RISMEDIA, March 28, 2007-2007 is turning out to be a different kind of year and will require a different approach in order to achieve sustainable cash flow. Agents can either close their eyes and hope that everything will be ok and chance steering onto the rocks of financial ruin, or stop and analyze their raw data to determine whether there is a change in direction needed at the first quarter mark.
Where are you? Did you achieve what you had hoped you would? It's not too late. The following is a simple and fast procedure for determining where your real estate business is heading.
Use the following scoring system to grade your performance to date in 2007. Give yourself points (maximum is 10 points) based on completed work (no partial points allowed).
1 point – for recording all Activities and Appointments
1 point – for entering actual expenses itemized or in the aggregate
1 point – for entering all transactions for the first quarter
1 point – for separately entering transaction expenses associated with closed transactions
1 point – for meeting expense projections
1 point – for meeting the number of closed transactions projections
1 point – for meeting activity projections
Bonus: Add 1 additional point for each projection you exceeded in Activities or Closed Transactions and 1 point if you spent less money on Overhead or Personal Marketing than projected.
Shame on you, being below your potential. Shape up or your competition will ship you out.
Be careful you are really looking like the average agent – and no one really wants to be here. Time to do something to kick it up a notch.
Good job – you are better than most other agents. You even have the makings of being a true long term Top Producer. Make sure you have a solid plan, tweak it, stay on track and work it.
You have your act together. Excellent – 2007 should be a great and profitable year for you.
QUICK FIXES TO GET BACK ON TRACK:
Part 1 – Activities and Appointments
To assess your business plan, start by examining Activities. Did you record the Activities you are performing each week? This is a MUST-DO and is the basis for making better decisions and running your business like a business. If you did not, use the "Letter to Thy Self" tool and write a letter stating why you can't spend 15 minutes a week taking care of your business.
Look at the Activities and examine those categories where you did not complete 100% of the projected activities. Write down why you didn't complete these activities and then ask yourself if this is an activity that you need to re-examine?
If so, follow these steps:
Is the Activity producing appointments for you?
Does this Activity cost you money?
Are you getting closed transactions from this Activity?
Now look at the activities where you met or exceeded performance projections. Are there similarities between these activities? Do you like doing these activities more than the ones where you did not meet projections? Before determining whether to stop doing an activity that does not seem to produce anything ask yourself the following questions:
What are the associated costs?
Do those Activities have a specific intent?
Can I change the Activity to make it more productive or cost less?
Obviously, Activities that have little or no cost are beneficial and should remain in your plan. Review all activities and reward yourself for completion and a job well done.
Part 2 – Expenses
Expenses are the next section to grade. You should have reviewed your expenses after the first month just to make sure everything was being entered. Now is the time to look more closely at the those you recorded.
Are you meeting your plan for Overhead dollars spent?
Are you over or under budget for any particular Marketing campaign?
After the first quarter you should have a good understanding of the monthly costs you incur just to be in this business. Remember that changes to your business plan will affect other areas, so make sure that after you make a change that you check and see what effects it has had on your total plan and business development. Be careful with cutting Personal Marketing campaigns; make sure the desire to reduce costs does not hinder your business.
Part 3 – Transactions
Review your closed transactions. Examine the transactions you closed so far this year and remember that a Transaction has two parts; closed transactions and associated expenses.
Grading your Closed Transaction
Are you in line with your projections?
Is your business coming from the sources you anticipated?
Grading your Transaction Expenses
Are you recording the associated transaction expenses for each transaction?
Are you staying in line with the projected direct expenses in your business plan?
You might notice that no mention of revenue has been made. When reviewing your first quarter just focus on the activities, expenses and transactions. Planning and budgeting is all mathematical. If you are meeting your goals for expenses and closed transactions there are only two reasons you would not be meeting your revenue/income goal. First, the Sale Price of the homes you have closed is less than projected; not much you can do about this. The second is the commission earned or charged was short of your projections. If this is the case, examine each transaction and ask yourself why was the commission lower?
Your first quarter with your business plan should be focused on reinforcing the success-oriented habit of recording your activities; expenses and transactions. Remember the golden rule of sales management, "If you can't measure it you can't manage it."
There are many methods for tracking your business activities. Some are done manually and are often not very accurate, requiring large amounts of time and effort, while others are low cost state-of-the-art. CreateAPlan, a real estate agent specific business planning and management tool, gives you what you need, when you need it and at a price that you can afford. The CreateAPlan online system does all the calculations for you and keeps track of all the numbers and weekly performance.
For more information, visit www.createaplan.com and create or restructure your personal real estate business plan for ultimate success.