As we look forward at what it’ll take to thrive in 2025, Inman is celebrating the mighty Indie Broker. We’ll spend all of December delving into how independent brokers are acclimating in a post-commission settlement landscape, as well as what new tools and platforms have emerged to give indies the competitive advantage.
Besides, perhaps, a root canal, is there anything that we avoid more than business planning? In corporate terms, prioritizing the stuff that’s hard and doing the stuff we don’t want to do first is also referred to as “eating the frog.”
The phrase “eat the frog” is variously attributed to Nicolas Chamfort, a French writer, and Mark Twain, who had a couple of different versions of it:
- “If it’s your job to eat a frog, it’s best to do it first thing in the morning.”
- “Eat a live frog first thing in the morning, and nothing worse will happen to you the rest of the day.”
It then turned into a productivity book by Brian Tracy with a focus on organization, productivity and proactively overcoming challenges.
Whatever the origins of the phrase, most successful entrepreneurs eat their frogs early and start moving in a positive direction sooner than businesspeople who save the most difficult task for last and drag their feet along the way.
Business planning, however, doesn’t have to be such a chore or something to be dreaded if you begin your planning with all the information you need within easy reach. As real estate professionals, we tend to get wrapped up in the details of our transactions, prioritize our “to-do” lists and neglect adequately tracking our business as the year moves on.
It’s not enough to count the number of closings and sales volume and to plan to do “more than that” the next year to grow your business. You have to start by knowing where you’ve been.
5 questions to ask as you create your business plan
To make your business plan more meaningful, you’ll need the answers to the following questions:
1. What were the sources of your leads, how many did you receive from each source, and how many closings resulted from each source? In other words, which lead sources were worth your time and effort?
2. What did you spend on fees, dues, signs, advertising, mailers, events, technology, services, supplies, education, automobiles, etc.? These items directly relate to the cost of keeping your business afloat.
3. On a personal level, what were your expenses on things like your mortgage, utilities, food, entertainment, child care, health care, debt payments, education and charitable contributions? Stated another way: How much money do you need to maintain your current lifestyle?
4. What do you actually want to do with your life in the next 12 months (besides sell a lot of real estate)? Do you want to take an extended or extravagant vacation? Pay off the car? Purchase an investment property of your own? How much do those life goals cost?
5. Then, you need to know:
- Your average sales price
- How many buy-side closings you’ve had in the past 12 months
- How many sell-side closings you’ve had in the past 12 months
- Your average earnings per transaction
- How many total appointments you had and how many times those appointments resulted in closed business
Evaluate your KPIs
Now, it’s time to take that information and plan for the upcoming 12 months. Once you figure out how much you need and want to make, divide that number by your average earnings per transaction. That will give you the total number of sales you have to have.
Look at your success rate with each of your lead sources, and determine which ones are deserving of your attention and which ones may cost you more than you are earning from them. It’s not always the best strategy to just continually add lead sources to your plate. Instead, eliminate those that aren’t worth the investment of time or money, and free yourself up to concentrate on the sources that are converting at a higher rate.
What does your buy-side/sell-side ratio look like? If you have a buyer, you will likely sell them one house. Then, they probably won’t need you for another 10 years. I’ve always figured that if I got one listing, there’s nearly a 100 percent chance that I’ll sell that house, but also that I will pick up two or three ready, willing and able buyers who were generated by the marketing for my listing.
That translates into one listing equals three sales. Focus on the type of business that will most likely generate the number of closings you want.
Calculate your success rate
Finally, if you know how many times you booked an appointment and how many of those appointments resulted in closings, you’ll know your success rate of encouraging people to do business with you.
Do half of those you meet with say “yes” to doing business with you? If so, you need to set twice as many appointments to have the number of clients you need to work with to reach your closing goal.
If the frog is too large for you to eat in 2025 because you haven’t tracked your business in these ways, it’s possible that the first thing you need to do is to develop a better system for year-long tracking of your activities, your successes, your failures and your finances.
That’s a perfectly fine place to start with your business planning. Then, next year, the frog will be smaller and easier to swallow.
Claudia Stallings is the COO of Wallace Real Estate in East Tennessee. Connect with her on Facebook or Instagram.
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