Getting a Jump on 2006
Are you a Goal-Setter or Planner?

By Allen Wright

            With the fall season approaching, many of us in the industry are looking to the New Year with a renewed interest in doing better.  In the corporate environment, fall has always been about planning and positioning for the next year, but before jumping into authoring your 2006 business plan, ask yourself if you are a goal setter or a planner?  They are not the same.

            Anyone can set a goal, but goals offer no means towards accomplish.  Goal-setting is as arbitrary as making the statement, “I want to earn a million dollars!”  If you want to earn a “million dollars” you need a roadmap to define what you will need to do to achieve that goal.  Remember, a goal is no more than a desire if it is not accompanied by a statement of facts to achieve the stated goal. 

            For example, let’s say you have a goal to lose 40 pounds.  If all you do is set that goal you are in essence just “Wishing”.  So you take the next step and write down that goal and tape it to your bathroom mirror … you are still “Wishing” but on paper. Unquestionably you should be commended for at least putting your “Wish” in writing as that is one of the first steps towards realizing your “Wish”. You however need a basic plan for losing the weight - a plan that would at least involve looking at your diet, calculating how much less you need to consume, how much you needed to exercise, etc. to achieve your goal. 

            This is obviously a very basic plan but it should eventually get the job done.  If you are more serious, a more in-depth plan is called for. A plan that would examine how much time you have to lose the weight and exactly what your exercise routine should be. Better yet good planning would involve a specific change in diet with a daily list of consumption, an exercise routine allocated to meet your desired results and a way to track your progress to make the appropriate changes.  Now you have something worthy enough to be put on your bathroom mirror … a specific plan to achieve your desire goal of losing 40 pounds. 

            So simply stated … a plan is a calculated set of instructions to guide you toward a desired outcome. 

            Transferring that to real estate and it is easy to understand how a business plan is a necessary roadmap and an essential tool for success in real estate.  Add “ing” and you have “Business Planning” - the process required to formulate and make better business decisions.

            The absolute in any business planning development is calculations.  By starting with your “Wish List” – i.e. how much you wish to earn – the plan will help you examine the key aspects of generating positive income: Revenue, Expenses and Business Development. Revenue is not income.  Revenue is defined as gross earnings before expenses and taxes.  Do not confuse the two.  Higher income starts with generated revenue and in real estate that means more “Closed Transactions”. Expenses in turn are typically the number one reason agents leave the industry.  Most agents that work at real estate on a fulltime basis create sufficient revenue but struggle to control their expenses.  Therefore your plan must factor in all your administrative, marketing and transaction expenses – both fixed and variable. 

            A good Business Plan will take all these items into consideration and allow you to find the right balance between works best for you and best for your specific maker place. Using your business plan, you can now track activities, appointments and transactions and develop an effectiveness matrix. An effective matrix involves simply a plan of action with a list of what activities will generate you the most results.

            Business planning can of course be done on the back of a napkin or you can spend hours re-calculating your key numbers on a sheet of paper. The easiest and most professional way is to use the specially created real estate business planning solution offered by CreateAPlan.