The Top 10 Mistakes When Doing a Real Estate Business Plan

Home Inspector with The S T E R L I N G Inspection Group Inc.

The Top 10 Mistakes When Doing a Real Estate Business Plan
by Jordan Goodfellow

We are almost through 2008 and should be concentrating on next year's plan. Perhaps this is a good time for a memory jog!

Statistics show only 3% of us operate with a written business plan. If you are part of that elite group, you are probably reaping the rewards that come from knowing what you want, where you want to go and how you are going to get there. Van Gogh remarked, "Great things are not done by impulse, but by a series of small things brought together."

If you've been part of the 97%, but are ready to face the new year with a resolve to raise your standard of greatness, spending time creating the plan for next year will be the best time you spend all month.

I am not, however, talking about a perfunctory plan that you quickly create by just looking at your numbers. You are more than your numbers. Author David Kekich says, "An hour of effective, precise, hard, disciplined - and integrated thinking can be worth a month of hard work.

Thinking is the very essence of, and the most difficult thing to do in business and in life. Empire builders spend hour-after-hour on mental work... while others party. If you're not consciously aware of putting forth the effort to exert self-guided integrated thinking... if you don't act beyond your feelings and you take the path of least resistance, then you're giving in to laziness and no longer control your life."

So let's take a look at some of the pitfalls that could trip you up on the way. Here are the biggest mistakes that I see in my coaching practice.

1. Not planning time to think and create a plan.
To fully design and create your plan for 2009, I recommend at least a full day. Many agents will plan a retreat with their team, or just go away for a weekend without distractions to focus. Working on it piecemeal when the time shows up is a sure way to fail. Time-block NOW an appointment with yourself to work on this. The time you need will not show up -- you must carve it out.

2. Failing to gather ALL the data from this year.
The numbers from this year must include more than just the total production and number of units. What was the SOURCE of each transaction? What was the cost of each listing? What was your NET profit? What was your close ratio on listing appointments? 


Each piece of information will inform you about where your strengths are and what untapped business is waiting for you.

3. Incrementally increasing your goal based on last year's results.
The normal method employed by agents to set next year's goals involves choosing a number that is somewhat above last year and then using some formula to tell them what their monthly and weekly actions should be. This is rarely exciting and energizing and usually results in having to work more, work harder or work faster.

4. Not factoring in reserve.
Most agents do not take into consideration that crisis will occur and stuff will happen. By figuring what needs to be produced to hit the goal and not allowing for reserve, they are always falling short and feeling that it is not going to work, or frantically running on adrenaline at the last possible moment to pull it off. Always assume you need 20%-30% more.

5. Not knowing the why.
This should really be #1. What is the reason you want to produce what you want to produce next year? If you attained your financial goal, or the number of units you want to close, what would that give you? If you attained that financial goal, why would that be important? Are you working to accumulate more stuff or to have a certain quality to your life that is joyful? 

The why is the key to your motivation and your willingness to be in action. Keep asking yourself, "Why do I want this?" or "what will getting this give me?" until you get to the bottom of what is REALLY important to you. These reasons are your values. Miracles happen when we know our values and our work reflects them.

6. Not planning in the personal first.
Speaking of the why-.there is also the "who." Your personal foundation must be deep and strong to build mighty structures above the ground. Does your plan for the year include time for yourself, your growth, your family and your interests? One of the first pieces of your planning should involve how much time off you will take next year and how your perfect work week looks. If you did nothing else this year but worked on your own personal development, I know you would probably have the best year ever.

7. Not looking for the new opportunities.
What gave you success last year or this year is not the key to your future success. In fact, if you aren't radically shifting the way you deliver your services and reach people, you may not be in business much longer. What new ways of marketing do you need to employ? How can you partner with others who may be interested in the same target markets and may help create a win/win? What new market segments or niches are, as yet, un-served? Who do you have an affinity with that is a perfect new niche?

8. Not designing strategies to leverage what you already have.
Are you leveraging your best clients and customers into your referral engine? Have you thought about how you can increase their loyalty and increase the value you provide them? The cost of finding new prospects is much higher than creating more business from folks who already know and love you. Get creative here!

9. Not making it a big enough stretch to get the creative juices flowing.
Thinking small rarely inspires. It's those impossible dreams, realized, that are able to stimulate our thinking and actions.  When our goals become a game to play, rather than a measure of whether we are good or bad, we can let go of the attachment to a result and just find some innovative and fun ways of expressing our commitment to excellently serving our clients. The money flows when we love what we do and we have a big enough game to play. Boredom results in playing too small a game.

10. Not creating a structure for fulfillment.
Even with a good plan, not having a way to stay focused will trip you up. Do you have a partner to keep you on track? A coach who can see the big picture? If left to our own accountability systems, we are prone to sell out on ourselves. A coach actually knows you can do more than you think and reminds you of who you really are, instead of buying into the excuses that seem reasonable. Accountability and focus are both critical for the implementation of your plan.

Did you find Jordan's article thought provoking?  I sure did!

You would not go on a trip to a destination they've never been to before without a road map.  So why not set up a "Road map" (marketing plan) for their business so that they can reach their business destination in record time with less hassle?

This might sound a little corny but it's true:  Plan your work and work your plan!  You see people don't plan to fail, they fail to plan!  Planning is critical for your success and mine!

Ok, that's it for this week!

I hope 2009 is the best year you've ever had in the Real Estate Business and of course

S T E R L I N G Home Inspection Services wants to be part of your Winning Team! 

We strive to be a Compliment to your professional sales process, not a hindrance!

So Give Us A Call Today To Get Your Next Inspection Scheduled.

S T E R L I N G                                                                                                                                                                   Home Inspection Services


Comments (7)

Retired Notworking
Tallahassee, FL

Michael, thanks for sharing the plan. These are good points that we need to be reminded of until they are 2nd nature.

Jan 01, 2009 09:42 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Great points, thanks for pointing them out

Jan 01, 2009 09:48 PM
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

good article! I need to spend more time planning

Jan 01, 2009 09:49 PM
Marty Remo
RE/MAX Benchmark- Marty Remo-CDPE, E-Pro - Monroe, NY
HV Home Team

Great points, thanks for pointing them out. There is certainly a lot to consider.

Jan 01, 2009 10:10 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

And...nothing is set in stone, review, revise (if need be) re-work and work and work....and voila success...and to you in the new year !

Jan 01, 2009 10:32 PM
Anne Hensel
South Beaches Real Estate Professionals - Saint Petersburg, FL
Realtor - Broker - St. Pete Beach, Treasure Island

I think a lot of business plans fail because the do not have any time management in them that would e realistic. They fail to account time for the "Unexpected" and that is a lot of time in Real estate

Jan 01, 2009 11:07 PM
Norma J. Elkins
Elite Realty Group - Morristown, TN
Realtor - Elkins Home Selling Team

Great post - thanks for sharing!

Jan 02, 2009 12:00 AM