ALISO VIEJO, CA, January 2, 2007 – Can you believe 2006 is complete?  Now, not tax time, is the time to review your results and create your new business plan for 2007.  This article assumes that you had a 2006 business plan and are using it to tackle 2007.  If you didn’t make a 2006 plan you can see how easy it is to review and create a new plan year-after-year.  Why, because each year your business mix changes and hence your business changes too.

TEST YOURSELF

Use the following scoring system to grade your 2006 performance.  Give yourself points based on completed work (maximum is 10 points, there are no partial points allowed).

1 point - for recording all Activities and Appointments
1 point - for entering actual expenses itemized or in aggregate
1 point - for entering all transactions for the quarter
1 point - for separately entering transaction expenses associated with closed transactions
1 point - for meeting expense projections
1 point - for meeting number of closed transactions projections
1 point - for meeting activity projections

Bonus: Add 1 additional point for each projection you exceeded in Activities or Closed Transactions and 1 point if you spent less money on Overhead or Personal Marketing than projected.

RESULTS

Point score 0-2
Shame on you, being below your potential. Shape up or your competition will ship you out.

Point score 3-4
Be careful you are really looking like Mr. and Mrs. Average Agent – and no one really wants to be here. Time to do something to kick it up a notch.

Point score 5-7
Good job – you are better than most other agents. You even have the makings of being a true long term Top Producer. Make sure you have a solid plan, tweak it, stay on track and work it.

Point score 8-10
You have your act together. Excellent! 2007 should be a great and profitable year for you.

NOW WHAT TO DO FOR 2007:

Part 1 - Revenue

Look and see what components need to be changed for 2007: Average Sales Price, Commissions Charged and/or Received, or a combination of all three.  Will you be on a new commission plan for 2007?  If you made your income goal for 2006 will you be increasing it for 2007?  If so, how much?  Your Income Goal is the crux of your business plan.  Your business plan consists of determining how much revenue you need to generate to pay all your business expenses and pay yourself.

Part 2 – Expenses

Expenses are the next section to re-examine.  You should have a whole year’s worth of information.  Now instead of making projections you should have some actual figures. 

• What was your actual direct cost per transaction?
• Do you think it will increase in 2007?
• What will you need to do with your marketing budget? 

The process of recording all your expenses is to get a handle on where you really spent money and what affect that money had on your business.  The first time you create a business plan you are making projections, now that you have a year’s worth of data you can use more accurate information.

The trick is to examine those marketing items that produced you results and if applicable do more of them.  Conversely, re-evaluate those marketing expenses that did not perform particularly well and consider reducing or eliminating them all together.  

Part 3 - Transactions

Review your closed transactions.  Examine the transactions you closed in 2006.  Transaction review has two parts, closed transactions and associated expenses.

Grading your Closed Transaction

• Did you meet your 2006 projection?
• Did your business coming from the sources you anticipated?
• Compare the number closed in 2006 with your new projection for 2007, is this doable?

Grading your Transaction Expenses

• On average how much did you actually spend to close transactions in 2006?
• Do you need to re-adjust transaction expenses for 2007?

Part 4 - Activities and Appointments

Did you record the Activities you are performing each week?  This is a MUST-DO and is the basis for making better decisions and running your business like a business.  If you didn’t, consider using an accountability partner, coach or mentor that will help you reach this goal.

Look at the Activities and examine those categories that you did not complete 100% of the projected number of activities.  Write down why you did not complete these activities.  Then ask yourself if this is an activity that you need to re-examine? 

When to re-examine?  Ask these questions:

• Is the Activity producing appointments for you?
• Does this Activity cost you money out of pocket?
• Are you getting closed transactions from this Activity?

If an Activity that is being re-examined has not produced an appointment, costs you money and does not produce transactions then it should be on the short list to be deleted.  Remember that some marketing activities are for general awareness and may be harder to extract an exact response.  If uncertain about eliminating a certain marketing activity, consider asking several people within your sphere that receive the piece about its effectiveness.  Most feel flattered when asked to help mold a business venture.

Now look at the activities that you met or exceeded performance projections.  Are there similarities between these activities? Do you like doing these activities more than the ones that you did not meet projections?   Before determining whether to stop doing an activity that does not seem to produce anything ask yourself the following questions:

• What are the costs associated?
• Is the Activities part of general awareness or specific intent?
• Can I change the Activity to make it more responsive or cost less?

Obviously, activities that have little or no cost have the least impact on your budget, financially, and should remain in your plan.    Review all activities and make corrections for 2007 to focus on those that produce more for you. 

Summary

For 2007 your business plan should still be focused on reinforcing those success-oriented habits of recording your activities, expenses and transactions.  Remember the golden rule of sales management, “If you cannot measure it you cannot manage it.”  With a new year upon you, an emphasis should be placed on streamlining your business.  This will allow you to focus on what works, jettison what does not and ultimately increase your return on investment.   

If you have never had a business plan you can see the gradual progression of using last year’s results to plan for the future, however, CreateAPlan is structured to easily allow new agents to build a plan from basic information. This online system does all the calculations, keeps track of all the numbers and weekly performance. To get on your career on the right track go to www.createaplan.com and create or restructure our personal real estate business plan.