Transcription
All right, so listen. It's Thanksgiving week, so now is the time. We're probably actually a little bit too late, uh, in making this video for you. But in this video, I'm going to walk you through, literally step by step, the 2024 listing agent business plan. I'm going to share my screen, walk you through the template, and I'm going to go through every single piece of the business plan with you so that at the end of the video, you can have 100% crystal clarity on exactly what you have to do in 2024 to hit your goal.
Now, here's the thing. As long as you follow the blueprint that we're going to create right now in this video, as long as you follow the plan, I'm telling you, it is virtually impossible for you not to accomplish the goals that you have set. So let's jump into it.
So on screen right now, you're looking at the listing agent business plan template that I, uh, walk all of my coaching clients through. Now, here, here's the thing. As we build this out for you, if you, if you want support from a coaching perspective, or at least you want to have a conversation to look into coaching, now might be a great time. As we get closer to the end of the year, we can have a conversation if working together in 2024 makes sense or not. So if that, uh, is you and you want to have that conversation about having a coach help you to implement what we're about to do, I'll put a link in the description. You can schedule a consultation.
All right, so let's jump into this. The first thing that we're going to look at is the, the financial aspect of the business plan. Now, you might be looking at this saying, "Yeah, this looks simple and this looks easy." Let's just make sure that we're on the same page. All right, so I'm going to get my calculator just to make sure that we're, that we are indeed on the same page.
So the first thing we're going to look at is net income. Net income. What? Because I think a lot of times, what people, when they talk about, "Hey, how much money do you want to earn?" they're talking about gross income and not even knowing it. So I'm talking about after broker split, after expenses, after taxes, how much money do you want in your pocket? Net, bottom line, at the end of the day. So let's just pretend that that number for you is $100,000. Now, it could be whatever number you want. This is your goal, this is not mine. I'm just using an example. So I would have you follow along. All right, so you can just use a blank sheet of paper and follow this to a T.
Well, how we have to work this is we have to work the numbers backwards. So if our net income is $100,000 and let's just say our broker split is 30%, meaning we get a $10,000 check, we end up getting 7,000 of it. We have to add 30% on top of our net income if we're going to net 100. So if we're going to pay our broker, uh, 30%, we do the simple math. 30% of, of $100,000 is $30,000 in additional, what we're going to talk about GCI, in order for you to net your $100,000.
The next thing we're going to look at is expenses. Now, as a listing agent, we're going to build this business plan on an outbound prospecting model, which, which suggests that your expenses should be no more than 20% of your net income. No more. In this case, 20% of 100,000 is simply 20,000. Right? Really, really simple.
Taxes. Okay, depending if you, uh, if you're working with a CPA, hopefully your taxes should be anywhere between 20 and 30% of your income. So let's just air on the side of caution and, and let's account for 30% in taxes. So $30,000 is a nice, safe number if you're going to net 100.
Now, what we have to do is we have to figure out, okay, how much in GCI, gross commission income, do I need to earn in order for me to net 100,000? So all I have to do is take my net income goal, which in this case is 100,000, and all I have to do is add all these on top of it. Right? Really, really simple. So we've got 130, 150, $180,000 in GCI that we have to generate in order for us to hit our goal of $100,000. Right? So hopefully that makes sense. Easy enough, simple enough. We have to, because again, most people when they're talking about, "Hey, how much, what is your goal?" they're talking about this net number, and then they have to take expenses off, then they have to pay their broker, then they have to pay taxes, and then they wonder why they, they're not left with very much. Okay.
So this agent needs to generate about $180,000. Now, here's the thing. Before I move on to the next step in the business plan, what we, we, what we typically want to see, all right, is your, uh, gross margin. This is how we know if you have a healthy business or not. If you're paying too much, you've got too much expenses, uh, maybe your broker split is out of line. We want to see gross margin between 50 and 60%. So this agent, right, 100,000 divided by 100, uh, 100K divided by 180K, this agent has a 55% profit margin. Okay. Uh, and, and I said gross here, what I, what I meant to say here is profit margin. So let's go back. Let's put in profit, profit margin. This agent on this business plan has a 55% profit margin. So that, for a lot of you, might be an "aha!" to say, "Okay, yeah, I make about half of every commission check. That's normal." If you're, you're going out there and spending all of your, your money from a commission St, uh, commission check perspective, you're going to have tax issues, you're going to have financial issues. So I'm not going to get too much into the accounting of it. This is a simple snapshot.
Now, once we have the goal, and I'm just going to put this up here so we don't forget, the GCI goal is $180,000. We need to build the plan off of the GCI. We need, not the net number, right? Not the net number. So, so the first thing we've got to do in order to create this 12-month blueprint is we have to say, "Okay, how much is my average commission check when I sell a house? On average, how much do I get?" And in this case, let's just say that this agent, the commission check they get on average is 10K. $10,000 goes to the broker, broker takes their cut, you get, uh, your cut after the split. But let's just say the, the GCI is 10K.
