Salescoach - With 25 years in the real estate industry, provides a range of specialist services to help you make more sales.
PLANNING TO MAKE THE YEAR AHEAD MORE SUCCESSFUL AND PROFITABLE
year another chance to grow your business or career.
Much is said and written about the need to prepare a Business Plan
so you can chart the progress and growth of your business.
We are all aware of how some licensees and Sales People have continued
to grow their market share, profile and profitability whilst others
have struggled to survive, and indeed some have exited the industry.
No doubt there are some who clearly possess the energy and skills,
which we could label as natural. A closer examination
of their performance usually tells a different story though. They
always nearly have a defined modus operandi, a
Way of doing business that simply outruns the average
They are people who have planned for success watched, learnt,
listened to the best and emulated them.
Perhaps its a good time to take a look at the sort of planning
these people do: to see if there is something in their strategies,
which we could adopt.
So if things need to improve it could be time to make some serious
changes to your business. I would like to discuss how you might assess
the changes needed by outlining a simple Business Planning strategy
I see being used by some very successful businesses.
Unless you are growing and prospering, simply doing more of
the same is pretty much a turn up and hope strategy.
If you do what youve always done, youll get what
youve always got Too often people leave off the final
phrase in ever diminishing amounts.
Where do you start?
1. The best place to start is with you, and not the Business
One would hope that you have a clear vision of the life you want this
business to fund.
I believe that people choose a business or career to fund the
life they want.
Firstly you need to be really clear on your personal goals. I continually
surprised that the majority of people I meet in Business do not have
their personal goals written down. Therefore they have no written
strategies of how they are going to achieve them.
It could be time now to look out 5 years and write down the type of
life you want by that time.
You could set targets for:
Personal Health and Fitness
Business Awards and Recognition
Community or Industry Service
All this will need Funding, and thats the role of the business!
Without assessing these goals you run the risk of more of the same.
If you arent making the progress you want, imagine working just
as hard again this year for the same results as last. For many people
that is not a palatable picture. The key is in understanding what
your goals are, really believing they are right you, and then focusing
on what needs to be done to achieve them.
I call this the fuel to fill your tank each day with the energy, drive,
focus and enthusiasm to build a great business and to make the changes
that are required. So have you a Business Plan that specifies the
production targets required and the key strategies that will take
you to that success picture.
2. Define the Business that will deliver the Income required
Once you know the level of income you will require its time
to create a picture of the Business that will deliver.
You will know your market place and your competitors. Couple this
information with the required income you need and start to build a
picture of what your business will need to be like.
How big, how many people, what profile, reputation and market share?
What will it are like to work there?
Start with a simple calculation.
Profit Required EG $300 000 Annual Running Costs $300 000 Office Gross $600 000 Paid to Sales People $600 000 Gross Net of Franchise Fees $1 200 000 Franchise fees (If you pay any) $90 000 Total Fee Income $1 290 000
Average Fee collected $6000
Sales required per annum 215
Per Month 18
Sales In Market Area PA 1000 Market Share 21.5%
When you have worked this simple Calculation take a look at the feasibility.
The above example looks a pretty simple case of I can do this
in my current Market. One must assess whether the current business
location will deliver enough revenue to build the profits to the right
3 Assess the Competition
No matter what you intend there is an impact made by your competitors.
List them all and assess their weaknesses and strengths, look at any
competitive advantages they might have and estimate their market share.
Now ask yourself Can I build my business in this environment?
4 Examine your Current Reality
Now conduct a SWOT analysis on your business.
Before doing this you will want to have access to some pretty accurate
information about production and efficiency in your business.
Look for the following
Your Trading history and any trends
Average Monthly Costs
Marketing Costs and any trends in Vendor Contributions
Productivity and Average Incomes across your team
Assess these on a per person basis, and then calculate accurately
the Clearance Rate. That is work out the % of listings
taken that are actually sold.
Have you really got a handle on current reality for your business
and do you understand why that is so? I suggest you have a look at
your real levels of productivity in your current business.
How many controlled listings do you list per person per month?
How many auctions do you list per person per month?
How many of them sell?
Whats it costing you to hold this stock? How much per listing
do you spend?
How much per sale do you spend?
What are your Clearance rates of these listings into sales?
5 Establish Strategies to Make the Difference
So now ask: Why is there a gap between where you want to be and current reality?
