7 Critical Errors Made in Business Planning

Real Estate Agent with Real Estate

1) Confusing Goal Setting with Business Planning.  Plans are calculated; goals can come from thin air. 

2)      Excluding Transaction Costs from your Business Plan- The more transactions you do the more money you will spend, your plan should take that into consideration.

3)      Omitting Activities from your Business Plan - a Business Plan is to break that income into activities that you will accomplish each and every week.

4)      Focusing on GCI (Gross Commission Income)- GCI is not a measure of profitability, it is a measure of gross revenue before split and franchise fees.

5)      Paper - A properly constructed business plan should be dynamic enough to keep you informed of where you are in your business, hard to do with paper. 

6)      Not Calculating Overhead per Transaction - Overhead per transaction is the figure that summaries the total amount of overhead that comes from each commission check.

7)      Having No Accountability- Your Business Plan should allow you to hold yourself accountable for Activities, Expenses and Revenue.

Comments (2)

Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
Good post and good information. Thanks for sharing.
Oct 25, 2007 06:28 PM
Susan Walters
Keller Williams Realty, Ann Arbor, MI - Ann Arbor, MI

There's so much wisdom in what you just enumerated.  I particularly identified with #6 regarding buyers.  Make sure they are pre-approved; if they hesitate, they are not serious.  Get them to sign buyer agency; if they hesitate, their loyalty is not with you.  Get them to set limits; no one can see it all!  I wasted a lot of time in my early real estate career thinking my work would be beneficial and lead to referrals.  I can see the difference now and after a point can easily say, "pick one or we're done", in kinder words though.  I have been through too many expensive sight-seeing tours to ever go back there again!

Oct 25, 2007 06:34 PM