More than 90 percent of all real estate agents operate without a business plan. If you want to increase your profitability in 2009, you must address how to increase your revenue as well as how to decrease your costs.
There are numerous ways to create a great business plan. The most important step is to write your goals down and share them with someone else. If you do nothing else from today’s column, taking this one step improves the probability you will achieve your goals from 5 percent to more than 90 percent. Here are six additional steps for creating a powerful business plan for 2009.
Step 1: Analyze your numbers
Begin your business planning process by reviewing your numbers from 2008. How many transactions did you close? Where did each of those leads originate? What percentage of your leads closed? To increase your profits, track your results.
Tracking is challenging for most agents. To track results from mailing pieces, use a coupon code or a toll-free call-capture system. To track Web results, use Google Analytics, Point2Agent or GetClicky.com. To track the cost associated with each person in your database as well as the cost of each of your marketing campaigns, I recommend a new system from Broker’s Helper. (You can demo a full version of the site at www.AgentToolboxpro.com). This system includes more than 1,500 different online and traditional marketing campaigns (in both English and Spanish), a full-blown Web site, unlimited access to single-property sites (such as 333ElmStreet.com), plus 1,000 e-mail marketing pieces per month for $49.95 per month. (Postage, printing and the cost of promotional items are extra.) The system automates the marketing and tracking process.
Step 2: Focus on your strengths
Once you have analyzed your numbers, identify the activities that generated the greatest number of closed transactions. These are your strengths. You can increase your profitability by expanding on what’s currently working. The 80-20 rule says that 80 percent of your income is generated by the top 20 percent of your activities. Thus, you can safely eliminate the bottom 20 percent of your activities with little cost to your production, but with a big increase in profitability. For example, if Web marketing produced four closed sales and your geographical farming produced nothing, stop the geographical farming and put more funds in Web marketing.
Step 3: Enough about you — let’s talk about me!
If you’re still doing vanity marketing that focuses on you, it’s time to stop it. In a study of more than 1,000 consumers, BestAgentBusiness.com reported that virtually all people hated receiving cold calls as well as postcards with agents’ pictures on them. To improve profitability, interview your present and past customers about what matters to them. Ask for feedback about what they want from their agent, about which real estate Web sites they visit, and what captures their interest both in print and online. When you meet a new client, track how they found you. Conduct a post-closing survey to learn how to better serve future clients. Most importantly, stop sending out mailers with your picture on them. That alone can dramatically increase your profitability.
Step 4: Use motivators in marketing
Just announcing your services or accomplishments does nothing to motivate people to work with you. A proven marketing strategy is to provide special reports or other items of value. Use your print marketing to drive people to your Web site to obtain these. For example, you could run a postcard campaign that says, "Save money on your next mortgage. Visit www.yourWebsite.com to learn how!" Have the Web visitor sign up for the free report. Continue to market to them by offering other items of value. The Web site can explain that buyers who wait to purchase in today’s market potentially could face a higher interest rate on their loan and pay more over the duration of the loan.
Step 5: Be of service
If you want your community to support your business, look for ways to serve your community. One agent was not making any money from his SEO (search-engine optimization) program. He decided to drop the SEO program and give that money to his local food bank. He volunteered with his daughter one afternoon per week. His business increased by 15 percent. This "give-to-get" approach to marketing is one of the strongest ways to build your business. Be sure to include "give back" time as an important part of your business plan.
Step 6: Is your plan sustainable?
Once you have put your plan together, are you energized and excited or are you filled with dread? If you feel fear or dread about doing what you have written down, change it. If something doesn’t feel right to you, search for what does. Once it "feels" right, you’re now ready to start taking the actions that will lead to increased profitability in your business.
If you want your best year ever in 2009, create a written business plan, follow it, and adjust it as the market changes throughout the year.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com.
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