Business Planning
Happy new Year Luxury Agents. As we are just over the threshold of 2012, it’s time to talk about business planning. Many don’t look forward to this task, but let me see if I can make it a little less painful. Because I’m a licensed boat Captain, (up to 99 tons) and live on Cape Cod near the water, I like to compare business planning to a boat captain preparing for a voyage.
Before leaving the dock, the captain has a goal or destination and marks it on the map (or chart in marine parlance.) Just as goals always have a deadline, the captain has a time frame for reaching his or her destination and makes a note of it in the log book.
The next step is for the captain to set the course that will be traveled to reach the destination. Based upon past experience, and other predictions, the captain will take into account, winds, weather, currents and tides and estimate their effect on the course.
It works the same with business planning. We set a goal. We then lay out a plan for how we’re going to reach that goal and we understand that during the course of the year things can happen. The winds and currents can change so adjustments need to be made as we progress.
While the captain sets his or her destination, course and estimated time of arrival on a nautical chart, I prefer Excel for business planning. In fact, I created a pretty simple business planning spreadsheet that I’d like to share with you. Let me first explain how it works then I’ll tell you how you can get one at the end of this video.
The next part of my plan is a situational analysis based on your past performance. You need to gather a certain amount of data based on your last year’s business. If you’re new to the business base the situational analysis upon your best guest estimates of what your numbers ratios are going to be. These numbers, like your income goals, are entered in the white boxes of my business plan.
The spreadsheet automatically calcualtes your batting averages:
- How many leads let to how many appointments with buyers to getting actual buyer contracts signed?
- How many appointments did you have with sellers that resulted in listing contracts signed?
Next is the production target tab. This takes your goals from the front page and looks at your financial arrangements with your company and uses your ratio of leads to appointments to calculate the number of buyers you need and the number of sellers you need to reach your goal.
Next is the prospecting target tab. Here you decide where your business will come from. Do you want it to come from your sphere-of-influence; past clients; open houses and referrals for example? Target your goals for each category of business in the white entry boxes and then you can match it on the last page against what actually happens.
On the final tab, you find already calculated a monthly target of exactly how many:
- Appointments you need with buyers every single month.
- How many appointments you need with sellers every single month.
- How many listings you need to take each month.
- And how many buyer contracts you need to sign each month.
As the year unfolds, you enter your actual numbers which allows you to track ratios or “batting average”. It may sound a little bit complicated, but I’ve made this so simple and you can track where you are monthly as to where you are compared to where you want to be in terms of your goal. Just dive in and try out the spreadsheet.
So you can get one by sending me an email jack@jackcotton.com. In the subject line enter request business plan. Try it out and tell me what needs changing. Tell me what you like about it and tell me what you don’t like about it and I’ll tweak it.
Don’t forget you can ask me your other real estate questions and if you bought “Selling Luxury Homes”, don’t forget to schedule your 20-minute one-on-one phone consultation with me by filling out the form and sending me a fax.
Until next time make it a great week.
1 Comment
Betty Kerr - Keller Williams
01/12/2016Thank you for your videos. I sell 26-30 home per year, but….my average commission is $1,200.
I have made it my goals to sell high priced home to start earning money so that I have have a life style that I deserve.
I am listing my first 1M home Feb 01, 2016. I am learning many things to do in this price range.
Thank you for assisting me in my new goals.
Betty Kerr
714 485 3411