Posts Taged business-building

THREE AREAS OF YOUR BUSINESS

Any successful businessperson, over a span of years, has embraced the focus to build three areas of their business simultaneously. These three areas are the growth areas, working “in” the business, and working “on” the business.

Growth

Growth is the engine that drives sales growth. It’s the part of the business that brings in the revenue of the business. The more time invested in growth daily, weekly, monthly, the greater the resulting income. The vast majority of Agents spend too little time in growth. Growth is the DIPA activities that I have talked about throughout my writings. Growth is the critical part of the business, without growth, a business will fail.

I know a lot of Agents who are highly skilled at growth, but poorly skilled in administration and business planning, who earn large amounts of money. I know very few Champion Agents who are not highly skilled at growth. You can have huge deficiencies in administration and even customer service (I don’t recommend it) but still win the income game through growth. You can’t be deficient in growth and win. Growth is the engine that powers the train; you must first pay attention to growth. Your prospecting should comprise 65% of the time you invest in growth daily. If you don’t prospect, the other growth areas won’t happen.

“In” the business

Working “in” the business is the administration or production supporting activities. These need to be done, but not at the expense of growth. The “in” area focuses on you being an employee working in your business doing functions any employee would do. Our goal through the segment of working “in” our business is producing results for our delighted clients. We are trying to turn clients into evangelists so they generate referrals.   Their transition to that level of customer satisfaction comes from working “in” the business. If you create good systems, processes, checklists, and have highly trained staff you can reduce the time you invest in this area.

“On” the business

This segment is the segments most Agents neglect until they want to retire and find out they have nothing to sell. In Michael Gerber’s book, The E-myth, he talks about the myth of an entrepreneur. He describes that most entrepreneurs have really bought a well paying job and don’t really own a business. Realtors® clearly fit into that category of entrepreneur. We also clearly fit into buying a well paying job.

When we work “on” our business, it really shapes our long-term success and growth from just running faster on the treadmill of your business and life. Your long-term financial wealth is contained in the working “on” your business segment. Your ability to earn a profit and increase the profit is key. Remember, sales is a margins game. The more time we invest to plan, read, strategize, evaluate, and implement new ideas, tactics, and strategies, the more we evaluate the market, our time, our numbers, and return an investment, the more ownership we gain. Becoming the owner of your real estate business only happens through diligent working “on” your business. Instead of being a highly compensated employee who pays the bills, why not become the one who orchestrates the growth of the company? Be the one who has something to sell when you want to transition or retire.

Working on your business is critical to helping you move to the next level of production, or to decrease time worked without reducing income, or finding where to cut expenses by 10%. Working on your business will help you create economies of scale in administration and new ways to produce growth and income in your business. You need one hour per day of working “on” the business. For every minute you plan, you will save ten minutes in implementation.

What do you think your business would look like in 90 days, or even six months, if you were to implement the below daily routine?

Growth:                  3 hours

Administration:   1 to 2 hours

Business:                1 hour

By following the review patterns or pausing at the end of a day, week, month, quarter, six months, and year, you automatically increase the “on” time in your business. Another technique would be to schedule a block of additional planning and execution time at the end of each week. Most of our clients have ninety minutes of planning time each week where they work to improve their business. If you work to employ these techniques, you will transform the results of your business in a few short months.

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BECOME THE EXPERT

Do you have the skills that will make you massively successful? Are you making the most of them? The people who are compensated the best in life are highly skilled and highly specialized. They perform few functions, but the ones they do are performed exceedingly well, and they are paid handsomely for performing them.

Let me share an example. When my father had open-heart surgery, he was blessed to have an excellent heart surgeon. That was exactly what this doctor did — heart surgery and only heart surgery. Of course, there were many other steps to the process, and the surgeon had a skilled team to handle those other steps. There was an anesthesiologist who put my father to sleep. There was another surgeon who retrieved a vein out of my father’s leg and prepared it for by-pass. There was another surgeon who opened the chest cavity and readied the heart. After all those functions were complete, the heart surgeon stepped in for his part. He completed his sections of the surgery and then left the rest of the team to complete the operation. What if we had the skills and the systems to run our businesses that way? What would our production look like if we did? How balanced would our lives be with this type of a business? It is truly an exciting thought.

