If someone were to ask you the question: What is your average sales price? Would you know the answer?
What if they asked you to break out your average sold listing price verses your average sold buyer-side transaction price?
What if they got all up in your grill and asked…Well then…do you know how many closed transactions you have to close per year to meet your personal and business financial obligations?
If you could answer more than one of these questions with less than 2 hours of research you are doing far better than 80% of your peers in real estate…
In the military there is a term called “situational awareness”…The definition of situational awareness (SA) is “being fully aware of one's surroundings by identifying, engaging, and eliminating potential threats and dangerous situations in advance of becoming a target”.
SA is more of a mindset than a hard skill. Because of this, SA is something which can be practiced not only by highly trained government agents… but also by anyone with the will and the discipline to become aware and prepared. SA is not only beneficial for recognizing threats to your person… but can also serve to identify potential threats to your business and your income.
The primary element in establishing this mindset for your business is first to know your business from the inside out…which includes your numbers. Today we want to focus on your Lead Generation Awareness (LGA).
LGA starts with establishing an income goal for a set period of time... (in our examples we will use 12 months but this works for times periods as short as 90 days). We will use a round number of $100,000 gross income goal for the next 12 month period (this is before taxes and business expenses). This breaks down to $8695.65 monthly income…or $400 per day…and $50 per hour. This is assuming you will work 8 hours per day, 5 days per week, and take only 2 weeks’ vacation.
The next step is to determine your average commission per closed transaction, which is done by adding all your commission checks together for a predetermined time frame and dividing by the number of actual closed transactions. If you can determine the number of total hours you spend on a transaction, you can also determine your “hourly rate” for each transaction.
Once you have your income numbers established you will need to research your prospecting activities…which activities are producing quality leads and which ones are not? How many of each individual activity must you perform to produce 1 qualified lead? Example: If you make 50 calls to your Book of Business, what would be the results? How many referrals would it produce? The same with your other prospecting activities…discover your Rate of Return (ROI) for each type of prospecting you do.
Once you have establish a ROI on your prospecting methods you can begin to do the math to determine the number of closed transactions, activities, and hours required to reach your income goal. (If you have troubles… call me… I can assist you).
With this INTEL in hand you now have your business SA and LGA. Knowing your numbers will help you to stay on track to reach your goals!
Eddie Brown ©2013