What are the specific strategies that will make the biggest difference?
Now spend time looking at the difference between the current position
and where you want to be. Having collected all the past performance
history you can start to define the Key Strategies that will take
your business where it needs to go.
The first places to look are
How many Listings are you getting per person per month?
How many of them sell?
In most of the Real Estate Businesses we work with the key to improved
performance is tied up in these 2 factors.
Small increases in performance here can have a huge impact on profitability.
Lets look at a typical set of figures (Pretty average really)
Number of Sales People - Current 10 Future 12
Exclusives Per month - Current 2 Future 2.5 Auctions Per month - Current 0 Future .5 Total Exclusives PA - Current 240 Future 360 Total Auctions PA - Current 0 Future 72
Exclusive Clearance - Current 50% Future 60% Auction Clearance - Current 0 Future 80%
Total Sales PA - Current 120 Future 273
Income on Fee of $8000 - Current 960 000 Future
1 638 000
Average S/C Income - Current 48 000 Future 68 250 @50% Payout
The above improvement would have several strategies required. They
could include but not be limited to:
1 Recruitment Strategy
Have I enough/too many people?
Have I the right people?
What new skills do they need?
Hows my recruitment plan? Where will I find the new people?
What Induction and training do they need?
How is my training programme?
2 Skills training to lift the Clearance Rate.
Based on skills from Qualifying Vendors through to advertising quality,
Listings management, pricing, Assisting Vendors understand the market,
Open Homes, Sales and Negotiating Skills.
3 Auction Strategy
Do I need to introduce this into my business and if yes who is going
to run it?
4 Marketing Strategy to Create more Listing Opportunities
This could include use of company/Sales persons Databases, use of
Vendor Marketing Contributions, Geographic and Strategic Marketing,
Sign Boards etc.
5 Coaching Strategy to Keep sales team members focused on Key Tasks
How do I learn the skills to be a great Coach of my people? How do
I introduce Accountability Programmes to ensure my sales team is performing
to new levels?
6 Financial Strategy to Manage Costs and Measure Income and Performance
7 Operations Strategy
Do we have the right technology and support to achieve new levels
Are we in the right premises?
Do we need more or less branches?
The physical environment?
8 An Awards and recognition Strategy
Lets celebrate our successes and give credit where its
Monthly, Quarterly and Annual Awards.
Of course theres more to it than this. Like how do you get buy
in from your existing team to setting new standards and creating accountability
so that this isnt just a good idea but ultimately becomes the
way we do it around here?
In many Businesses we can generally note 10 to 15 strategies that
are required to lift the business to new levels. In most cases we
recommend that you select the 4 or 5 that will have the biggest impact
and then create a detailed action plan for each of those.
Once we have a set of Action Plans the penultimate step is to list
down all the actions required from all those key strategies in chronological
order. This is what goes in YOUR DIARY OR ON YOUR WALL SO ITS
PLAIN TO SEE WHERE YOUR FOCUS MUST BE
Whilst this is only a brief outline of the Key Ingredients of setting
out to do a Business Plan it does indicate the steps in the process.
The homework you do beforehand is as crucial as the picture you paint
of the ideal business.
They key to making the changes rest with you the business owner.
The new financial year is not far off and now is a great opportunity
to take the time to Assess both where you are and where you want to
Plans are best kept simple in logical steps that can be implemented
in some sort of order. Experience so far has shown that the key factors
revolve around the following:
How many controlled listings per month is each sales person bringing
What is the clearance rate of those listings?
Focus on these 2 factors and you will find all the other issues:
The need to recruit, train, coach and do great marketing. The need
to provide what customers want, to use technology for an edge, to
provide great systems and to be the best manager and leader you can
As I said earlier there are operators who have already embarked on
strategic plans to lift their game, to grow their business by having
all their team telling the same story, performing at higher skills
levels and focusing on those tasks which really are dollar productive.
Writing a Business Plan is not hard. Its just the challenges
of facing up to some of the Strategies that will need to be introduced
and then being prepared to benchmark your performance alongside the
targets. There are plenty of examples of business owners and managers
who in the last year or so have taken the challenge and are on the
way to building businesses which generate growing and sustainable
profits and thence increased value. These owners are building their
businesses so they can fund the life they want.
In any business environment there are people who prosper perhaps
this year it could be your turn.