Determined businessman image via Shutterstock.
Hitting your production goals in 2014 requires more than persistence and self-discipline. If you’re ready to do what it takes to hit your goals, you need a workable strategy to keep you on track throughout the year.
Did you hit your production goals for 2013? If not, persistence and self-discipline alone are not enough. You also need a written business plan that establishes clear-cut priorities based upon profits, not just revenue. To make your business more profitable in 2014, follow these guidelines.
1. Identify your most profitable activities
The first step is to make profitability your No. 1 priority. Begin by going through your production from 2013. Identify the three lead generation activities that resulted in the greatest amount of revenue from your business, as well as the expenses associated with that income.
For example, assume that you generated the following amount of revenue and expenses for each of the following activities:
- Referrals: $43,000, with a cost of $12,000
- Website leads: $23,000, with a cost of $6,000
- Expired listings: $21,000, with a cost of $4,200
- Postcard mailing program to farm: $8,000, with a cost of $6,000
- Newspaper ads: $6,000, with a cost of $7,500
Which of these activities provided the greatest return on your marketing dollar? There are two ways to calculate this. The first strategy is to look at how much net profit that you made from each category. You can do this by subtracting the cost from the income generated.
- Referrals: $43,000 minus $12,000 costs = $31,000 net profit
- Website leads: $23,000 minus $6,000 = $17,000 net profit
- Expired listings: $21,000 minus $4,000 – $17,000 net profit
- Postcard mailing program to farm: $8,000 minus $6,000 = $2,000 net profit
- Newspaper ads: $6,000 minus $7,500 = $1,500 LOSS
Examining the numbers this way shows that the three most profitable areas for the business above were referrals, website leads, and expired listings. Newspaper ads were costing more money than they were generating.
A different way to calculate this is to examine how much revenue each activity generated per dollar spent. To do this, you would take the total revenue and divide it by the total cost:
- Referrals: $43,000/$12,000 = $3.58 net profit per dollar spent
- Website leads: $23,000/$6,000 = $3.83 net profit per dollar spent
- Expired listings: $21,000/$4,000 = $5.25 net profit per dollar spent
- Postcard mailing program to farm: $8,000/$6,000 = $1.33 net profit per dollar spent
- Newspaper ads: $6,000/$7,500 = 80-cent LOSS for every dollar spent
What makes using the second approach superior is that you can more easily compare which activities are the most profitable. If you were ranking these from the most to the least profitable, they would be: (1) expired listings, (2) website leads, (3) referrals, (4) postcard mailings, and (5) newspaper ads.
Consequently, if this were your production profile, your time and money would be best spent working on generating more leads from expired listings. Every dollar spent there generates $5.25 in return. The two other top areas are website leads and referrals.
The smart move is to take the money from bottom two categories (postcards and newspaper ads) and to allocate it to one of the top three categories. To show how this works:
An additional $6,000 from postcard mailing plus $7,500 from newspaper ads totals $13,500. If you diverted this money into marketing to more expired listings, it would generate an additional $70,875 ($13,500 X $5.25) for your business as opposed to the $14,000 it currently generates.
Being willing to let go of your least profitable activities allows you to have more funds to grow what is most profitable for you.
2. Eat that frog!
Motivational speaker Brian Tracy wrote a wonderful book called, “Eat that Frog.” This refers to handling the toughest item on your to-do list first each day. Procrastination is the primary reason people fail to achieve their goals. Each time we procrastinate about doing something, it becomes that much more difficult to complete.
Thus, always tackle your three highest-priority goals at the beginning of the day. Any amount of delay greatly increases the amount of energy and effort it will take to achieve your goals. This also holds true for your daily activities as well. You may hate calling on owners of expired listings, but if it’s one of your three most profitable activities, do it first and get it out of the way.
3. Use emotional rewards to make achieving your goals easier
Some people find that they are more effective in achieving goals when they have no emotional charge around achieving the goal. Slow, steady and calm works best for them. Others need the adrenaline and the pressure of a deadline. Each person is different — identify the strategy that works for you and use it.
4. Determine the environment that best supports you
Every action you take occurs in the context of your environment. For example, some people thrive in a noisy, boisterous environment, while others require absolute quiet. If you find yourself consistently being distracted when you’re working, change your physical environment. If the office is a distraction, work at home and vice versa. Take note of where you are the most efficient and spend your time in an environment that best supports your success rather than hampering it.
The late architect and futurist Buckminster Fuller summed it up well when he said, “Environment is stronger than will.” Set your priorities in order based upon your profitability, create a supportive environment, and have your best year ever in 2014.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.