# The Simple But Powerful Compound Effect For 2020

By
Real Estate Broker/Owner with Royal Lepage Kelowna

How you ever thought how your real estate business is really just math? That’s right your business is numbers and formulas and equations if you really take the time to break it all down. There are only 4 simple activities that an agent can do each year to improve their business and make more money than previous years. Do you know what those activities are?

1. Increase your average sale price. Increase the average sale price you increase the average commission payable per sale, right?
2. Increase your average commission sales rate. Stop cutting your fee and fight for your value. Start asking for more at a listing 7% and making them feel like they got a concession if you have to and settling at 6%.
3. Increase the transaction activity with your clients. Get the repeat, referral business or start selling them investment properties over and above their personal residences.
4. Simply sell more properties each year than the previous years.

So let’s look at the math part of it. Take the goal for 2020 of 26% increase. Does 26% increase sound too high? Unattainable? Unrealistic to you? Let look at the math of our business using the goal 26%.

Look at this example below of an agent in their first year who earned \$50,000 gross in 2019. Average commission income per sale was \$5,000 and basically did 10 deals the past year. Now lets implement the 26% goal to their first year business and see what starts to happen…..

Year  1- 5 Agents Numbers ( Just adding 26% more sales ) not changing commission rate or frequency

Income                       Avg. \$ Earned                            # Deals

\$50,000                      \$5,000                                         10 Deals

\$63,000                      \$5,000                                        12.6

\$79,380                      \$5,000                                        15.87

\$100,018                    \$5,000                                        20

\$126,022                    \$5,000                                         25.2

Did you see the math and compound effect of 26% on number of sales and what happens every 3 years?

An agents income and number of deals doubles every four year setting an annual goal in just one activity!!

Years 6-10 Agents Numbers the same result every 3 years still. The math doesn’t lie!!

\$158,787                            \$5,000                  31.75

\$200,071                            \$5,000                  40

\$252,018                            \$5,000                  50.4

\$317,542                            \$5,000                  63.5

\$400,102                            \$5,000                  80

Take the time to run these same numbers by increasing the sale price ( which will increase your commission number ) and see what the numbers do? What if you add an increase of repeat, referrals and start welling clients investment properties? Imagine what kind of a compounding effect 26% would have for you and your business? Focus on how I can increase my sale price in 2020? How can I increase my commission average per sale? How I can increase my referrals, investment sales? How I can increase my number of sales? Let the math and the compound effect work for you in the coming years!!

Strength and courage,