2020 Business Planning
Welcome and good morning to Mike Ferry TV. It is the week of November 25. We have 5 weeks left in the decade that we’ve been playing with for a long time.
This has been an interesting decade. If you’ve been involved in Real Estate since January of 2010, we’ve experienced the worst and the best … virtually … in this decade. Been a little cool the last 18 months in the Real Estate industry. That’s normal … we have a little flattening out period … but if those of you that have been involved only from 2013 forward, it’s probably not been a good experience because all you’ve experienced is an upward trending market.
So, the people that got involved in late 2007 … 2008 … 2009 … and were involved in 2010 have seen the worst and the best. We’re going to help you become the best of the best in 2020 through writing a simple, straightforward, very important business plan for yourself.
Now, I will say to you … we can put your entire business plan on three sheets of paper. One … two … three … three sheets of paper … your entire business plan. We started doing this business planning back … 1983 … 1984 … may have been 1982 … and it’s interesting that most of our competitors took that little 3-page plan and have turned it into 5 pages … 10 … one of our competitors has a 45-page plan, which you’re never going to fill out … you’re never going to read it … you’ll never complete it. So, just stick with the simplicity of this. I’m not smart enough … according to my competition … to do anything complicated like give you a 45-page plan. But I’ll tell you, our 3-page plan … if you complete it … and I want you to work on it now.
Our clients … our Coaching clients … have been working on this since September. We ask our Coaching clients around mid-September to start completing their plan … get it into the hands of their Coach by no later of the middle of October … that way they have a 15-month business plan that they’re operating from … because, see, what we don’t want in Real Estate is a big letdown the last part of November … today … and December … in your terms of your emotional involvement … your mental involvement … your physical involvement in Real Estate.
You’ve got to work 11 to 11.5 months a year to succeed at anything. You’re always going to have 3 or 4 weeks off … maybe it’s 11 months. We got to keep you active during the month of December, so January … February … you have the cashflow you want to make sure that your life is operating correctly. Plus, if you’re really strong in your approach the last week of November … and the next three weeks in December … if you celebrate Christmas, it’s going to be a better Christmas for you and your family.
So, let’s look at the business plan. Six parts to the plan.
Part A … a recap of what you did this year. Good or bad … right or wrong … high or low … productive … nonproductive … an honest, in writing recap of what you’ve done.
How many transactions did you close?
How much gross revenue did you have?
If you kept track of your expenses, how much did you have in expenses?
What was your pretax net profit?
How many listings did you take?
How many Listing Presentations did you go on?
What was the gap or difference?
How many of your listings were Expired or cancelled?
How many Buyer-controlled sales did you have?
How many hours did you invest in prospecting?
How many contacts did you make?
Any time you can look in the rearview mirror and see what you’ve done, you’re giving yourself a good guide for what you need to improve on or get better at for the next year.
So, the second part of our plan is the goals you’ve set for 2020.
What kind of money do you want to earn? If you made $80,000, do you want to make $120,000? If you made $230,000 … are you trying to get to $300,000? What is the goal for income?
What is the average commission check?
How many transactions do you have to close?
How many of those will be listings sold versus Buyer-controlled sales?
Where are you going to generate them from? How many hours are you going to spend in prospecting?
How many contacts are you going to make?
What is your closing ratio? What is the target you have?
What are the goals that you have?
That’s all part two is … and you could put all that on one page.
Part three of the plan is, of course, the schedule.
What kind of schedule do you have? Do you have a good schedule that is laid out for 5 days a week?
What are the 5 days you’ll work? Are you working Tuesday, Wednesday, Thursday, Friday, Saturday? Are you working Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday? Seven days a week, 24 hours a day? Nonsense. You need time to recoup … recover … you need time for yourself … time for your family.
So, we recommend a 5-day workweek … max 5.5 …
What are you going to do for that day? Can you create a schedule that starts at the time you appear to when you want to quit at the end of the day? And what are the activities that go into that?
If you had a perfect schedule, what would it look like? What would it be? What does a perfect day in the life of you … as an agent?
The fourth part of our plan is the numbers to support that schedule … the numbers to support that schedule.
Okay … numbers … hours of prospecting … contacts … Listing Presentations … closing ratio … what are the numbers?
How much money are you going to spend on your social media advertising? On your marketing? On any postcard mailings you’re doing? Whatever you’re doing … what are the numbers involved … so you can look at those and say … do they make sense? Do these numbers support that goal?
“Mike, I want to do 48 deals this year … but I really don’t want to have to talk to people.” Red flag goes up … how are you going to support the 48 transactions if you don’t talk to people? Numbers …
Part five … and of course this is now the third page … what problems or concerns do you have in achieving the goal?
Maybe you say to yourself … I’m not good at delegation. Maybe I need to hire a part-time assistant. Maybe I should use the company’s transaction coordinator. Maybe I should get a virtual assistant to operate with.
What are the problems you’re dealing with?
Maybe I’m not good enough at customer service. Maybe I need to spend a little more time talking to my Sellers once I list their property. Write down the three or four problems you face and the solutions to back them up so you can then proceed and have a better year.
And then of course the last part of your business plan … the third page, part two … where did the business come from in 2019? What were the sources?
Were they your database? Were they your Past Clients? Did you hold some open houses? Did you have some call … “come list me”? Did you do a postcard mailing … got a high response? Are you running ads on Facebook and you got two listings from that? Whatever source … So how do I find out the sources? I’m going to ask you to take all the listings you took … all the Buyer sales that you had … and next to it think about what the source was and write the source down … because you want to see if it’s duplicatable.
Can you do it again? Can you get that same response … plus?
For example, an agent will say, “I love knocking on doors,” which … you know … is a method of prospecting … it’s 1 of 60 methods of prospecting we teach. Alright, so you like doing it … great … how many doors did you knock on and how many listings did you take?
“Well, I knocked on about 50 doors a week and I only got 2 listings.” Well, then maybe that isn’t the best source.
So, what is the best source?
I believe that the business plan is nothing more than a little look at your history … obviously the goals you’re setting … the schedule to support it … the numbers which make it happen … problems and concerns with solutions … and then making sure you duplicate the sources from last year. Business planning is important … and a business plan … just so you know … is a working document that you’re going to have a pen … look at it every week … review it … get excited … get depressed because sometimes you don’t follow your plan too well. But if you follow your plan … it works. Planning is what makes a great agent a great agent.
I don’t know if it was Warren Buffet or Steve Jobs … I saw a quote one day and it said, “An idiot without a plan is better than a person with a plan that never follows it.” I thought that was an interesting quote. We’re not idiots, you and I … we’re smart people.
Let’s write the plan and follow it. We’ll take the best of the best … put them together … and that’s you. I look forward to talking to you next week. Review this time and again … have some fun with your business plan. Thank you.
Mike Ferry is the global leader in real estate coaching and training. Watch Mike each week as he discusses a variety of topics to help real estate agents and brokers. Grow your real estate business by improving your mindset, developing your skills and creating a plan of action to increase your production!
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