Where are you going on Spring Break?
Florida? Mexico? Vail?
If you're lucky enough to be getting away from home for a week or two in the next few weeks, I'll bet if I really pressured you that you wouldn't just say "Florida" or "Mexico" or "Vail."
No, you would probably say something like "we're going to be staying at my Aunt's condo in Naples, just one block from the ocean. We're also planning to take the kids up to Orlando to visit Walt Disney World in the middle of the week and we have arranged for the boys to go deep sea fishing at the end of the week."
When we can "see" our plans in vivid detail, it is so much easier to make them happen. That should be the first thing Realtors do when sitting down to create their first draft of a business plan - "Picture their destination."
Realtors usually build their business plan around two paths - "net commission" or "total number of closed transactions." Either path you choose, you should begin with the end in mind.
"Do you know where you're going to? Do you like the things that life's been showing you. Where are you going to? Do you know?"
Theme song from Mahogany
Calculate your average gross commission earned per closing and then do the necessary calculations to figure your net commission earned (after any company splits, desk fees or costs). This will help you figure out how many closed transactions you will need.
Closings don't occur without first making a sale, so you'll need to figure out how many fall-outs occur in your market place - That is a transaction that is "in contract" but for some reason doesn't make it to the closing table. In today's market, it's probably safe to figure that 15% of "in contracts" will have something occur that will not allow the deal to close.
Sales don't occur without first getting a signed contract, so you'll need to figure out how many contracts you'll need to negotiate/write before a sale occurs. Not every offer is accepted and whether you're on the Sellers side or the Buyers side, you may need to calculate about a 75% acceptance rate.
Contracts aren't written or negotiated until you first have a saleable listing or a ready, willing and able buyer. Don't be Pollyanna and think that every Seller you sign and every Buyer you meet will result in a "sale." Look at your MLS and see if you can figure out what percentage of listings expire or withdraw. I'll assume you're better than the average agent so modify your percentage accordingly but also look at your track record with Buyers. They all have the best of intentions when they meet for that initial Buyer Counseling Session but a lot can happen on the way to their new home.
Sellers and Buyers don't magically appear in our data bases so you'll need to first have appointments. While it is true that any customer who agrees to meet with us must have a little bit of motivation (who meets with salespeople for fun?), that doesn't mean they will necessarily sign with us. There are many reasons we might not connect with a customer; commissions, price or expectations of services are just a few. A common rule of thumb would be that it takes 2 appointments to get 1 client.
Appointments don't happen until we TALK TO PEOPLE!!! It all starts with our efforts to prospect, prospect and prospect some more.
So now that you can "picture your destination" it's time to start doing the math. Just like you would schedule time off of work (or school), save money and make reservations, you'll need to do the same thing for a successful year.
The next "key" we will explore is utilizing SMART goals, prioritizing tasks and adding basic activities to your daily, weekly and monthly plan.
"Do you get what you're hoping for?When you look behind you there's no open door. What are you hoping for? Do you know?"