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Welcome to the New Year! Will your company treat this as a "new year" or by default, a continuation of the last? This may not seem too bad if you have been in a good market and it looks like it will continue. However, this course of action rarely contributes anything to the actual building of the company and in some cases will create patterns of business that will actually be detrimental if not carried by a good market. Good markets are probably the greatest challenge to strategic thinking for an entrepreneur. The basic survival instincts that often build the foundation business supporting the infrastructure and actual profit picture tend to be less critical. There is also a tendency to let the business "roll’ rather than being a planned result. Putting your Plan to Work If you failed to plan for this year, it is time to get started. Consider the following questions as you put your plan in place.
(A template for real estate company business planning may be found at www.soltys.com/resource.htm.) Is it possible? A well-written plan will be of little use if it does not apply to your business. Consider commission volume, do you have the number and type of agents needed? If your commission fee policy has allows significant negotiation, your numbers may have to be stratified by the number of sides you anticipate not only by price but also price point charged on commissions. Can you capture the market share necessary for the plan with the resources you have or can realistically attain? Core Profit Areas This may be one of the most overlooked areas in real estate company business planning as few companies could exist and make a profit solely on residential commissions. Every activity of the company must be examined to determine its ability to produce or contribute to profit. Profit areas are not only businesses such as property management, relocation and development but also need to be thought of in terms of the agents and agent groups that make up the company. Not to be forgotten are the issues that must be addressed such as compensation plans, carry of internal accounts, and cost of marketing and operations. Empowerment The performance of a business is heavily influenced by empowerment. Helping each person in the company whether a producer or a part of the support team to see their role, the path of achievement and rewards can be critical. This is a part of leadership and a reason that people join companies rather than all work independently. Do the facilities work for you or against you and why? What can be done within the plan and is it a good business decision when the cost and benefits are weighed? The empowered company utilizes leadership through every person not just management to gain results that surpass expectations. Is the infrastructure in place to support and guide individual leadership? The market place will impact many companies in unusual ways over the next couple of years. There are many cases in which there has been a significant change in buying and selling patterns that will directly impact future available dollars and sides. A primary factor is that the population of prospects did not increase as fast as the time line for taking initiative. Tools and the systems that tie everything together will need significant examination. The challenge of automating and upgrading does bear an up-front cost but can produce significant long term results and in many cases may be motivated by Y2k issues. Accountability What gets measured gets done. Make sure that the plan includes periodic measurement points. There are key performance indicators (KPI’s) that can impact critical in plan decisions. Who does the measuring, by what standards, and how will corrections be implemented? Visualize, Celebrate and Communicate If you and others in the company can not "see" the achievement of the plan, it probably will not be attained and there will be little passion behind the effort. It is your job to ensure that everyone, beginning with you can and wants to "sing the company song." As the crescendo raises, make it a point to catch people doing things right and celebrate all achievements. Great markets, strategically attacked always positively impact companies over the long term. Working in a default pattern is usually costly in both the long and short term with fewer tangible rewards. |
