A Coach’s Guide to Maximizing Your Profitability in Your Real Estate Business
Because most business plans focus only on the numbers, they’re not particularly motivating. To maximize your profitability, you must also address how your beliefs, attitudes, and feelings either support or undermine your ability to take the actions that result in success. This article walks you through proven strategies that have been shown to yield real results for decades—take advantage of them!
Looking at the number of calls you’re supposed to make or the number of transactions you hope to close isn’t particularly motivating for your brain. What does motivate your brain are the personal benefits you and/or your family will obtain from taking those actions. Here’s the step-by-step process to follow to maximize your profitability in today’s tough market.
1. Set up your evaluation matrix
Begin by dividing a sheet of paper into four separate parts and label each corner:
- “Love to do and profitable” (upper left corner)
- “Hate to do but profitable” (upper right corner)
- “Love to do but not profitable” (lower left corner)
- “Hate to do and not profitable” (lower right corner).
2. Identify your personal best
List all the transactions you have closed in the last 12 months. Next to each transaction, note where the lead originated. (This could be working with expired listings, geographical farming, open house, paid leads, relocation buyers, social media prospecting, etc.) Of those lead generation activities, identify the top 50 percent that were the most profitable to you in during the last 12 months.
Now sort these activities into two more groups: “love to do and profitable” and “hate to do but profitable.”
Place the “love to do and profitable” in the upper left-hand corner of your matrix. These are the primary areas upon which you should build your business during the next 12 months. The key to success is to focus on doing what you love. Don’t waste your time trying to do what you don’t do well.
3. It’s not fun, but it makes money
Place the remaining activities from your top 50 percent most profitable in the top right-hand corner (“hate to do but profitable”). Consider delegating these activities.
For example, if you hate working with buyers, form a partnership with someone who loves working with buyers. If you hate paperwork, hire a transaction coordinator. By focusing on your strengths and delegating your weaknesses, not only will you be more profitable, you will provide better service to your clients as well.
4. Eliminate what is not profitable
The hardest quadrant in this model to cope with is “love to do but not profitable.” As you look at the activities that resulted in closed business, notice what you’re doing that did not generate any business.
For example, are you still mailing to an area where you obtained no listings during the last 12 months? Have you regularly held open houses and generated no closed transactions from that activity? If an activity has not produced a profit for you, it’s wise to stop doing it. The easiest place to start is with the “hate to do and not profitable.”
For the next 12 months, devote the time, money, and energy you spent on unprofitable activities during the previous 12 months to those areas that were profitable.
5. Set your income and closed transaction goals
Assume you closed 20 transactions in during the last 12 months. If you double the amount of time that you put into your most profitable real estate activities (i.e., by eliminating what is not profitable), most agents easily increase their closed transactions by 50 percent or more.
6. Use the 3-2-1 approach daily
Once you have created your business plan, ask the following questions at the beginning of each day:
- What are the three business activities I absolutely must complete today? Complete these three activities first before doing anything else.
- What two self-care activities will I choose today to keep me balanced mentally, spiritually, emotionally, and physically
- What is one activity I can complete today that will help me have business tomorrow?
The challenge for most Realtors is that they allow less important activities to intrude on their top three priority items. Treat these appointments for self-care and creating new business with the same priority you would attach to a listing appointment.
7. Use the “4-3-2-1” approach each month
Use this approach to schedule your time off—treat it as the same priority as a listing appointment. Schedule:
- A minimum of four full days off each month.
- At least three nights each week where you have dinner with either family or loved ones
- Two days per month where you spend a full day with friends and/or family.
- At least one day completely for you where you play golf, get a massage, or do whatever you need to do to recharge.
8. Track your progress
Experiment with this approach for one month and then evaluate your progress. If your sales are increasing, stay the course. If not, look at what could be altered to improve your sales.
9. The real secret of success
Review your business plan, including your income and transaction goals, at least twice a day. Keeping your goals in front of you constantly is the secret to achieving them.
If you can follow the guidelines above while also envisioning yourself fulfilling both your business and personal goals, your business will soar like it has never done before.