It’s easy to sit down and write a business plan that starts collecting dust by February 1.
But crafting a plan that sets you up for massive success entails much more than deciding how many homes you want to sell.
I’m breaking down five steps to creating a business plan that you’ll stick to.
And it all starts with a vision.
1. Have a vision.
A few weeks ago, I heard Tom Ferry say, “When you don’t have a vision, everything seems like an opportunity.”
That stuck with me. In real estate, there is shiny penny syndrome, where agents gravitate toward the newest lead source, industry event, or marketing platform. These shiny new objects often appear like opportunities, but they take your focus away from your goals.
A clear understanding of what you want—and why you want it—will help eliminate distractions.
Your vision goes beyond your SMART goals, where you’ll get specific about what you want to accomplish throughout the year. When you do this vision exercise, take pen to paper as you think about the big picture:
- What difference do you want to make in your community?
- What legacy do you want to leave behind?
- What types of contributions do you want to make with your income?
- Who are the people you want to serve?
Go in-depth with your vision. The more you can envision this future for yourself, the more real it becomes. Being about to understand why you are putting all this effort into your work makes it easier to wake up every day and stay committed to your plan.
2. Create SMART goals.
Once you have a big vision, you can break it down into yearly SMART goals. It may be cliche, but there’s a reason so many industries rely on this method for business planning.
SMART goals are:
- Specific. There is no room for vagueness here. Exactly what are you setting out to accomplish?
- Measurable. Describe the end result in quantifiable terms. How will you know when you have reached the goal?
- Achievable. I use the term achievable very loosely because agents often sell themselves short. Consider creating both a realistic goal and a stretch goal to help you push past self-limiting beliefs.
- Relevant. Does the goal fit with the vision you created for your future self?
- Time-bound. A goal without a timeline is more of a far-fetched dream. Giving yourself a deadline creates a sense of urgency.
An example of a SMART goal could be:
In 2023, I will increase my GCI by 30% from $100,000 to $130,000.
This goal is specific, stating the exact GCI wanted, and it can easily be measured by tracking commission. With the right action steps taken, a 30% increase is achievable. The extra income is relevant to some type of bigger vision, and the goal also has a clear end date, making it time-bound.
3. Reverse engineer your goals.
Having a SMART goal of selling 10 homes is great, but what will you do daily to get those homes sold? Reverse engineering your goals helps determine your daily income-producing activities.
On my team, we’ve used the ratio of 40:1 in the past. This means that, on average, an agent had to have about 40 real estate conversations to complete one sale.
So, if an agent wanted to sell 10 homes, they needed to have 400 real estate conversations in a calendar year. With that in mind, you can reverse engineer your goal by dividing the total number of conversations you need to have by the number of days you plan to work.
Total conversations ÷ days working = conversations you need to have each working day
If you plan on working 270 days a year that means you need to commit to at least two real estate conversations every day you work:
400 ÷ 270 = 1.5 (round up to 2 conversations per day)
Because the market has shifted and because there is a lot more fear, uncertainty and doubt, the number of conversations you need to have will increase. My opinion is that we’ll need to have 80 conversions for every contract you get signed.
There will be days, and even weeks, when it feels like your daily activities aren’t producing results. But if you continue to do the day-to-day work and trust the process, you’ll reach your goals.
4. Attach emotion.
Most people make decisions based on emotion. Make the emotional connection to your goal so high that you feel pulled towards it, rather than white-knuckling your way to the finish line.
How do you do this? Determine what type of incentive makes you take action:
- Think about what you CAN do if you meet your goals. Get specific with this, whether it’s taking your partner on vacation, paying off student debt, putting your child into private school, or paying off your parents’ mortgage.
- Attach pain. Many people are more motivated by pain than pleasure. What will you and your family miss out on if you don’t meet your yearly goals?
Adding emotion is critical to achieving your goals. What will make you take action every day?
5. Create a System for Accountability.
Tell as many people as possible what your goals are, and find one or two people who will hold you accountable.
Finding people who won’t let you off the hook is essential. Make sure you and your accountability partner agree to be upfront and hold each other to the highest standard. You’ve heard it over and over—but without accountability, you won’t achieve your goals.
Start—and finish—2023 Strong
We know one thing about 2023: it won’t be like the past two years.
So take the time to create an in-depth business plan that will bring your business to the next level, no matter what happens in the housing market.