IS IT THAT TIME OF YEAR … UGH … BUSINESS PLANNING …

So a group of realtors got together last week at Keller Williams Coastal Properties for a business development meeting.  Afterwards, the group gathered informally over pizza and wine to discuss other business related matters.  A friend asked each of us their production numbers to date for 2009; and if we had started developing our business plans for 2010.  One by one each person (with one exception) admitted that they had not started their 2010 planning.  Reluctantly I was one of those who acknowledged not having put any thought into next year’s business plan.  Ugh I shutter at the thought!!

The following day I was retelling the story to another peer who is putting together a budget for Keller Williams Coastal Properties for 2010.  I asked how she was going to do that without any input from the realtors regarding numbers and goals.  That got me thinking as to the real value of these budgets, business plans and goal setting exercises.  Logically I would think that a business would gather information from its sales and marketing arm, discount the projected sales numbers, and then develop the budget for the next year accordingly.  Yes, but that is when you run straight into the problems with the brokerage business model … the sales team consist of all independent contractors who typically don’t bother projecting sales goals or writing annual business plans (save those few or those in coaching; but even then it might just be a meaningless activity or another ‘homework assignment’).  So is there any value in these budgets and business plans?  Or are we just putting numbers together that makes us feel good or so we have completed a task that others say is important?  Is there a real value; and if so what is that value?  I wonder how many people after writing their business plans for the next year actually go back and read the plans on a regular basis (daily, weekly, monthly)?

How about you … have you written your 2010 business plan yet?  If not, are you resisting writing your plan?  Why?  You might even be asking yourself why do I even need to write a business plan every year?

Intellectually I understand that without a plan of action I basically have no ‘blue print’ for success in my business.  Beyond the notion of a blue print though the exercise of writing my business plan forces me to evaluate the market, identify my resources, determine my budget, and prioritize my efforts so that I don’t waiver with every shift in the winds.  If I truly go through the exercise, I can see the value of the plan given how this business (real estate) moves from one strategy to another depending upon what other people say is a trend.  So after some thought I am committing to write my plan over the next thirty days.  But saying I’m going to write my plan, albeit a good decision, involves me first identifying my resistance.  Part of my why?

So why do I resist writing my plan?  Well there are several reasons.  First, I resist structure on several levels.  I generally give considerable thought to where I’m headed and the implementation strategy to get to my goals.  However, when I write down my production goals it gives me this instant accountability barometer with little or no wiggle room.  Many people gravitate towards building accountability into their daily routine; however, I feel a sense of being trapped.  Finally, in the past when I have written my business plan I never seem to read it again (after its finalization) – therefore it takes on this air of being a senseless exercise.  In many ways it probably is why I never set New Years resolutions.  I almost take this attitude that writing a business plan is analogous to completing a ‘homework assignment’.  When I finish, then I’m done.  Well that thought process misses the mark – the business plan should be my individual road map that is a living and breathing document.  And, I should take it upon myself to review my plan daily, or at least weekly; and track my numbers each month.  Furthermore, I should make it a habit to revise my business plan every quarter – at that time I will need to re-access the market, my production and my plan accordingly. 

Okay, I have admitted the reasons for my resistance … furthermore, I will admit that my resistance really does amount to being total garbage!  So here I am exposing one of my achilles heels (one of many).  So now what?

Well I have three different, but similar, realtor business plan templates.  So that takes the mystery and mundane issues of development off the table.  And yes, I do understand the process for realtors beginning with the numbers – look at last year’s numbers and understand them.  Then begin with how much money one wants to make next year (GCI [‘gross commission income’] or in other business parlance gross income), and work backwards to determine how many transactions it will take to earn the GCI numbers.  Once you have the total number of transactions, then determine how many of each type of transactions (listings and buyers); how many days I plan on working; how many listings; the number of listing appointments it will take to close the number of listings required to reach your numbers; and finally how many calls it will take each day to reach my goals.  This process is fairly easy to understand; but really what does that get you … it seems like an analytical justification of how much money you want to make over the next year (oftentimes not based upon any reality but your own mental wish list).  So really what is the value in that exercise … well the heavy lifting is not in the numbers … but what the numbers suggest in combination to some additional factors.  Factors that few coaches and advisors really focus on (they give it little if any consideration when evaluating the plan).  Previous coaches spent all their time in the production numbers giving no consideration to the market trends, resources and business models. 

What would a few of these other factors be?  Whether you are in real estate or another business these factors are relevant.  Such factors as:

·      What is your business model?

·      What is the current market doing?

·      What are the market drivers for each micro-market you are selling into?

·      Where is each market headed over the next year for the services you are providing?

·      What are the agents of change that will cause each micro-market to expand or contract? 

·      What are the agents of change inherent in your business plan itself?

·      What resources do you need to be successful given each micro-market?

·      Evaluate the costs, market potential and whether these individual micro-markets or strategies fit your skill sets, your business model, goals and long-term business vision?

So going through the mere exercise of putting production numbers down (i.e., revenue, costs and number of transactions) may be of little value taken by its self.  But the process of developing the road map and understanding the playing field is the critical path that creates and sustains a world-class business.  So as John Wooden once said “failure to prepare is preparing to fail” is sage and timeless advice for all of us – even for me as reluctant as I am at times.

I hope you enjoyed the reflection, and take the time to consider how these questions may present opportunities for you today and in 2010.  Most importantly, I hope you make it a GREAT day and week!!  If you wish to read all the other Monday Morning Mojos written for you, then visit: http://mondaymojo.blogspot.com.  As always, I welcome and encourage your feedback and your reflections (please don’t hesitate to share your thoughts with me).  If I can be of service to you or your friends, please let me know or visit us at http://www.coastalcommunityhomes.com.  And, thank you for your continued support and inspiration … each of you are a cherished gift that enriches my life in ways you will never understand … Thank you!!  Jim Peys