If you had that level of sales skills and consultation skills and had a strong team that would enable you to operate your business on that system, you would be paid better than that heart surgeon is paid. You have a bigger market to sell your services in than a heart surgeon has; there are more people who truly need your services than there are who need heart surgery. The question is whether you are truly taking advantage of that market and preparing yourself to be a leader in it. Strong, specialized skills and a team with the skills to support your work will free your time, so you can serve an increasing share of the market and enjoy a healthy personal life, as well. Imagine the life and the business you would have if you operated in this fashion.

What is your area of specialty in real estate? Where do your strongest skills lie? We all have exceptional skills in specific areas. When we know what they are, and are able to focus our efforts to make the best use of them, our clients benefit, and so do we. Specialization is very much a fact of life in the world around us. We see it more and more, not only in medicine, but in law, accounting, insurance, and even sports.

Let me share another example. When the NFL was first formed, players played both offense and defense. But, within a few years, we had players playing only offense or only defense. Starting in the 90’s, we had specialists: designated pass rushers; nickel backs; pass-catching running backs; blocking running backs. Each NFL team may have twenty guys, each of whom is on the team for only one function. They are specialists in the career of professional football.

To create a specialized, team-enhanced real estate business, you must first evaluate what you are skilled at doing, what you enjoy doing, and what needs to be done regardless of your specific skills and interests. Separate out those activities that you really dislike and those you are less skilled at doing. Then construct a plan that will, over time, remove those activities and delegate them to skilled and enthusiastic staff members.

For example, maybe you like meeting with clients but really don’t enjoy the escrow process. Solidify your escrow processing system, so a staff member can take it over, freeing you up to do the activities that you do enjoy. Or maybe you have a high level of skill in qualifying the buyer but don’t feel highly skilled at showing property. Set appointments in the office to qualify the buyers, but have someone else show property to them. The possibilities are endless.

Life is truly too short; each of us has only a limited time to enjoy life’s treasures. Why not make the most of your time by creating a business that is structured around your skills and your desires? Then hire, train, and coach a team of specialists who will complement your skills and help you achieve success. I truly believe that everyone involved — your clients, your staff, your family, and you — will win. With a system in place that makes the most of your abilities and of your staff, you’ll be able to achieve success faster than you can say: “Pass the scalpel, please.”

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REFERRAL TRUTHS AND CONSEQUENCES

Salespeople love referrals. They’re the sincerest form of compliment and a remarkably cost-effective route to new business.

The idea of attracting referrals is so popular that sales trainers who bill themselves as referral gurus make fortunes promoting magical systems that supposedly deliver more referrals than an agent can handle, all in return for tuition at a three-day seminar. What they talk about for three days is a mystery to me. Referrals are really pretty simple stuff. A lot of it you can only acquire through perfect practice of your scripts, over and over, of referral-generating and referral-cultivation tactics.

Before you turn even a moment of effort away from prospecting activities and before you put all your hopes into winning business through a full-tilt referral-generation program, be aware that in addition to all the benefits that come with referrals, a 100% referral-based business has some downsides. Proceed with awareness of these ironclad truths:

  • Truth #1: Especially for newer agents, over-reliance on referrals results in slow-growth simply because early in an agent’s career there isn’t a large enough database of existing clients and contacts to draw upon.
  • Truth #2: Relying entirely on referrals for client development is a narrow, exclusive, unbalanced approach. For one thing, if incoming referrals decline you won’t have other prospecting systems in place to bail your business out of trouble. What’s more, when referrals do come in, most will be for buyer prospects rather than seller prospects. What the referral gurus never say is that their approach develops buyers’ agents – when sellers’ agents are the ones who experience greatest success and build the strongest long-term real estate sales businesses.

A referral-based business is a business that generates most of its leads as a result of contacts provided by friends, family, clients, colleagues, and other associates. Sounds great, doesn’t it? It is great, if – and here’s a big if – you have a large sphere of influence and enough patience to wait out a lag time of at least 90 days, and most of the time longer, between when you begin to cultivate referrals and when referrals begin to generate revenue for your business.

