After helping real estate professionals create breakthrough career success for more than 27 years, one thing is certain: There’s no one path to success for everyone.
However, there are smart strategies that can help agents get to their Next Level™ faster than others. Recently, we’ve reimagined real estate business planning. We start with an EZ Business Plan that allows them to crunch numbers so they can assess the activities they need to hit their financial goals. Then we share a three-tiered plan that can help agents better navigate three important areas of building wealth: now business, future business and financial freedom.
Agents often fall into one of three categories:
- Survival Level, or those struggling financially, living month-to-month and worried about where their next commission is coming from. These folks need a quick fix and coaching to create a cash infusion by putting “now business” in place within 30-60 days.
- Maintenance Level, or folks who steadily get their bills covered throughout the year. They are making enough to get by, but not really able to save or create financial growth.
- Next Level™: These are the agents that have built strong business foundations, have systems in place and constant cash flow coming in. They are now in the business of preparing for eventual retirement and financial freedom.
First, know your numbers logically. I had a coaching conversation with a student who felt as if he were doing worse this year over last. I had him write everything down. How many listings? Sales? Dollar volume? Commissions? After analyzing, he realized he had made more in the current year, but spent much more, revealing the disparity.
- Business Bills – What are you spending each year on business survival? What is your break-even? Dues, advertising, stationery, E&O insurance, office fees…these are fixed bills.
- Personal Survival Bills – House, utilities, car, insurance, etc.
- Add the two.
- Add taxes. This becomes your overall break-even.
- Add how much you want to put toward retirement and what you’ll need to live debt-free (pay off credit, put in savings, investments). This will take you from survival to Next LevelTM.
Consider the three areas of business planning necessary for long-term success to determine where you need to start:
If you need money in next 30-60 days, wake up every morning with one focus: get a listing. How? The quickest way to generate listing appointments now is to call FSBOs and expireds:
- Get a good file system that will help you generate and organize these leads.
- Schedule certain days for calls and commit to those hours.
- Have a strong listing appointment, which gives you the confidence to prospect.
- Use a visual chart to help stay motivated and focused
- Have external accountability (another agent, manager, integrity partner, etc.).
Now that you’ve got inventory and cash flow, it’s time to focus on building your business to your Next LevelTM. That requires planting seeds of self-promotion for niche markets or geographic farms. Here are some things to consider:
- It takes 6-9 months before it starts paying for itself.
- Create a plan for a concentrated neighborhood approach that includes door-knocking, community events, working those Facebook closed groups and mailings.
- Have funding for at least six months of marketing before you get started.
- Consistency is key—statistically, it takes at least five touches to get a response.
- Consider co-branding with a vendor to offset costs such as an attorney, moving company, etc.
There is no better feeling than being debt-free. The only debt that is good debt is mortgages (one per house!) and car loans or leases—all single-digit loans. Any cost of money that is in the double-digits is hurting, not helping—meaning over 10 percent interest needs to go.
- Map out a plan to pay off any debt that has double-digit interest first.
- Savings has to be habitual. Every month a set amount needs to go towards your future.
- Here’s the formula I taught my son: After bills, 50 percent of your money goes towards spending, 20 percent to savings, 20 percent to investing and 10 percent to God. If you have credit card debt, that formula would be 25 percent to spending, 25 percent to debt, 20 percent to savings, 20 percent to investing and 10 percent to God.
Watch for more training on this topic as we roll out the first quarter of 2019. We’re here to help.
Darryl Davis, CSP, an author, coach and speaker, has spoken to, trained and coached more than 100,000 real estate professionals around the globe. He is a best-selling author for McGraw-Hill Publishing, and his book, “How to Become a Power Agent in Real Estate,” tops Amazon’s charts for most sold book to real estate agents. He is the founder of the Next Level™ real estate training system The Power Program®, which has proven to help agents double their production over their previous year. Davis has earned the Certified Speaking Professional (CSP) designation, held by less than 2 percent of all speakers worldwide. For more information, please visit www.ThePowerProgram.com.