November 28 2020
Garden State Real Estate Academy is not just a real estate school. Actually, let me clarify that. Yes, Garden State is New Jersey’s top-rated school that helps people earn their NJ real estate license. But we are more than that. We also use our unique position to hire only instructors with decides of superstar success in the real world of real estate to help our classroom guests jump-start great real estate careers even after they earn their real estate license.
And whether they are about to take their real estate license exam or they already have licenses and are wondering what the next year will bring, this is the perfect time to create a solid business plan for 2021.
Where are you going?
Picture this. It is December 31, 2021. You are ready to go out to celebrate New Year’s Eve. As you look back on the past year, what do you want your 2021 to have looked like?
20 real estate transactions?
$150,000 in gross commission income (GCI)?
Your own team of three people?
You have to know where you want to be and how you will get there? As Dr. Seuss said, “You can have brains in your head; you can have feet in your shoes; you can steer yourself in any directions you choose.” But unless you want to just drift through 2021 without much purpose or direction, you have to be the one doing the steering.
Andrew Carnegie once said, “If you want to be happy, set a goal that commands your thoughts, liberates your energy and inspires your hopes.”
Before you can achieve anything worthwhile in life, you have to decide what that is—and why. It might be a GCI dollar amount, but you have to attach to that income goal a reason for achieving it. To some, it is to buy a new car, to others it might be to pay off a student loan or to take the family to Disney World without having to put any of the cost on a credit card.
If it’s not in writing, it’s not a goal
I was once asked to mentor a new licensee. “Why did you become a REALTOR®,” I asked him. “To have an unlimited income potential,” he immediately replied. “How much will you make next year?” I asked him. Without hesitation, he answered, “$100,000.”
But when I asked him to show me his plan for how he would attain that goal, he responded, “I don’t need a written plan. It’s all up here,” pointing to his head.
He didn’t have a goal; he had a wish.
Mark Victor Hansen, noted motivational speaker and co-author of the Chicken Soup book series said, “You control your future, your destiny. What you think about comes about. By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be. Put your future in good hands – your own.”
NOW is the time to plan your 2021 Year of Success.
So you have set a goal for 2021. Now it is time to put that in writing, because without a written plan, you have no way of tracking how close you are towards reaching your goal. For the sake of this illustration, I will use random numbers. All you need do is replace my numbers with those for your own goals and your own area’s average sale prices, commissions, closing ratios, etc.
My goal is to earn $150,000 in gross commission income in 2021.
In my marketplace, the average sale price is $325,000 and the average commission is 3% for each side, and we’ll assume I am on a 60/40 commission split with my broker. For brevity, I will assume that my entire income will come from sellers-side transactions.
|I should make $5,850 in GCI on every closed sale
|325,000 x 3% x 60% = $5,850
|I must close 25.64 deals in 2021 to earn $150,000 in GCI.
|$150,000 / $5,850 = 25.64
|Not every listing will sell. I’ll assume 65% of my listings actually sell and get to settlement. So to sell 25.64 listings I must have 39.45 listings next year.
|25.64 / 65% = 39.45.
|I know I won’t get a listing on every appoint appointment I have, so assume that I am successful in winning 60% of my listing appointments. I must therefore go on 65.75 listing appointments to earn my 39.45 listings.
|39.45 / 60% = 65.75
|Not everybody I contact about listing their property with me will give me an appointment. My broker tells me I must probably contact 30 leads to earn one solid listing appointment. I must therefore contact 1,972.5 potential listing contacts to get my 65.75 listing appointments next year.
|65.75 x 30 = 1,972.5
I want to take three weeks’ vacation a year, so if I divide 1,972.5 by 49 weeks, that comes to 40.26 lead contact calls per week, and if I want to prospect five days a week that comes to eight lead prospecting calls each weekday.
$150,000 may seem like a lofty goal. $1,972 prospecting calls may seem daunting. Buy anybody can make eight calls a day.
These are numbers that are, in my experience, realistic, but you should use your own numbers and then track, track, track your performance on a weekly and monthly basis. If it is taking 40 calls to get an appoint, or your appointment-to-listing ratio is 50% instead of 60%, simply adjust your calls until you hit your numbers.
Good luck and have an awesome 2021!
David C. Forward is a licensed real estate broker and instructor and was first licensed as a Realtor® 32 years ago. During his career, David and his business partner sold more than 500 homes in South Jersey. He is now School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, is a much-requested public speaker who has addressed audiences on six continents and is the author of 16 books.