Dirk Zeller is a speaker, author and CEO of Real Estate Champions. His company trains more than 350,000 real estate professionals each year through live events, online training, self-study programs and newsletters. He's written several articles and books, including Your First Year in Real Estate, Success as a Real Estate Agent for Dummies and Telephone Sales for Dummies. To learn more, visit http://www.realestatechampions.com.
Make the Most of Your Fourth Quarter
Around this time of year, business tends to slow down. But real estate pros should view it as a time to set themselves up for success next year.
November 1, 2009
With the holidays around the corner, the fourth quarter of the year is typically a time when people start to slow down, and real estate pros are no exception. But when most practitioners are slowing down, it's time to speed up.
I would argue that the fourth quarter is the most important quarter of the year for all practitioners. For some, it's the time when they can push themselves to meet their production goals for the year. It's also the time when real estate pros can set themselves up for success next year. Most practitioners believe that the new year starts when they tear the month of December from their calendar. But with transaction closings taking 30 to 60 days, the new year starts anywhere from Nov. 1 to Nov. 30, depending on the market.
You also should begin the business-planning process for the next year early in the fourth quarter. For example, I typically get the ball rolling with my coaching clients in September and complete the process by end of October. If you haven't begun to plan your business for next year, start now.
There are two keys to an effective business plan. The first is constructing a plan that flows from the gross revenue goal or gross commission income goal all the way down to the number of appointments that need to be booked. When you have that level of clarity in the number of appointments with sellers and buyers you need to create, you have clearly defined targets that you need to achieve for the new year. Those connect to the revenue goal so you have a clear pathway to your desired income. It also becomes difficult to hide if you are behind on your goal. If you place yourself in situations where the desired result is plain and unmistakable, you will improve your performance.
The second is that you must incorporate the four key-conversion ratios so you have complete accuracy. These are:
- Listings taken vs. listings sold
- Buyers committed vs. buyers sold
- Listing appointments vs. listings taken
- Buyer consultations vs. buyers committed
Each of these ratios will help you create accuracy in your business plan. Take the first one, for example: Out of all the properties that you list, not every listing that you take will sell, especially in today's market.
Buyers committed vs. buyers sold is essentially how many buyers you get committed to work with you as their exclusive agent against how many out of that group really buy and close. Again, it's not a one-to-one ratio.
The ratio of listings appointments vs. listings taken evaluates how effective you are on your listing presentation. While many practitioners get 90 percent of the presentations they go on, others languish at half or less. There will be a large difference in the number of appointments you need if you are at 50 percent rather than 90 percent. Buyer consultations vs. buyers created is similar. You are presenting to, interviewing, or consulting with buyers to secure them as exclusive clients.
A well-constructed business plan provides a blueprint for action, activity, and results to keep you motivated and on track. If you need help, your broker may be able to assist you. You might also consider an independent real estate coach who specializes in the business.
Don't delay in starting on your business plan for 2010. You will want to work on it over the course of a few weeks, picking it up and putting it down intermittently to gain perspective. If you put in the proper preparation, 2010 could be your best year ever.