The first thing we have to look at, what you're looking at on screen, is, uh, our conversion matrix. Okay? This is going to be really, really important. These are averages. You might have better, you might not be converting as well, but at least this will give you some clarity. This is an average conversion ratio that you can, that you can use. So the first thing that we need to figure out is how many closings. And if this agent has a $10,000 average commission, it's really, really simple, right? 180,000 divided by, uh, their 10,000, we need 18 closed transactions. Simple, easy.
The next thing that we're going to look at now is this conversion matrix. We need to look at how many listings do I need to take in order to sell 18 of them? How many listings do I need to take in order to sell a team? Well, based on the averages, right? I know some of you say, say, "Well, I, I sell every listing that I take." Use that number. You might say, "Well, I, I only sell about half." On average, we see this about 70%, especially with the agents that start selling 20, 30, 40, 50 houses. Yes, the agents that sell five houses and they're all friends and family, I would hope that you're selling all five. But once you start listing five a month or five a week, that number will probably change. But in this example, we're going to use 70%. So what I'm going to do, I'm going to take the 18 properties that we need to sell, I'm going to divide that by 70%, which leaves me with 25 listings that I actually need to take in order for me to close 18. Right? Hopefully that makes sense.
Now, the next thing we're going to do, we're going to keep working the numbers backwards. We need to say, "Okay, well, if I need to list 25 houses, I probably have to meet with some homeowners in order to list those properties." Again, I'm going to use an average and say, give you the benefit of the doubt to say you can convert 50% of the listing appointments you go on. So how many listing appointments? We say listing appointments met. How many of those do you need over the course of 2024 in order for you to get 25 of those people to list the property so that you can close 18? Well, 50%. The numbers are really simple. You need to go on 50 listing appointments in order to, uh, convert half, take 25. It's about two a month for you to close 18. All right, so far so good.
The next thing we're going to look at is how many appointments do I need to set in order to to have 50 mets? Not every listing appointment you set will come to fruition, right? Some will cancel on you, you may cancel on some of them. So we need listing appointments set. In this case, we're just using the average of 50% conversion, which means we need to set a 100 listing appointments over the next 12 months. You can already start to see, "Wow, this is really clear. Like, I can get past my emotions, the ups and downs. Like, this is just super clear. It's totally up to me to make this happen." Okay, cool. Let's keep going.
The next thing that we have to look at is how many leads? How many leads do you need in order to set 100 listing appointments? Now, here's what we know. The vast majority of your appointments are going to come out of lead follow-up, not lead generation. So we see about 20% of the leads you're following up with actually turn into an appointment set. So in this case, if you needed 100 appointments set, divided by a 20% conversion, you need to generate 500 leads. And we're doing all of this through outbound direct outbound prospecting. It's a high margin business. Okay, we'll talk about lead sources in just a second.
The next thing that we're going to look at is, well, how many people do I have to talk to in order to generate those leads? Well, how many conversations? Or contacts. It's a 10% conversion, meaning one out of, uh, 10 people you talk to should turn into a high-quality lead. In this case, if we need 500 leads, the math is simple. We need 5,000 contacts over the course of a year.
Now, before you faint, if you say, "Oh my gosh, it sounds like so many." We'll break this down. You'll see what this looks like on a monthly, weekly, daily basis in just a second. And then the last question we have to ask ourselves is, how many, uh, hours is this going to take? How much outbound prospecting braining will I have to do in order to speak with 5,000 human beings about selling their house next year? Well, we know that if you're focused and you're following all the best outbound prospecting tips and strategies that we share on this channel, you should be able to have seven conversations per hour. Right? So if we need 5,000 conversations, we divide that by seven. So we need prospecting hours. We need about 714 hours. Right? Because if we prospect for 714 hours times seven contacts, uh, per hour, that gives us our 5,000 conversations. So we need to actually work about 714 hours in order to make this thing happen, in order for us to, uh, for us to hit this goal.
Now, let me just pause for a second. Now you're, you're met with this, uh, this idea that maybe for the first time ever going through a business plan and building it the way that we're doing, you're, you're met with such clarity that it almost makes you nervous. Why do I say that? Well, let me show you. When we look at this number, 714 hours of outbound prospecting, that is 100% inside of your control. Everything else isn't. So you might say, "Well, these are all exciting." But the thing that is in control, uh, uh, inside of your control is how many, how much time you spend prospecting. And this is why I always tell you that success is a choice. You get to decide whether you do the 714 hours or not. And as long as you do the 714 hours, all the numbers should fall into place. Yes, there's some skill factor in there, yes, there's some past client center of influence in there, yes, there's some database stuff that happens in there, yes, there's some pipeline maturity stuff that happens in there. But for the most part, if you follow this blueprint, you can't help but hit your goal. The only challenge is, or the only question is, will you do the 714 hours of prospecting? Not, "Can I accomplish this goal?" 100%, you can do this. 100%, you can do this or more. I coach agents every day that do this or more. The question is, will, will you do that?
