Run Your Business Like a Business

HOW MUCH INCOME DO YOU NEED TO RUN YOUR LIFE?

Most agents adjust their lifestyle based on the revenue they earn each year. Unfortunately, that has most agents living from feast to famine. In good years, they spend like drunken sailors, and in bad years, they often resort to taking on a side hustle just to pay the bills. The first step in business planning is taking a time out to consider how much it costs you to live your life (to pay your mortgage, run your household, pay for your vehicles, put your kids through school, pay for groceries, go on vacations, put money away for retirement, etc.) Every one of us has different expenses, and it is a very enlightening exercise to figure out what it costs you to live. The income you make from your business, plus whatever income your spouse or partner makes, must be enough to cover these personal expenses. If you haven’t done this exercise in a while, it is your top priority right now.

WHERE WILL YOUR BUSINESS COME FROM?

Knowing how much you need to earn is great, but the next question you must answer is “Where will I get that business?” I’m a big believer in playing to your strengths. There are hundreds of ways you can generate business, but you will have the most success if you use strategies that you are naturally good at. Start by analyzing where your business came from over the past five years. Make a list of every transaction you closed, and beside it write down how you got that business. This will give you a clear picture of what’s working best for you. One caveat I have is that if you always do what you’ve always done, you won’t grow. For this upcoming year, put your resources into the lead generation strategies that have worked best for you, but add one or two strategies that you’ve never used before. As the market tightens up, you will need to expand your prospecting strategies to continue to close the same amount of business.

WHAT STRATEGIES WILL YOU USE AND WHAT WILL THEY COST?

Most agents are a little ADD when it comes to lead generation. They are seduced by the next shiny thing, and they jump in without figuring out how much it will cost and then they don’t see it through to success. Once you define WHERE you will hunt for business, you need to figure out the HOW. Let’s say you’ve analyzed your business from the past 5 years, and you know that 50% of your business came from networking in the community. You’ve decided that will be one of your main lead generation strategies this year. Great! Now what does that look like? It won’t just magically happen. What networking groups will you join? What is the time commitment? How much will the memberships cost? What will you do at those meetings to add to your database? How will you nurture those relationships outside of those groups? When I was selling real estate, I analyzed my business and discovered most of my business came from 25-30 referral sources. Once I knew that, one of my strategies was to work those relationships at every opportunity to ensure that business kept coming my way. Every week I made a point of taking one or two of those people out for coffee or lunch. I added that cost to my budget so I could track how much I was spending on each person and compared that to how much business that generated.

GIVEN YOUR COSTS, CAN YOU MAKE ENOUGH PROFIT?

Now that you know WHERE you want to look for business, and you know HOW you will apply strategies to get that business, you need to figure out WHAT that will cost and if it is profitable. When I talk about costs, you need to think about time, money, and effort. Strategies like door knocking may not cost a lot of money, but it is a huge investment of time. Strategies like sending out an automated postcard campaign may cost money, but it won’t require a lot of your time. Strategies like creating a loyal social media following will require a lot of time and a lot of effort to come up with compelling content every day. For every strategy you intend to apply this year, write down the amount of time, money and effort it will require. Is it worth it? You only have so many hours in the day, you only have so much money in your bank account, and you only have so much brain power to expend learning new things. Use your resources wisely. A good carpenter measures twice and cuts once. A good businessperson analyzes the potential upside and downside of potential strategies before they jump in.

HOW DO YOU ENSURE YOU FOLLOW THROUGH?

The only way you will follow through with your strategies is if they live in your calendar. Once you define your strategies, like taking one referral source out to lunch every week, that activity must live in your calendar, or it won’t happen. Running a successful business takes planning, prioritization, and execution. The more you systemize your business and develop good habits, the more you will get done in a day. Time management is a lost art with all the technology around us. It is so easy to go down the social media rabbit hole, allow timewasters to trap us, and lose valuable time. If you are not good at managing your time, the coming market may be a problem for you. Spend one hour every Sunday planning your calendar for the upcoming week. Start by looking back over the previous week to see if you got done everything you planned on. If not, prioritize those tasks this week. Review your list of lead generation strategies and block time on your calendar to complete those tasks each week. Block time for meeting with clients. Your best time to complete administrative tasks is first thing in the morning when it is too early to call clients. Don’t forget to block time for your personal commitments, but, if possible, book your personal appointments during off-hours so it doesn’t interfere with your work.