This gets my vote for the "Best Post of The Year" by Debbie Gartner. This is a must read. How many of us do a business plan...all of us, right? Well, before you start on your 2011 BP, read AND APPLY Debbie's outline and strategies. I guarantee you will have a much more effective, achievable and powerful plan!
Business Planning 202 - Making 2011 Super Successful. This is inspired by David Popoff's post 1-3-5 Business Plan for Real Estate Agents and his challenge for me to take it to the next level. As background, I have an MBA in marketing and 12 yrs biz experience running multimillion dollar and almost billion dollar brands - I'm sure you've heard of most of them. So, thought I'd share with you how I approach things. (Sort of the P&G model).
Sorry for the length, but the content is meaty and I think/hope you'll find helpful.
Step 1: Business Analysis. You have to analyze what has worked/hasn't worked in the past, esp this last yr. At Procter, we actually spent 2 months on this...that's how important it is. But, here are main bullets:
- At a min, list out what's worked/what hasn't - this can be related to your marketing elements/lead generation, sales strategy or even attitude/approach
- Analyze your marketing elements - how much did each cost? How much did you get for that cost> You can analyze this as cost/lead or cost/appt or cost/$ sold (I do all 3). You can also try to analyze this based on time spent vs. return. Once you have this done, it is usually very obvious what you need to start doing more of and what you should stop doing. Remember, it's not always about spending more...often, it's about shifting things around and spending more wisely. (Same goes for time spent on activities). This one step is one of the most important and valuable areas in the planning process.
- Note any opportunities for growth. This could be based on what you think or observed in the market place or ideas you've read about here on AR or what you've seen competition doing. Try to make an intelligent guess on what this could be worth/how efficient it is. This is much easier to do after you've done the above bullet.
- Analyze your actual results for this year -What are the building blocks?. How much did you get in sales? What was your close rate? What was your average job size or commission? How many leads did it take?
Step 2: Develop an Objective (or a goal). This might be a profit # or a sales # or both. Make sure it makes sense for you. It should be stretching, but achievable. (E.g. your objective could be to be the #1 team in your area (or your company) and goal to be XX in sales (which leads to Y in profit). Figure out what's right for you.
Step 3: Develop a Bus plan that reaches that goal...building block style...backwards engineer it. So, if your goal is to hit $1,000,000 in sales, figure out the building blocks to get there. For me, that might look like this:
Average job size = $4,000. That means, I need 250 jobs sold. (i.e. 1,000,000 divided by $4,000)
Ok, so what does it take to reach 250 jobs sold? Well if my close rate = 50%, then I need 500 appointments.
So, how do I get 500 appointments? Well, if my slippage rate is 50% (or said another way, if I can only meet w/ 1 out of every 2 leads), then I need 1,000 leads for the year.
How do I know this???? Because I did this work in Step 1.
$4,000 Avg job size
250 jobs needed
50% close rate
500 jobs needed
50% slippage - people that expressed an interest but I wasn't able to meet with (or they just weren't ready yet)
1,000 leads needed
So, now I know what I'm shooting for in order to reach my goals. I might do a sanity check and look at those #'s by week or month to make sure they seem reasonable. So, for me, that looks like 20 leads per week which leads to 10 appts and 5 sales (which for me is doable).
Step 4: Develop your strategy. Okay, this part I have difficulty explaining how to do, but it is super critical. Strategy is what you are doing (or not doing) and what differentiates you in the marketplace. I always have 3-4. An example of one I added this year was to improve customer loyalty. It was specific enough to direct me but sufficiently broad to not limit me to one or two tactics. In fact, there were prob. 6-7 things I did here to improve this area. As a result of our efforts, we now have a lot more repeat biz this yr vs. last yr. Next yr we are going to broaden to get more referral biz (i.e. customer referring us to their friends...this is happening, but it can/should happen more often than it currently is...OPPORTUNITY!
Step 5: Develop a marketing plan (or the tactics): I build this up. My strategy is top down; my tactics bottom up. I do a combo of what has worked before and fits w/ strategy and then based on strategy what needs to be added or shifted. I literally build a grid by tactic which says I will spend X (or spend time doing X) which will result in Y leads and Z appts and I build my plan up (based on analysis and interpolation from Step 1. I make sure that I end up w/ at least 1,000 leads and 500 appts. Some tactics are more effective than others; some are more efficient than others...but what matters is that the combo meets or ideally exceeds your #. Best to have it exceed since there will be overlap of your marketing tactics and also better to blow your goals out of the water than fall short.
$ spent # leads # appts # jobs
Each year, I try new things. Sometimes I have no clue how much biz they will generate, but I at least try to make an educated guess. and, even if I'm not right, I get better at it the next year.
I hope this is helpful for you. I know most of you are realtors and this may be based on commissions, but hopefully, you can search & reapply this to your business.
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Debbie Gartner, President and Owner
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