The Real Estate Encyclopedia
Fail to Plan, and Fail By Default
Category - Real Estate Information Sources - Real Estate Articles

Is it Already Fall?

With the fall season approaching, many real estate agents are beginning to look to the New Year with a renewed interest in “doing better”. Whether this principle takes the shape of stronger ROI, a fatter profit margin, a new marketing campaign, or a rigorous phase of growth and recruitment – in the corporate environment, fall has always ushered in the time of reflection, evaluation, and preparation. But before you dive right into authoring your 2006 business plan, ask yourself a question: are a goal-setter, or a planner? These roles are not the same.

Almost anyone can set a goal – in fact most fitness companies bet huge marketing and advertising capital on it – but goals alone offer no means by which to accomplish them. Goal-setting is as arbitrary as making the statement, “I want to earn a million dollars!” While this may be an ambitious pursuit, if you actually intend to earn $1,000,000 in 2006 you need a definitive roadmap to clearly direct the actions you need to take in order to reach that goal. Remember, a goal is no more than a misguided, flippant intention if not accompanied by a solid, well thought-out plan.

Casual Endeavor or Committed Plan?

For example, let’s revisit the fitness metaphor for a moment and say you’ve laid out a personal health goal to lose 40 pounds over the next 12 months. If you do no more than mentally set that standard, you’ve done nothing more than make a wish. So let’s say you take the next step: you write your objective down on a piece of paper and tape it to your bathroom mirror (you are still “wishing”, but at least your goal now exists somewhere within the physical universe).

Unquestionably, you should be commended for the steps you’ve taken so far. Rather than wander your way through life, you’ve attempted to take some control and effect some amount of self-discipline. However, now you need a basic plan for losing the weight - a plan that would at least involve evaluating your diet, calculating how much less you need to consume, and how much you would need to exercise in order to achieve your goal.

Now granted, thus far your plan is obviously a very basic, but it should eventually get the job done. If you are more serious than merely offering up a fleeting undertaking, a more in-depth plan must be considered. That plan might include a thorough examination of how much time you have to lose the weight, along with exactly what your exercise routine should be. Better yet, your burgeoning plan would involve a specific change in diet with a daily list of consumption, an exercise routine allocated to meet your desired results, and a way to track your progress and subsequently make any appropriate changes along the way. Now, with more than just a mere hope, you have something worthy enough to be put on your bathroom mirror (or more appropriately, your refrigerator door) a specific plan devised to achieve a specific goal of losing precisely 40 pounds over the next year.

So, simply stated, a plan is a calculated set of instructions to guide you toward a desired outcome.

Taking it to Real Estate

Now superimpose this mindset onto your future aspirations. Are you prepared for 2006? It’s easy to understand how the business plan is one among a handful of essential tools necessary for your success in real estate. Add I-N-G to your business plan and you have the activity known as “Business Planning” – the process required to formulate actions that will catalyze the growth of your real estate business in 2006.

The most critical task in any business planning effort is calculations. By starting with your “Wish List” (i.e. how much you wish to earn), your business plan will help you examine the key aspects of generating positive income: revenue, expenses, and business development.

Revenue is not income. Revenue is defined as gross earnings before expenses and taxes. Do not confuse the two. Higher income starts with greater revenue generation, which in real estate translates into more “Closed Transactions”. Expenses, in turn, are typically the number one reason agents leave the industry. Most real estate agents who work on a fulltime basis create sufficient revenue, but constantly struggle to control their expenses. Therefore, your plan must factor in every last projected administrative, marketing and transaction expense – both fixed and variable.

The Power of a Plan

A solid business plan is not a “fly-by-night” operation. It is a healthy process, on both practical and fiscal levels. It takes into account all of the issues mentioned above, closely guards time, and weighs all possible efforts …until it finds the right balance between the optimum personal performance you can attain in serving your marketplace and the new expectations you are placing upon yourself.

Using your business plan, you can now track all tasks, including appointments and transactions, developing a running effectiveness matrix. An effective matrix is simply a flexible list that can distinguish which of your activities is generating the best and most profitable results.

Business planning, of course, can start on the back of a napkin. Or, you can spend endless hours analyzing your key figures in a devoted notebook of pertinent papers. Whatever route you choose, take the time to sit down and create your plan. Get away for a weekend, use tools available to you, and think.

A Suggestion

If you could use a helping hand in creating your business roadmap for 2006, check out the online business planning tool at Simple and easy to use, this program is not only a lifesaver, but also the smallest investment you can make towards reaching your goals for 2006.

No matter what, though, don't get caught without a plan, come January 1st, 2006 (which is exactly 100 days from today).


External Links
Real Estate Information Sources - Real Estate Articles
Home   |   About Us   |   Contact Us   |   Patrons   |   FAQ's   |   Site Map
© 2008 - All Rights Reserved.
Thank you for visiting Real Estate Wiki - the leading dictionary, directory, encyclopedia and glossary for the real estate and mortgage industries .