RUN YOUR REAL ESTATE BUSINESS LIKE A BUSINESS

Can you tell me a little more about that?

Of course, the first thing that they’ve got to do is understand where they are spending their time. In most cases agents who are making a couple hundred thousand a year are spending all of their time right now doing the business they are doing. So, what they need to do first is figure out where they are spending their time and find out if they are productive and if they are getting a good re- turn on the time that they are spending.

The first step is to plot their daily activities. We have our agents record their activity for a week,
half-hour by half-hour.

Ken, in your experience, how many hours a day does an agent making half a
million dollars typically work?

Making a half a million? They work – what they would consider – 10 hours a day.

But the interesting thing is that when we do these time charts, we find out that really anywhere
from an hour to two hours a day is spent generating business.

Wow, so what do these agents spend the other 8 or 9 hours doing?

They get caught in the administrative duties, they get caught in trying to manage their team, trying
to grow their team – basically doing things other than bringing in more revenue.

For example, if they were having trouble with a deal, they would jump in and spend all of their time
trying to save the deal instead of letting their assistant handle it.

So, putting out fires?

Yes.

So the first thing is that they need to track their time and get a handle on their time management?

Yes – that is very critical. But it doesn’t stop there. Knowing where they are spending their time is only the first step. Next they need to create a plan that will allow them to spend 80% of their time creating revenue. This is part of a business plan.

If we are looking at a business plan, first of all we want to find out where their business is coming from now. In other words, in the last year, where has their business come from – is it mainly from referrals, is it from advertising, is it past clients? We then look at the number of transactions that they do. From there we formulate a new plan based on what they done previously and what they are doing now.

So you first look at their time in the office, then you look at their past business and create a business plan based on those numbers – what about goal setting? Where does that come in?

I consider goal setting a part of their business plan. Depending on the person and depending on how they are running their business right now, they can look to increase their business as part of their business planning process with us. We have had people double and triple their business in one year
– but the business world says that the average should be a 20% increase per year.

Now why are your agents doubling and tripling their businesses in a year when the industry norm is 20%?

We look at several areas when we are setting their business plan – instead of focusing on one partic- ular area. We look at how they can increase the transactions that they do and how they can test and increase their marketing response. We also have specialized coaches that help them do more busi- ness in certain areas that they weren’t able to do before. And, of course, most of them at this level have teams and we do an analysis of the team. We ask: Is everyone on their team working to their strengths? Is everyone involved in producing more revenue for the team?

The time tracking is a huge eye-opener for every top agent I have ever worked with. They are totally amazed at how little time they spend generating new revenue. An average of only 2 hours a day is spent generating revenue. They could negotiate a deal, return calls, follow up on leads, and talk to their past customers.

Talk to me a little about the basics of good goal setting. What is it you do that makes the goals you help your agents set so much more effective than other processes?

Well, I think that goal setting can be good and bad. Business people always talk about how your goals have to be realistic, specific, and measurable, which is true. But at the same time, what I find is that most people set goals within their comfort zones. And so, they never stretch themselves beyond their comfort zones. So if you want to make a million dollars, and you set your goal at only a million dollars…it is very difficult to hit that goal, because your mindset is always only at marking a million.