RISMedia's Real Estate Magazine

JAN 2019

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

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68 January 2019 RISMedia's REAL ESTATE While the value and necessity of writing a business plan has been debated within the entrepreneurial community, the numbers speak for themselves: In general, business - es with a plan can grow up to 30 percent faster than those without a plan. Despite this, many agents don't operate with business plans. Some may not have or want to devote the time and energy into creating a plan at the outset. This may be especially true for experienced agents who feel as though they're working at their best and with a full pipeline. For many new and mid-level agents, the attraction to a real es - tate career may be because of its independent and entrepreneurial nature. Agents like the idea of be - ing in charge of their business and setting their own schedules, but that can often be confused for the ability to work in an unstructured environment. It's exactly because real estate lacks a traditional cor - porate structure that agents need to be even more proactive and vigi - lant in creating their own success through diligent planning, goal-set - ting and accountability. Let's break down the key ele - ments of any successful business plan: Establish a clear goal. Agents first need to set a clear goal in terms of closed deals for the year. Once that goal has been established, agents can work backwards to determine the steps that need to be taken. In setting a goal, agents should take into account the amount need - ed to cover their personal expens- es, business expenses and profit. Based on those numbers, agents can identify how many deals and at what sales price they need to close over a given period of time. Understand percentages. Agents must also understand their own contact to lead, lead to appoint - ment, appointment to contract and contract to closing ratios on a granular level. Armed with these metrics, agents can know, down to the day, how many calls they need to make, how many calls must con - vert to contacts, how many contacts must convert to leads, etc., to reach their goal. Hold yourself accountable. Ac - countability is the most important aspect of being your own boss. The value of a business plan be - comes especially clear when thought about in terms of account - ability. Because agents are able to drill down to daily micro goals that need to be achieved in order to ful - fill macro business goals, business plans can provide daily, weekly and monthly activity sheets to hold peo - ple accountable. Accountability can also help troubleshoot what's going wrong if an agent isn't progressing as they would like to. Having goals and percentages written down makes it clear when something isn't work - ing. Agents can then sit down with their brokers and discuss tactics for turning things around. Conclusion Brokerages should offer their agents business planning resourc - es, and agents must take advan- tage of these tools. When done correctly, it isn't just an empty ex - ercise consuming time and effort. Without a business plan, agents risk leaving money on the table and, ultimately, not reaching their top earning potential. Agents shouldn't shy away from tapping into tools and resources their brokerages and network have to offer. Effective business plan - ning and follow-through can make the difference between the 87 per - cent of agents who don't make it past five years and agents who go on to have thriving careers. RE Adam Lerman is senior vice presi- dent of Coaching & Accountability at Engel & Völkers Americas. For more information, visit www.evusa.com. D ata from the National Association of REALTORS® (NAR) estimates that 87 percent of all new agents fail after five years. One of the keys to being among the 13 percent that succeed in real estate? Business planning. The Value of Agent Business Planning by Adam Lerman

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