Building a referral-based clientele is a long-term strategy rather than a quick-fix tactic. If you’re looking for near-term results (and what newer agent isn’t?) you’re better off developing clients through a traditional lead-development program that involves prospecting, conversion of expired and FSBO listings, and open houses.

Relying exclusively on referrals, especially when you’re a new and undercapitalized agent, is a quick form of business suicide that will move you out of the real estate industry within a year, guaranteed. Instead, consider referrals a second-stage strategy – one that follows your initial round of business development ­and contributes to the long-term growth and health of your business.

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GAINING OBJECTIVITY THROUGH COACHING

Our job as the CEO of our own multi-million dollar sales business is objective evaluation. Can we objectively evaluate our business and our personal performance? Are you capable of seeing reality as it is, not how you wish it to be? Can you pull back the camera like in the movies and see the whole battlefield like a general, rather than just this one soldier that you are waging war against in front of you? The soldier represents one big problem in your face. Do you have the ability to adjust your game plan and execution as a player without periodical time outs and direction from a coach who sees the whole playing field?

Coaching is one of the fastest growing industries in the world. The real estate industry is inundated with coaches, and many Champion Agents have used the services of a coach to get there. One of the valuable benefits of a coach is objectivity. It’s their experience of a personal track record of success. You might now, or in the future, be considering a coach. I would like to share with you a few areas to think about before you make a large investment, so you select the right coach or mentor for you.

I am a firm believer in coaching; which should be obvious because I founded Real Estate Champions as a coaching company in 1998 . . . years before coaching was en vogue. I founded Real Estate Champions to impact people’s lives through coaching. The speaking, audio training, books, and webinars were never part of the original vision. There is a difference between a coaching company that is built on the framework of coaching and a speaker or trainer who saw coaching as another revenue opportunity.

In personal improvement, there are three options for growth. There is education, training, and coaching. All three of these serve a valuable purpose in one’s continuum to achieve the Champion Agent level.

Education is fundamentally the acquiring of knowledge. It’s what you are doing by reading this article. It’s what you do when you attend a seminar or listen to audio training. Education plays a vital role in our success. Most of us spend at least twelve years in school educating ourselves to achieve a high school diploma.   The challenge with education is once you know it, what do you do with it? It’s still up to you to use the education. To create the strategy and tactics to implement yourself and hold yourself to a high enough personal standard to do what you know you need to do. To know and not to do is not to know.

Training is different from education. We are raising our skill level to a specified area of our business or life. We recognize a deficiency, and we receive training to improve our deficiency. It’s more action oriented and practice oriented than education. Most training happens live in real time. It’s where you learn the skill and the practice of the skill. Again, the use of the skill is up to you.

Coaching is personal process of performance improvement. Effective coaching analyzes who you are, where you are going, your skills, your business, your goals, your values, and your envisioned future and connects that with a plan and skill development in a customized format of execution and accountability to raise the odds of your success dramatically.

There are a lot of people “coaching” who are merely providing education and training with the outside wrapper of coaching because of the raised public awareness for coaching. I guarantee if you select a coach that operates this way, you will be disappointed. This happens most frequently through companies that transition into coaching from the speaker or training medium. They take training material, spin it, and call it coaching.

Coaching for peak performers has been around for years. The most successful athletes, for many decades, have been coached to win the big event. Tiger Woods would not be the golfer he is without his golf coaches. In fact, Tiger did not have a coach during a period when he didn’t win a major championship for over twenty-four months. Once he started to work with a coach again, he won a major championship within six months. The only difference was the coach. Michael Jordan, John Elway, and Michael Johnson all had coaches. Leaders in the business world, with some of the most successful companies, have coaches. Behind each great milestone, or accomplishment, stands two people – the one who executes the task or carries out the game plan and the one who helps create the game plan and teaches and coaches his goals and objectives. Maybe it is time to evaluate and consider the benefits of a coach.

A good coach has five basic traits. When these traits are used to help you move forward in your life, the results are amazing. A coach can help you increase your production and enjoyment in life and help you craft a life of long-term success.

The first trait of a great coach is the ability to listen and help you clarify your goals and vision in all areas of your life. Earl Nightingale, the famous speaker, stated, “We are goal-seeking organisms.” Our purpose is to set and achieve goals in life. The difficulty for people is not in achieving their goals but setting them in the first place. We can truly accomplish anything in life provided we truly decide to do it.

