It all begins with a plan!

One of the common mistakes new agents make is that they either fail to plan or more often - they fail to know the important pieces necessary to plan properly. So let's talk about the driving factors for a successful business plan.

1. Written - most scholars agree that in order for a plan to have a chance of coming to fruition, it must be in writing. The act of writing it down not only gives you something to hold on to and refer to in the future, psychologically it gives your plan a better sense of permanence in your heart and mind.
2. Flexible - this is an often overlooked principle to a good plan in real estate. The best plans are those that can adapt as you get deeper into the business and begin to define yourself as an agent. You also have to be able to increase or decrease activities based on your personal results.
3. Activity Driven - your plan must contain the key activities needed to reach your goals. We will go through these below.
4. Goals Oriented - you must of course have clearly defined goals that are not only measurable, but maybe a little beyond your reach:)
5. Alive - this is the piece that is the ultimate to success so let me explain. A functional business plan has to function on a regular basis. It must be a part of your daily life and drive all of your actions in your business. The simple question is, "Does this activity fit within my business plan and help me reach my goal?" or "What Would My Business Plan DO?" 'cause it helps to have one of those catchy phrases to wear on your wrist and keep you focused:)

Now that you know the key components, let's begin the process of developing your actual plan.

The first question you have to answer is, "What is your vision statement for your business?" I believe this is one of the most important questions you have to answer as you build your business as it is the central driving force that should tie everything else together.

Try this as an exercise:
Close your eyes and imagine yourself five years from now. Tell me about your business. How have you built your business? Who are your clientele? What type of properties do you work with? What kind of achievements have you accomplished? What enjoyments in your life do you have because of your success? What things do you have? What places have you visited?
Now as you open your eyes, quickly begin to write down as much detail as you can remember from your vision. The more detailed you can be, the better. Don't organize it - just write it down as it comes to you. You can make sense of it later:)

Once you have your vision, you can begin down the path of the more traditional business plans. Sample questions are below although there are hundreds of variants of these types of plans out there that you can find with as much or as little detail as you desire. The key is to go into enough detail to be useful, but not so much that you won't complete it!

• What are your Closed Unit and/or Income Goal for the year?
• What are your Top Five other Business Goals for the year?
• What are your Personal Goals for the year?
• What Activities have worked for you in the past to generate business?
• Which of these will you continue this year?
• Which will you not?
• What NEW activities would you like to try this year to generate business?
• How many days a week do you want to work?
• How many weeks a year do you want to work?
• What is your average sales price?
• What is your average commission collected on Listings?
• How many listing appointments can you commit to getting each week you work?
• How many of these appointments become signed listing agreements? %
• How many of these listings become closings? %
• How many buyer appointments can you commit to getting each week you work?
• How many of these appointments become signed buyer brokerage agreements? % 
• How many of these brokerage agreements become closings? %
• How do you feel this year will compare to your previous years of success in real estate?
• Why?
• How do you feel this year will compare to previous years for the market condition?
• Why?
• What can your office, staff and manager do to help make it your best year ever?

Once you have these types of details, you have the numbers you need to pull together the activities and results associated with them. There are many ways to approach this process, but below is one that I have seen work over and over again...

Start with your listings - 

• Multiply the # of appointments you committed to per week by the # of weeks you committed to so you can get how many appointments you will get in the year.
• Multiply this total # of listing appointments by your listing agreement percentage to get your total # of listings taken.
• Multiply this total # of listings taken by the closing percentage and that will give you your total # of listings closed.
• Multiply this by your average sales price to get total listing volume sold
• Take total listing volume sold multiplied by average commission rate and then you have your Listing side Gross Commission Income.
• Now repeat with the buyer side and add those two together for your total annual GCI.
• At this point you have to apply your local/company split and fees to see what your income would be and decide on whether this is enough or you have to go back and try again.

A simple spreadsheet can help you play a little with these numbers to get them not only to numbers that match your goals, but activity levels that you can truly commit to achieving on a consistent basis. Remember, if you say you are going to work 40 weeks a year and each week you are going to get 2 listing appointments - the weeks that you don't - don't count as weeks worked:(

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