When it comes to real estate, business planning is one of those activities that agents either despise or don’t know where to begin. We’re told it’s important, but we’re not exactly sure why.
It’s been my experience that agents who set goals and execute those goals increase their business by 25%-50%! That’s no joke and nothing to take lightly.
The purpose of a business plan is to get to where you want to go. It is your road map. Think about it this way, let’s say you want to go to Disney World, you wouldn’t get into your car and drive aimlessly hoping to come upon it. The same is true for your business. Success happens when you’ve laid out your plan.
There are seven components of a business plan:
Know your audience.
A good friend told me, “Your niche is defined by who you are and what you do.” Don’t overthink it. Look around you, and you’ll see who you should be serving. Also, don’t try to be all things to all people. You’ll attract the wrong clients, you’ll get frustrated and you’ll burn out fast.
Complete a SWOT analysis.
Your SWOT (strengths, weaknesses, opportunities, and threats) analysis helps you to understand where you stand in the market against your competition and where and how to invest your time, money and resources most effectively. Your strengths are the things you do well. Your weaknesses are the things you procrastinate. Think about how and to who you can delegate these things. Your opportunities are openings for positive change.
Changes in the market, lifestyle changes and demographics can all provide opportunities that can significantly impact your success. Threats are anything that is out of your control and has a negative effect. Inflation, interest rates, a pandemic or a new competitor could all be considered threats. Often threats can be flipped to become opportunities. A changing market, for example, one where interest rates are increasing, is an opportunity for willing buyers to have less competition and more negotiating power.
Do a Stop/Start/Continue exercise.
This is your opportunity to reflect on what worked and what didn’t work last year. This exercise helps to identify the strategies that save you time and increase your overall return on investment. Continue activities that you love and attract the right clients to your business. Stop activities that had a negative return on investment. Start activities that could bring you better results. Look at your list of opportunities for ideas.
Know your numbers.
Numbers tell the story about your business. Expenses, source of business, all closed transactions, all closed volume, gross commission income, average sale price and average commission/transaction, average sale price and average commission/transaction all tell a story about who you serve and where your strengths are. Knowing your numbers allows you to identify areas to focus your efforts in the coming year.
Set realistic goals.
I’m a big believer that establishing a personal goal is the best way to ensure you maintain balance in your business and your life. Start by selecting your income goal and then choose your personal goal.
Define business-building activities.
This is where the fun comes in. Write down all the things you can do to reach your goals. I like to put activities into three buckets; revenue-generating, marketing, and personal growth.
Finally, be accountable. Our business can be lonely, making it easy to get distracted. Find an accountability partner, or as a friend suggested, your own Board of Directors. These are people who aren’t afraid to challenge you and push you. Time-blocking and creating routines are also great ways to stay accountable.
Completing your business plan will give you a sense of accomplishment. It’s the first milestone toward success, motivating you to take the next step or complete the next task. Your mindset will be critical as you move through the year. There will be road bumps and possibly even detours. When you come upon those, take deep breaths, make adjustments and continue to move forward. When you do this, you will succeed and be able to look back and feel proud of your accomplishment.
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