What’s the difference between owning a real estate business and having a job in real estate?
In my experience as director of Coaching for Workman Success Systems, the difference lies between actually knowing your numbers (i.e., having clarity) and simply hoping you do the same or more than last year.
I talk to hundreds of agents a year, and I’m still shocked at how many of them—including very big producers—have no idea what their sales, commission or profit numbers are. Owning a business means maintaining a constant focus on improving your key performance numbers.
You start with your goal (not your hope) of year-end net profit. Then, by having clarity on your numbers, you calculate your cost of operations/sales, add that to your net profit goal and divide by your average transaction/commission check to get the number of sides needed to reach your goal. Then, multiply that number by your conversion rate (appointments to contracts/agreements). A 60 percent-70 percent conversion rate is usually good if you don’t just work with friends or family.
Here’s another way to look at it. If I need 70 sides closed to reach my goal, and I have a 60 percent conversion rate, I’ll multiply 70 by 1.4 and find that I need 98 appointments to reach my goal. Take it further to determine how many contacts with buyers or sellers you need to get an appointment. Lastly, divide that number by the number of days you work to get the number of daily contacts needed to reach your goals.
This seems pretty straightforward, but the vast majority of agents just wait and hope the phone will ring or their inbox will bing and they’ll get a chance at some business.
Don’t wait for business to find you. Calculate your numbers, clarify your needs and start running the business you want today.
Nearly three decades of real estate experience—including 15 years of coaching with Verl Workman—has made Jim Knowlton one of the top agents in the country and one of the most popular coaches on the Workman Success Systems’ team. In addition to serving as director of Coaching for Workman Success Systems, Knowlton also owned and managed several real estate franchises, earned numerous awards for his performance and continues to lead a Keller Williams Mega Agent team in New Hampshire today. Contact him at Jim@WorkmanSuccessSystems.com. For more information, please visit www.WorkmanSuccess.com.