The second trait of a successful coach is guiding you to understand that all goals must have deadlines. Deadlines get one’s juices and thoughts flowing to create the desired result. Have you ever planned to go away for a vacation, and two days before you are to go, you get a flurry of activity in your business? It is because of the deadline that the activity increases and things begin to happen. How would you like to have that kind of production ongoing? Determine effective deadlines for all areas of your business.

A Champion coach will take the goals and vision you set for yourself and teach you to achieve them. He will help you create the step-by-step game plan to achieve the envisioned future. Even the big projects that seem like mountains can be broken down into bite size pieces – a coach has the objectivity to help.

For example, I had a client in 1998 who wanted to earn over $250,000 for the year, when the year before he had only earned $130,000. We worked diligently to break what he needed to accomplish in order to achieve his goal down into bite-size pieces. Once the bite-size pieces were determined, we were able to determine the daily disciplines for him to undertake. Because he had to just focus on his daily disciplines, the task was not paralyzing. When he got behind in achieving his goal, it was always caused by him not doing his daily disciplines. As his coach, I helped him create the game plan and targeted him to execute it daily. He achieved and broke his goal by earning over $265,000 for 1998, which was over a 100% increase in his business. Coaching really works in real estate sales, as in other fields.

A Champion coach will show clients the consequences of not following through on their goals and commitments. The coach will provide ongoing motivation and inspiration during the storms of life. The storms of life will come. We will experience all the storms in this world. We cannot avoid them. Since we cannot avoid them, we must prepare for them. It is not the storm that causes the problem; it is how we react to the storm. A Champion coach will help you brace for the storm that otherwise might overwhelm you. Coaching provides the motivation and inspiration for our lives to overcome those storms.

Lastly, a Champion coach provides accountability and is available for you. A Champion coach will help you evaluate your progress against your goals and vision. He will hold you to the standard that you have set for yourself.

 Many agents today are working longer hours to keep on the treadmill of life. They are delaying (or scrapping) long-range focus in the marketing and prospecting business system arenas. They often are neglecting their time investments for their health, families, and self-development areas of their life. They are spending a tremendous amount of time working on their business. They are truly an employee of their real estate business, rather than the owner, CEO, and visionary of their multi-million dollar sales company. To be an owner means you can walk away for a vacation with your family, and the business continues to turn out your product. Your business continues to earn an income for you while you are lying on the beach. Is the huge price being paid worth the results? Can one grow with balance?

We live in a time when there is an abundance of information. We can attend seminars, listen to CDs, and read books. We have more resources for growth than any other time in history. There is one crucial barrier to utilization of the knowledge you have even now. It is action or an implementation strategy. It is someone to hold you accountable for the implementation of the new idea or development of the new skill needed. It is the guidance for creation of the new streamlined system.

A coach has one other important focus. Coach, Tom Landry, put it best, “A coach is someone who tells you what you don’t want to hear and has you see what you don’t want to see, so you can be who you have always known you can be.” A Champion coach will shrink the gap between where you are and the true potential that is inside you. If you are not achieving your full potential, you are a prime candidate for coaching. To be successful, a coach must be passionate about your success in life.

If you have a strong desire to improve your income & quality of life, I urge you to take the first step and get a free coaching consultation to see if it’s the right fit for you: www.RealEstateChampions.com/realestatecoaching

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INCREASING YOUR SLICE OF THE MARKET

There is nothing that attracts business more easily than dominant market share. When you have increased your slice of the pie to the point that it dwarfs your competition, the prospects begin to seek you out.

I coach an agent on the east coast who, in the two towns she dominates, single handedly sells more homes than the number two and number three companies in sales and unit volume. One year she listed and sold 66 properties in her market areas, over which time the top competing companies together sold 59. And the balance just keeps tipping in her favor, because success breeds success and nothing indicates success better than dominant market share.

What is market share? Market share is the percentage of sales that you control in your marketplace. Market share can be based on listings taken, listings sold, buyer sales, sales volume, or sales by units. In any case, your share reflects the portion of total market activity that is represented by you or your company.

