Real estate is a business of people. But how you find these people, how you stay connected, how long it takes you to convert and close a client, and all your expenses associated with running your business can be measured by numbers. Numbers make it easy for you to measure how you are doing in your business and can help you determine how, or if, your business is growing.
Before you start thinking about things to add into your business in 2017, start by looking at—and measuring—what you are already doing. Here are some places to start:
1. The number of people you connect with monthly in your database.
Do you know exactly how many people who are past clients and contacts are out there ready, willing, and able to do business with you or give you referrals so long as you stay in contact with them? This is a number you should track to make sure it is growing each and every year. That is how one builds a coveted referral-based business. But if you haven’t built awareness around how this asset grows—or you don’t utilize it by actually keeping in contact with your database, then chances are you won’t realize its full potential.
If you connected with and added one person per week to your database in 2017 and then kept in touch monthly, you would have expanded your reach by more than 50 people. Do you think that you might get business from a few of those people? Strategic, steady, and measurable growth here will serve you very well in the years to come.
2. Your lead generation efforts
In order to generate leads in your business, you either need to invest your time or money. Both can be measured.
For example, if you are mailing to a geographical farm, how many people are in that database? On average, how many transactions do you get from your farm per year? If you focus on open houses, how many invitations do you send out? How many people do you generally get at your opens? How many hours does it take you to put on an open house, all told? On average, how much potential business does this translate to?
Imagine you began tracking the amount of time and money it took you to prepare for and hold an open house. You found that it took you, on average, five hours and $250 between entering the open house time in the MLS, creating and mailing an invitation to 150 people, creating all the support documentation for the home and area, preparing the home, setting up your materials, holding the home open, and then taking down your materials. Say you got, on average, one new potential buyer from that open house. Would you feel good about those results or would you take another look at your process? This is why measuring is so important!
3. Time spent on your clients
After you have been working with a client for a long time and through a difficult transaction, it feels great to be presented with that commission check. But not so fast. It looks like a large amount, but now subtract your expenses for that transaction. Now take the number of hours you spent and determine your fee per hour. Is your per hour rate $15 an hour? $30? $50 or more? And remember, that doesn’t include the number of additional hours spent on your business that do not pertain to a specific client (such as lead generation, database follow-up, filing and organization, etc). Are you making an hourly rate that you are happy with? Are you happy with the average amount of time it takes to work with a buyer from the beginning until closing? How about the time and money spent per listing?
4. Your social media reach
Do you know how many Facebook friends, likes on your profile page, Twitter followers, and LinkedIn Connections you have? If building relationships online is part of your lead generation strategy, you should be tracking these each month and have a plan for both deepening relationships and broadening your reach. Furthermore, if you are running ads, what is your strategy in doing so? Is it to get more likes on your page? How many? How much does each new like cost you?
5. Your expenses
If you work with an accountant or a bookkeeper, do they give you an expense report each month? Are the expense categories relevant to your business?
We have found that bookkeepers and accountants more or less follow the expense categories that are found on the tax forms. But wouldn’t you like to have a separate category for listing expenses? What about for your lead generation campaigns? Wouldn’t it be helpful to break your auto expense category into smaller categories for gas, repairs, and insurance (if you track your auto expenses that way)? You can work with your accountant/bookkeeper to categorize your expenses in a way that makes sense for you and how you want to track your business.
2016 was a busy year for many brokers in Washington State. Before you ramp up in 2017, take some time to determine at least three things you want to start measuring and tracking in your business. As you go through the year and begin to notice trends, then you can really dive in, evaluate what needs to be improved, and make those changes.
Remember, you can always set goals for yourself along with the measuring you are doing. For example, if you determine it is taking you an average of 75 hours to work with a buyer from your initial meeting until closing, but you think you can get that down to 70 hours with some changes in your prequalification process and making your communication more-efficient, then you will become aware of every minute that ticks by and work harder to find and save those 300 minutes.
Don’t be afraid to measure the things that are quantifiable in your business in 2017 and make a resolution to improve before you add!
About the Author:
The founding partner of The Lones Group, Denise Lones, brings over two decades of experience in the real estate industry with expertise in strategic marketing, business analysis, branding, new home project planning, product development, and agent/broker training. Denise can be reached at The Lones Group: 360-527-8904 or online at www.TheLonesGroup.com.