As a real estate agent, having an actual written business plan tells you where you want to go, and, more importantly, how you’re going to get there. You need to figure out how many listings and sales will it take to convert leads into sales.
So let’s start. At the top of the business plan write THREE things.
- How much you HAVE to make
- How much you WANT to make
- How much you would LOVE to make
This is your goal. This is what you drive towards. Always have this goal in mind.
Now we’re getting to the part that requires a little bit of work. But don’t worry – we made a spreadsheet for you to use so you don’t have to do the math yourself.
We need to figure out how much your listings are worth.
This is the simple part, you likely have this data all on hand.
- How many months of data you have
- How many Leads you’ve had in that time frame
- How many listings you’ve had
- How many sales you’ve had
- Your Total Sales Amount
- How much YOU made from the sales
Now – divide all of those by the months you have listed in step 1.
So if you have 12 months of data, and 12 sales in 12 months – you average 1 sale per month.
If you have 4 months of data and you have 8 sales – you average 2 sales per month. Understand?
These are your per month variables. (Seriously, the spreadsheet would make this easier)
Now you have
- Leads per Month (LePM)
- Listings per Month (LiPM)
- Sales per Month (SPM)
- Sales Amount per month (SAPM)
- And Earnings Per Month (EPM)
Now – to understand what this means – just multiply all of the “Per Month” numbers by 12. This is what you will earn as a real estate agent in the next year, assuming all numbers stay current.
Is this enough for you to sustain yourself? Is this enough for your goals?
Now break it down even further. What do you need to hit your “Want” goal? How many leads per month? How many Sales?
What about your “Love” goal? Can you reach these?
Odds are – you may need to make some changes.
But the good news is that you may not need to make BIG changes. Just a series of small ones.
Now we look at how to interpret this data.
If you need more leads to reach your goals – then you need to strongly evaluate what you’re doing to get them. Are you using your open houses properly? Are you sending the right message with body language? Are you saying the wrong things?
Leads can be the HARDEST part of being a real estate agent for many people.
If you have the leads but the listings aren’t following then it’s one of two things.
Either it’s the leads (they’re just not GOOD leads) or it’s you. If the problem is you, then this is EASILY fixable. It’s all about communication. Ask for help, do mock sales pitches, do what you have to so that you can improve.
If your houses aren’t selling, then there could be myriad factors at play. But we can only control what we can control. So how are you using your open houses? Are they a time suck that pull you away from good things, or is it the most valuable two hours of your week?
For some – it’s not that the volume isn’t there, it’s that the numbers just don’t work. Do NOT be afraid to go after properties with a higher value. Focus on people “moving up” and not first time home buyers.
See a really nice FSBO that you wish you had? Then drive up to the door and go get it. It’s tricky, but it’s doable.
Building the Plan
To succeed you need a plan. To make a plan you need to know where you need to get work done.
Step 1 – Do You Research.
You’ve done the majority of it. With the above information, you know the exact areas that you need to be focusing on. You know the areas that work well. You know your strengths, and you know what makes YouROCK. Now you need to…
Step 2 – Determine the Purpose of the Plan
Is this to build your business? Is this to grow you business? Is this to maintain your status quo? You have to understand the purpose to know where to take it.
This is your Executive summary of your plan and why you’re putting it together in the first place.
Step 3 – What’s Your “Why”?
Why are you here? Why are you in real estate? Why do you care? This is your competitive advantage over all other real estate agents. This is what you need to remind yourself of every day. Don’t just write it down, paint it on the wall if you have to.
Step 4 – Create a Business Profile
Are you a Solo agent? Do you have a real estate team? Do you have everyone you need? What’s missing? Document your team and document what you need.
Step 5 – Document All Financial Aspects of the Business
Where is your money going? It’s really that simple. Want to make more? This will help. Show yourself where you’re costs are that you don’t need to carry anymore. Paying for a P.O. Box that you never use? Cut it. Paying for a CRM platform? Does it create a return? What is the ROI?
List out the financial In’s and Out’s and then either cut the things that aren’t working or fix them so that they start working.
Step 6 – Map out the Year
Now focus on solving the problems. This is a big, and I want to make an important distinction here. Do NOT focus ON the problem. Focus on the SOLUTION to the problem.
If you’re not converting leads to listings – don’t focus on the fact that you’re not converting leads to listings. Focus on getting more listings. Be agile, adapt, change things up. Get outside your comfort zone.
Spend the first month or two trying new strategies. Take notes on them and figure out what works for you. Play to your strengths, embrace your weaknesses, find a way to turn that weakness into a strength. Catalog what works and what doesn’t.
The next part of the year (month 3 and 4) are devoted to getting stronger at what works and eliminating what doesn’t. If it doesn’t work but you really really like it? It doesn’t work. Kill it.
From here on out – it’s a matter of taking what works and make it work better. Scale (slowly). Refine, adapt, build and grow.
Include time in your business plan for continuing education, workshops, seminars, and training. Nobody is EVER done learning.
If you need any help – check out our free webinars to get FREE training on lead gen, getting the most from your open houses, leveraging social media, and building a goldmine pipeline.
Happy 2020! YouROCK!