To calculate your market share, simply divide your or your company’s production against the overall production of your marketplace. For example, if 575 homes sold last year in your market area, and if your company sold 215 of those 575, then your company handled 37% of all transactions and controls 37% of the market activity (215 ÷ 575 = .37).

Also, calculate market share in various market segments. You might find that your overall market share is low but that you have a commanding market share in a certain neighborhood or price category.

Market penetration is another way to describe market share. If you command large share of your market, you’ve achieved significant market penetration. If your market share is minimal, your penetration is minimal as well.

A single agent can’t expect to penetrate a broad market overnight, if ever. For years, I worked the east side of Portland, Oregon – a geographic area that was home to 750,000 people. Even as productive as I was, with 150 home sales a year, my market share when compared to the size of the marketplace was miniscule. I barely scratched the market surface, let alone penetrate it. But within the market niche I’d carved, I was a dominant force.

A niche is a segment of the overall market. Niche marketers serve a select group of consumers whose interests and needs are distinctly different from the needs of the market in general. Think of niche marketers as big fish in small ponds.

You can create a market niche by serving consumers in a particular geographic area, consumers seeking a certain property type, a certain type of buyer or seller, a certain income category, the list is goes on and on. You can create a niche by focusing your efforts and increasing your penetration of FSBOs, Expireds, non-owner occupied properties, or small multiplexes.

The key to gaining penetration in a niche is focus. You have to decide which smaller section of the marketplace you want to work and quit trying to be all things to all people. Then, once you identify your niche, you need to create presence, penetration, and dominance, following these steps:

*  Make contact with prospects in your niche not just once but repeatedly over a compact period of time.

Studies show that it takes six impressions for a consumer simply to recognize or retain who you are. By increasing both the number and frequency of contacts with prospects, you can increase your market awareness, which is a first step in achieving market penetration.

*  Make personal contact. For most agents, the preferred method of contact with people located in a geographic segment is mail. They mail and mail and mail their prospects to death. They send refrigerator magnets, note pads featuring the agent’s name and face, local football, baseball, or basketball game schedules, annual calendars, and more. Guess what? That’s not enough to achieve market penetration.

A few years ago, I started working with a client named Sue who wanted to penetrate a large gated community where the turnover of homes was brisk and the sales prices were high. She’d given herself a tall order because another agent dominated the market and controlled more than a third of all the community’s real estate business. Luckily, though, the dominant agent had gotten lazy and reverted to easier contact approaches than face-to-face visits. Sue moved in with well-designed marketing pieces for use in mailing, but also with a well-crafted personal contact strategy. When all was said and done and her market share goal was met and exceeded, she determined that her success didn’t stem from marketing pieces that were better than the other agent’s pieces. Her success came from the fact that the people who lived in the gated community saw her frequently.

Whenever anyone in her firm listed a property in the community, she’d ask and receive permission from the listing agent to hold it open. Then, prior to the open house, she’d walk around the neighborhood personally inviting the neighbors. In between open houses, she provided the neighborhood with regular market updates. And on a constant basis she was personally very visible in the community, spending a few hours each week meeting and greeting her prospective clients.

When an expired listing came off the market, she showed up at the owners’ front door. When a FSBO sign appeared in a front yard, she was there, as well. In fewer than 20 months she went from a single-digit market share to a share of over 30%. Meanwhile, the once-dominant agent went from 37% to less than 20%. She had been beaten by the effectiveness of personal contact.

How to achieve market dominance

To become a dominant market force, you need to take market share from someone else. Dominance involves growing your percentage of the overall marketplace until you control a greater share of market business than any competitor. In some markets, which are shared by a great number of competitors, a 10% share might be dominant. In other situations, where fewer competitors exist, you might need 30% or even a higher share in order to be the dominant player.

To gain market share and dominance, first you need to gain recognition, which results almost automatically from simply doing more than you are expected to do:

*  Do more personal prospecting.

*  Create more useable market and industry information.

*  Have more communication with your clients.

*  Do more for your community, by sponsoring picnics, baseball or soccer teams, or community events as a few examples.

Doing more than is expected will earn you recognition and create a buzz about how you are different. Your reputation will be enhanced. Suddenly, rather than being an unknown agent you’ll be a “name,” a known entity.

