So what other mistakes do real estate agents make when it comes to business planning? If you happened to land on this article, please have a read of "Top 13 Mistakes That Real Estate Agents Make in Business Planning - Part 1."
Let's continue with our top 13 mistakes that real estate agents make in business planning.
- Not Creating a Realistic Budget and Stick to It.
Unrealistic budget expectations can lead to a quick disaster. Your business plan should include a detailed budget that considers all your income and expenses. Without a budget, it will be challenging to track your progress and gauge whether or not you're on track to reach your goals.
Creating a budget may seem daunting, but many helpful resources are available to get you started. You can find templates and tips online or consult a financial advisor for assistance.
- Not Having the People Needed on the Team and Time to Hit Next Year's Goal.
One of real estate agents' most common mistakes is not having the right people on their team. Maybe you're short-staffed, or perhaps you're trying to do too much yourself. Whatever the case, it's crucial to have the right people to hit your goals. Otherwise, you'll simply be spinning your wheels. In addition to having the right team in place, you also need to ensure that you have enough time to devote to your business. Trying to accomplish too much in too little time is a recipe for disaster.
- Building Your Business Plan Based on Everybody Hitting 100% Of Their Production Goals.
It's unrealistic when real estate agents base their business plan on everybody hitting 100% of their production goals. There will always be team members who don't meet their goals for one reason or another. Rather than basing your business plan on everybody hitting 100% of their goals, base it on what you realistically expect from your team to help ensure that you're not setting yourself up for disappointment.
- Not Capping the Rainmaker Production to Determine How Many Sales Must Come From Team Members.
Another mistake that real estate agents make is not capping the rainmaker production. This means they don't determine how many sales must come from team members to reach their overall goal. As a result, they often end up with an imbalanced team that cannot generate the necessary leads and sales. By capping the rainmaker production, you'll be able to ensure that your team is balanced and can hit your business goals.
- Not Being Clear on Where Your Business Will Ultimately Come From.
Without this clarity, it's difficult to set realistic goals and build an effective marketing plan. So, before you start building your business plan, take some time to define where your leads will come from. Once you have this clarity, you'll be in a much better position to succeed.
- Building a Business Plan Not Based on Net Profit.
One of the most common mistakes real estate agents make when putting together their business plan is failing to base it on net profit. Instead, they base it on gross commissionable income (GCI). GCI is the total amount you earn in commissions before expenses are deducted.
On the other hand, net profit is what's left after all expenses are taken out of your GCI. This is the number you should be basing your business plan on because it's what you get to keep in your pocket at the end of the day. Make sure to account for all relevant expenses in your net profit calculation, including marketing, administrative, and continuing education expenses.
- Simply Not Having a Business Plan.
Ultimately, the biggest mistake real estate agents make is simply not having a business plan. They try to wing it and hope for the best, but this approach rarely works out well in the long run. A well-thought-out business plan gives you a roadmap to follow as you grow your business and helps keep you accountable. Without one, it's too easy to get sidetracked or make poor decisions that could cost you dearly down the line.
This concludes our list of the top 13 mistakes that real estate agents make in business planning. By avoiding these mistakes, you'll be in a much better position to grow your business and achieve your goals. If you are interested in learning more about creating a successful real estate business, be sure to tune in to our ClarityNOW podcast series where we interview some of the top agents and industry leaders in the business.
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