|by GRI Instructor Michael Soon Lee, MBA, CSP, CRS, GRI |
Author: "111 Ways to Justify Your Commission" and "Black Belt Negotiating"
If you want to have a successful 2010 it's time to start planning NOW! Leave your fate up to the whims of the market and you're more likely than not to miss your goal.
In a nutshell, here are the steps to planning for a successful new year:
1. Decide how much income you want to make in 2010. Don't forget to include taxes in your earnings projection. As a self-employed worker your income tax bracket is likely to be 50% or higher so check with your tax accountant. In a 50% tax bracket you must gross $180,000 to have $90,000 to spend after taxes.
2. Look at your goal and decide if it's realistic. While it's perfectly fine to be optimistic, if you set $180,000 as your target and you've never made half that it might not be realistic.
3. Calculate the average net commission you are paid from a real estate transaction after deducting your broker's fee and other expenses.
4. Divide your earnings goal by your average net commission which determines how many transactions you must do in 2010. For example, if you want to earn $180,000 and net $6,000 per transaction you must do 30 transactions next year. At this point you may want to reevaluate how realistic you goal is because if you've never even closed 20 deals in a year you may need to scale back your target.
5. Divide the number of transactions for 2010 by 12 to get the number of transactions you must close per month. In the above example you must close 2.5 transactions a month to reach your goal.
6. Put together a marketing plan with your office manager that brings you enough buyers and listings to reach your per-month transaction target. So if half of the clients you work with actually end-up buying or selling a home through you it will take 5 clients a month to hit your target income.
7. Monitor your success rate on a monthly basis and adjust as necessary.
In my next blog I'll explain why most business goals fail...