October is the time when most real estate professionals start finalizing their business plans for the upcoming year.
Unfortunately, many agents miss a crucial step: they don’t ask the right questions from the outset, leading to vague, unrealistic or ineffective plans.
To help you avoid this, I’ve outlined six essential questions you should ask yourself now. By answering these thoughtfully, you’ll be well on your way to creating a clear, actionable, and strategic plan that’s ready to go by the start of the 2025 fiscal year.
6 Questions To Ask for Creating an Effective Business Plan
Business planning is usually a reflection of what you did or did not achieve the previous year and what you want to get done in the upcoming year.
If you’re growing at 10-15-20% year over year, that’s a pretty incredible year for any business.
Don’t set yourself up for disappointment by expecting breakthroughs where you see 50-100% growth. That happens, once in a while, but 10% to 20% growth is scalable and repeatable. Think about that as you come up with your plan.
Many agents, in fact most people, don’t know what their business looks like this year.
I’m breaking down how to thoughtfully analyze your business first, so you’re able to come up with a plan that makes sense based on what you did in 2024.
It all starts with asking the right questions. I’m giving you six to ask yourself right now.Write these down and answer them to set up the foundation for your 2025 business plan.
#1: What did your business look like last year?
This question contains multitudes:
- How many homes did you sell?
- How much money did you make?
- What was your pre-tax income?
- What lead sources worked for you?
- How many appointments did you go on?
- How many conversations did you have?
- How many offers did you write?
If you’re noticing a theme here, there’s a lot of math involved in planning this out. And unfortunately, most agents don’t track their business. It’s a big implementation gap in real estate.
If you can’t see what your business did last year, you won’t be able to develop a thoughtful, achievable, smart business plan for 2025.
So, go back and gather all your numbers. Find the data. You might have to go back in your emails, your phone logs, your CRM, your calendar, or anywhere else you stored work-related information to find out how many appointments you went on.
You have to find the right data in order to have a thoughtful plan.
#2: How are you tracking your numbers?
A spreadsheet is fine if that’s what works for you. You don’t need fancy software—just some method of tracking your business activities.
Because if you’re not tracking your numbers, you’ll go through the same problem every year.
It’s like the person who tries to do their tax returns but doesn’t have a record of anything. It takes way too long to put it together. You want to look at this as, “Hey, I’m putting this system into my business to help me think smarter (and save loads of time).”
Then, as the year goes on, in January, you can see where you are. In February, you can see where you are. And you’re able to adjust because you’re tracking your business.
#3: How much money do you want to take home?
Real estate agents love to focus on top-line revenue. GCI—gross commission income—sounds sexy. Instead, look at net profits and pre-tax income. What are you actually taking home after expenses? Because that’s the number that counts.
If you spend $10,000 to make $12,000, you only make $2,000. That’s not a great return on investment.
You want to consider how much money you’ll actually take home in terms of income and profits from your business.
#4: What do you want to change in your business?
Is there something you’re not happy with—something you want to do more (or less) of? What are some changes you want to make in your next year as a real estate agent?
Don’t come up with 15 or 20 of these. Three is a special number. It’s a magic number. And what that’s going to do for you is it’s going to allow you to make some adjustments.
So, what do you want to change in your business?
Maybe last year, you had 20 buyer sales and sold five listings, and you want to increase the number of listings while keeping the buyer number the same.
Maybe you want to do slightly fewer buyer sales and more listings—whatever that change is.
Maybe you want to make sure you’re working five and a half days a week—not all seven.
Whatever changes you want to make, write them down and see logistically how they’re going to work so you can keep the productivity levels in your business high enough to bring in the income you want.
Another common mistake in business planning is that agents do something that works and then decide, “You know what? I’m not doing that anymore.” Instead, they try something brand new that they’re not very good at, and they don’t get the same results.
You want to understand what kind of changes you want to make and whether they are realistic. This is why “realistic” is one of the must-have elements of any S.M.A.R.T. goal.
#5: Is your plan visual?
Is your plan written down? Is it visible to you when you’re working? Have you shared it with the people on your team?
These are three basics of business planning. If you don’t have a written plan, then you really don’t have a plan. You also want to have it up and visible every single day so you’re looking at it all the time and know exactly what you need to do.
Your team also needs to be on the same page—literally and in terms of their daily priorities.
#6: Are you telling people about your plan?
If you’re the only one who knows about your business plan, there’s no real accountability there.
If you tackle the five previous questions and actually put thought into them, you can start to develop the strategies, the day-to-day, the number of conversations, and the number of appointments you need to go on. You’ve got to start here.
But without accountability and external input, it’s too easy to excuse yourself when you fail to reach your targets. It’s also too easy to set unrealistic goals.
So, instead of just writing up some plan and coming up with unrealistic numbers, look to the past guidance. Understand how you’re going to—
- Track how much money you’re making (vs. how much you want to make)
- Implement the changes you want to make
- Keep yourself accountable (to colleagues, family, friends, etc.)
- Look at the plan on a regular basis and make changes as needed
This is a great starting point to have a successful business plan in 2025.
