Have you ever noticed that not everything you do produces the desired results or ends up being as beneficial as you thought? Any idea why? Probably not. Without a plan you are probably missing an objective, a method of measurement and are reacting rather than acting.
A business plan serves two purposes. It reflects on what has happened in the past and makes the corrections to ensure you reach your goals in the future.
The first step in creating your business plan for 2015 is to review 2014.
- How many real estate transactions did you have?
- How many buyers and how many sellers?
- Where did each one hear about you?
- What were your gross commissions and average commission per sale?
- How much did you spend on marketing in total and then broken down by type of marketing?
- What was the mix of condos, townhouses and houses?
- How many prospects did you work with to achieve your 2014 results?
- What is your prospect-to-sale ratio?
Review your database of prospects, clients and others in your sphere of influence.
- Is it up to date?
- Did you meet people in the past month that you should add to it?
- Do you have them ranked to identify the top referral sources?
- Do you have a plan to contact your prospects and referral sources in 2015?
Then ask yourself the following questions:
- If you didn’t reach your production goal last year, what prevented you from doing so?
- What specific activity (or activities) had the most positive impact on your 2014 production?
- If you could select only one lead-generation activity from 2014 to repeat in 2015, what would it be?
Now you are ready to set your financial goals for 2015.
- My income goal for next year is:
- My average commission per transaction last year was:
- Number of transactions needed to reach your 2015 income goal (divide #2 by #1 above):
- Percentage of closed sales that were listings last year:
- Number of listings needed in 2015 to reach your goal (apply percentage in #4 to #3):
- Number of buyer closings needed in 2015 to reach your goal (subtract listings from total transactions needed):
Taking Steps to Achieve Your 2015 Goals
To reach your financial goals you need clients and your clients come from repeat business, referrals from clients and your sphere and people you meet. You need strategies to ensure repeat business and referrals, but you also need new clients and that is where prospecting comes in.
Prospecting is defined as you making contact with people, as opposed to people making contact with you. You will always get “bluebirds” from out of nowhere, but to guarantee your results in 2015 you need to plan the activities that you will use to make contact with people.
Based on the number of buyers, sellers and inquiries you fielded in 2014, determine how many prospects you will need in 2015 to meet your targets. Prospecting for new clients is like filling a funnel. You want it as full as possible to ensure you will meet your 2015 goals.
This part of the plan is where you map out what prospecting activities you will implement, when and how much they will cost. This is important as your time is your most valuable asset. With everything else you have to do you need to budget activities to fit the time available. There are two areas of focus in prospecting and you must devote time to both those areas:
- Lead generation
To generate leads you need to identify the sources of leads and the markets you are going to focus on. Lead generation can focus on many areas:
- Open houses
- Direct mail
- Door knocking
- Expired listings
- Past clients
- Buyer/seller seminars
- Current trades and suppliers you work with
For 2015 you should identify target markets:
- Specific neighbourhoods
- Renters to first-time homebuyers
- Other first-time home buyers
- Relocation companies
- Out of area agent referrals
Communication with prospects is the key to success. The six principal communication channels used by real estate agents are email, mail, telephone, print, face-to-face meetings and social media. The trick is to determine how you will use these channels to make best use of your time and be most effective.
The best channels for your sphere of influence and past clients are mail, email and telephone. You can send personal emails (such as holiday and birthday greetings) and you can also send newsletters with information of value. Definitely create a plan to contact your most important referral sources by phone or email on a regular basis. When you do talk to them, have an interesting real estate tidbit to share or something that might interest them.
The best channels for buyer and seller prospects are print, face-to-face meetings and social media, in that order. You will meet them door-knocking, at events, at open houses and by sharing on social media.
Have the Right Tools for Prospecting
Before you start door knocking, cold calling, emailing, direct mailing or any type of prospecting, make sure you have the right tools. For door knocking I recommend having a physical item of value, like a memo pad or door hanger with a link to a website or page where you offer a free home evaluation (more on "swag" here).
For email, direct mail, open houses and even when phoning you need information you can share that people will find useful. Write a White Paper on the 2015 real estate market in your area, create graphs of 2014 real estate activity in your prospect’s area, write out local market updates or provide sample home valuations in the area.
Once you have the item of value offer it to your prospects via mail, telephone, email, social media or any other channel you are using. If the prospect finds the information valuable they will contact you for more information and you have a prospect.