Then, with the confidence you build through your awareness-development efforts go one step further. Dare to do things that no one else is willing to do.

 Sue, my client in the preceding anecdote, was willing to take the risk of rejection by calling on people and meeting then face-to-face. Her competitor, even though she was the market’s dominant force at the time, was unwilling to subject herself to the potential rejection. Of all the approaches I’ve seen, I believe that establishing more personal contact is the easiest, most cost-effective way to move to a position of dominance in a real estate market.

By taking each of the preceding steps – choosing a market segment, establishing contact, gaining awareness, establishing personal rapport, going beyond the expected, and daring to be different in your communication approaches – over a period of 18-24 months, you will penetrate your target market niche and be well on your way to achieving market dominance.

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BUILDING A CHAMPION BUSINESS BY PAUSING

Being able to build a Champion’s Business takes focus, skill, and determination. It takes the desire to move, change, test, adjust, and then change again. One of the ingredients that most Agents fail to execute is the ability to regularly pause. The ability to pause, evaluate, ponder, meditate, and clarify at regular intervals will move you from a good business to a Champion Business. The pause helps you learn and invest what you have learned into your future success account.

Pause at the end of each day to reflect on what went right. If you had to rate the day one to ten, how would it rate? Why did you rate it there? What could have been improved on? What are you most proud of for the day? What are the priorities for tomorrow? I typically spend thirty minutes at the end of the day reviewing the day and learning from the day. Too often, we continue on daily without pausing, pondering, and evaluating, so we make the same or similar mistakes repeatedly over time . . . warning!!

At the end of the week, take an hour to pause. A week is a pretty good chronicle of time that has gone by. Evaluate the prospecting numbers, leads generated, and appointments booked. What did you learn this week?   What would you change? How should next week be approached? What priorities didn’t get accomplished that need to be moved to next week? How’s your energy level and reserve? How’s your attitude at the end of the week? If you have staff, evaluate their performance as well.

Pause at the end of the month for two hours. Invest those two hours in your future wealth, growth, and happiness. Besides the previous questions for the day and the week evaluation, review your leads in your database. Did you miss calling anyone? Is there someone you should call earlier than scheduled? Too often, Agents call someone they have as a lead just after they have made a decision to commit to someone else, or they have bought and sold using someone else. By taking a few minutes to review the leads monthly, you will catch oversight that will cost you thousands. Even today, I review leads in our database quarterly and always catch opportunities about to be lost. My sales manager at Real Estate Champions is required to review calls and leads weekly and monthly.

At the end of the month review your prospecting leads, appointments, and overall numbers for your business. You also want to review the numbers on your market trends report. We must already know where the marketplace is heading in real time, rather than reaction time.

The break at the end of the quarter should be a half day to give you the opportunity to repeat all the steps I have given you thus far on a large, deeper, more focused time frame. When you get to the quarter evaluation, I really believe that it needs to be conducted off site. This time is of paramount importance and needs your full attention without the distractions of being in your office. If you feel you need to be in the office because of the availability of your data to analyze, then come in 4 hours before your normal day would begin, or stay in the evening and evaluate. Again, evaluating the marketplace for the quarter is an integral part of the quarter pause.

The pause at six months should be around a full day. Six months is a significant amount of time. I know Agents who have been way behind initially, but caught up to their goal in the last six months through making the right adjustments. I know others who were way ahead of their goal, but they didn’t take the time to review and weren’t paying attention. They missed the mark on their one-year objectives.

The pause at the end of the year should be from three days to a week. I personally prefer a week. The final week of the year has developed into my favorite week of the year. It is the time I hit the rewind button for the whole year and replay the tape.   I immerse myself in questions and evaluation to guarantee the mistakes remain in the past and the victories flow into the future. I check my business plan, business vision, and values, systems, lead generation source, and conversion. I check my mental state and commitment level to my goals for the next year. This week isn’t to build a business plan for the next year. In fact, if you are doing that in this week, you are too late. Your business plan for the new year needs to be constructed no later than the end of October of the preceding year. To decide a week before the new year to build your business plan is too late.

Take the above steps to execute pausing at regular intervals into your business. You will see how this exercise helps you move your business from a good business to a Champion’s Business.

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