Business Plan, Goals, 2018, 2018 Goals Business Plan, Goals, 2018, 2018 Goals

What Do You Need to Do to Reach Your 2018 Business Goals

What do you want to achieve in 2018? Setting up a business plan now can help you reach those goals.

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Today, I want to offer a few tips to help you with business planning.

You may or may not have done a business plan before. What I’ve found in coaching many top producing agents and building a business myself is that there is magic in creating a business plan.

A business plan gives you clarity on what you need to do in the course of a year to reach your goals and breaking that into a monthly, weekly, and daily basis. Goals that seem big on a yearly, quarterly, or monthly level seem completely achievable when you know what you have to do every single day.

The magic of that is that you don’t have to do as much every day as you may think.

When creating your business plan, start with the end in mind. In other words, what do you want your net profit to be? What do you want to make at the end of the year after you pay income taxes, brokerage fees, and all of your other business expenses?
"When you break down yearly goals into daily steps, you’ll see how achievable those goals are."
Once we have your net income, we will build in all of those costs into your gross commission income. This is the amount that you need to make in order to pay all of those expenses and hit your net income goal.

From there, it’s important to know your key numbers. Look at your historical numbers, the numbers for your area or office, and then make your estimates.

Your key numbers include things like your average sales price, your average commission rate for buyers and sellers, and your conversion rates. There are two things you should pay attention to when it comes to conversion rates. First of all, how many of your appointments convert into a client who hires you? Depending on the agent’s skills, your conversion rate can be anywhere from 60% to 90%.

The second conversion rate is the percentage of clients that make it to the closing table. A transaction can fall through for a number of reasons: a buyer can run into financial trouble, the seller may decide to pull their home off the market, or the two parties cannot reach an agreement on an issue with the inspection or the appraisal. Whatever the case may be, take those issues into account.

Once you have your GCI, do some simple math to scale up to the volume of homes you need to sell, which then translates into the number of homes you need to sell.

Once you have your numbers figured out, determine which activities you need to do to make sure you sell, for example, 30 homes a year. What percentage of that business will come from sellers?

Here at Keller Williams, we like to emphasize that all of your business is going to come from the number of listings that you take. If you are doing your marketing plan properly, each listing you take should generate a second listing and a buyer. That’s why listings are serious leverage for real estate agents.

If you want to sell 30 homes and take 15 listings, determine how many listing agreements you need to sign. This is where your conversion rates come in. From there, figure out how many appointments you need to go on. For example, if you go on 36 listing appointments a year, that comes out just shy of one listing appointment a week.

If you lay the numbers out with the end goal in mind, then you can see each small step you need to take to reach that goal.

After you have all of this figured out, the next conversation is figuring out where you will find all those leads. I just broke down the economic model for your business plan; next time, I’ll cover how many leads you need to generate to get there.

In the meantime, if you have any questions about establishing a business plan, just give me a call or send me an email. I would be happy to help you!

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