can.
List them by name and source (How did the person get to you?). Now count how many you sold and add the ones you are confident will successfully buy or sell with you within the next six months or so. The result gives you a success ratio - Total Appointments to Sales.
Most experienced agents achieve a two to one success ratio or better. In other words, they sell at least half of the people they begin working with. Higher producers have a sixty to eighty percent success rate, better than half. Newer, less experienced agents and agents with weaker presentations may have a three to one success rate or lower.
Again as I said above, if you get lost or bogged down skip to the section on Lead Honesty or all the way down to the italicized paragraph at the end of this article.
If this makes you crazy and you want to persevere and continue, congratulations and just use fifty percent like this. Choose how many sales you need to make next year to achieve your goals. Multiply that times two. That’s the total number of appointments that you need to have with new buyers and sellers next year to achieve your goal. (There is an example below.) Divide that by the number forty. Forty is the number of weeks next year that you are likely to really focus on prospecting for new appointments. This allows twelve weeks, some around the December holidays, some in the summer, and more for family, health or just slow and low periods.
This creates a powerful number that gives you focus every day for the whole year.
Example: If you need 25 sales to hit your goal. Times two that means you need 50 appointments for the year. Divide the 50 appointments you need by 40 weeks to attain them. That comes to 1.25 or you need just 1¼ appointments per week for forty weeks out of the year to hit your goal.
Remember you only need to be successful with half of those appointments.
This is quite remarkable for most agents. If you have less than two new appointments per week for forty weeks over the next year being successful with just half those people you hit your goal.
Appointments each week is something you can easily control. Conducting the required number makes your goals happen. Keeping track and knowing you are on track gives you tremendous confidence and comfort. Keeping track and realizing where you are on or off track leads you to discover the precise parts or systems of your business that need your attention.
Following this methodology throughout the year has led hundreds of my coaching clients to their best years by huge margins.
What are the best ways to make the number of appointments that you need to achieve your goals? Go back to that list of people you had appointments with this year and look at how they got to you. Then look at your sales and listings so far this year and how those people got to you. The theory is that your future business is most likely going to arise from the same sources as your past business.
This research and analysis will dictate your best sources and resources for your individual business.
As you do this be sure to note who sent you referrals and reward them or reward them again. Call to say you were thinking about them and thank them again. Send a small gift. Stop by. Your attention in the smallest ways is the catalyst for them to think of you and refer you again which leads to more appointments with people likely to do business with you.
As you look at your business and consider how to make the number of appointments that you need to reach your goals there are a few questions to answer that will zero in on exactly what it will take to achieve your goals. Your honesty in answering these questions leads you to recognize the habit or the skill, the tool or the system that will make you more successful.
- Are you already generating enough leads to achieve your goals but not following up effectively or staying in touch well enough with the leads that you are generating?
- You do not need to contact all the leads that you generate. But, are you contacting enough of the leads that you are generating to make the number of appointments that you need to achieve your goals?
- Do you have the skills and approach to convert the leads to appointments with the clients? Or do you meet and speak to people but then end up not making appointments with them?
- Do you have a system to stay in touch with the leads until you discard them or convert them?
Answering these questions honestly leads you to understand the strengths and weaknesses of your lead management habits. So you can focus in on the areas where your attention will provide you with the greatest return.
Your Winning Results
Complete the above parts of your Business Plan. We call these parts Your Goals That Motivate and Lead Honesty. Then you will be clear on your goals for the year. You’ll know what you need to do each month. And you will have a clear guide for each week, even each day that provides clarity and stability that leads to peace of mind.
You will also see clearly whether attention is needed to your prospecting, communicating and converting your leads or your lead follow up as part of your plans for the next six months.
In Part Two of this Business Planning Series I will share the structure for planning your marketing, presentations, and a handful of other systems that are the foundation of your success as a real estate agent.
(Rich Levin is a coach, trainer ,and speaker who specializes in raising agent production through highly effective training programs for real estate companies and individuals. Rich Levin is President of Rich Levin's Success Corp. Contact Rich at 585-244-2700 or email@example.com or blog with him at RichLevinBlog.com.)
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