Okay, now let's break this down so you can see what this looks like. So let's break it down monthly. We know we need 714 hours for the year, but if we break that down, it's about 60 hours a month of actual work. So 60 hours. Or, uh, let's go to contacts. We know we need 5,000 contacts divided by 12, we need 416 contacts. We know we need 500 leads divided by 12, which means that we need about 40 leads per month. Appointment set, uh, I don't remember that off top of my head. So we need 100, 100 appointments set divided by 12. Look, we only need to set eight appointments a month for you to hit this goal. We only need to meet with four. We only need to take two. And we only need to about close about one property, one or two properties per month. Now you've got your monthly business plan. This is what you must do every month in order for you to stay on track with the goals that you've set. It's either, did you do it or did you not do it? It's super clear.
Let's look at it weekly. 60 hours divided by 5, you need, uh, I'm sorry, 60 hours divided by 4 weeks, you need about 15 hours a week of prospecting. Contacts, 416 divided by 4, you need about 100 contacts a week. 40, you need about 10 leads a week. Eight divided by 4 is what? Two appointments set. We need to only meet with one person a week. And you don't even need to take a listing a week because you only need two per month. So you need to take a listing every other week to stay on track.
Now, daily. 15 hours divided by, this is a five-day work, working schedule, by the way. No nights, no weekends. You'll only have to prospect for 3 hours a day. 3 hours of actual work in order for you to make $180,000 income. Not too bad, right? Not too bad. So 100 contacts divided by five, you need 20 contacts per day. You need two leads per day. And you don't even need to set an appointment or, or, or meet with somebody on a daily basis. Now, this is super inside of your control. This becomes, like I said before, a decision. Did you prospect for 3 hours today or did you not? That is up to you. Your success is fully in your hands, right? You can do that. You could decide to do that or decide not to do that. The choice is yours.
Now, let me just make some simple recommendations when it comes to your schedule. All right, so I'm not going to get too into the weeds of this right now, but I'm going to recommend that you, uh, role play from 7 a.m. to 7:30. I'm not going to talk about in this video what happens before 7 a.m. Um, maybe I'll make another video about that. I'm going to have you prospect from 8 until 11. We're going to go lead follow-up from 11 to 12. Lunch from 12:00 to 1. Then we're going to do admin. All those people that you say are distracting you on why you can't prospect, that's because you don't have any afternoon schedule, uh, mapped out for yourself, right? So if you have time allotted in your schedule, you don't have to take these distractions in the morning, and you can do what you're supposed to do, which is to prospect. Pro, uh, admin 1 to 3 every, every single day in the afternoon. If you focus on your admin time the same way I want you to focus on your prospecting time, you got plenty of time, uh, uh, to, to service your clients, to follow up with the lender and the title company and this person and that person. You don't have to come up with the excuse every day, "But Brandon, you don't get it. I've got every Tom, Dick, and Harry that needs that need me, and that's why I can't prospect every day." Well, if you set up your schedule, or you've got this admin time in the afternoon, you know you could, you've got time built in the schedule to handle all that stuff. And then we go on appointments or we do more prospecting in the afternoons from 3, uh, uh, early evening, 3:00 to 6, late afternoon, early evening. That's the simple listing agent schedule. Super basic, super simple. That is what I recommend.
Now, as far as lead sources go, all I want you to do is pick a minimum of three, max five. All right? The only thing I'm going to recommend is that you at least have your SOI, past clients, as one of those sources. I don't want you to ever get in the habit of like being this, this turn and burn, uh, agent where all you do is work with strangers, and then you wake up in 10 years and resent this business because you're not getting any repeat referral business. So let's make sure that the SOI, past clients, is part of the outbound prospecting plan. But you've got so, so many options here, right? You can go, uh, expired listings, you can go for sale by owners, you can go for rent by owners, you can go probates, you can, [Music] go absentee owners. I'm just giving you guys some, right? You can go, uh, circle prospecting, you can go with downsizers, you can go, uh, you can go what we call Bullseye prospecting, which essentially is just, uh, just listed, just sold calls, but with a little bit more narrow focus. And the list goes on and on, right? You can go pre-foreclosures. So it really doesn't matter, right? All I want you to do is pick five. That's all you need is to pick five of the sources.
Okay, now once you have that, when we talk about lead prioritization, some of these leads you need to contact, uh, sooner than, than others. And the reason for that is your competition. So competition and timelines to convert. So here's what I mean. The way that this works is the leads that convert the fastest also bring the most competition. So when you say to me, "Brandon, I want money and I want it now. I want listings and I want them now." Okay, cool. That means you're going to have to go after expired listings. Yeah, but I don't like expired listings. I know, I understand. But that's the only lead source that we have. And be grateful that we have that because a lot of other industries don't have things like expired listings. So you're going to have to go after expired listings first. You're going to have to prioritize that at the top because it brings about the most competition because it has the shorter, shorter, shortest timelines to money, right? It's the greatest opportunity to money. Now, we can call an expire today, get the listing today, get it up on the market on Friday, and sell it on the weekend. It's the quickest way to money. So of course, the competition's high. Then as you go down the priority list, maybe you go after for sale by owners. This is just an example, right? Business model. Then you might go absentee owners. As you go down in priority, timelines to convert take a little bit longer, which the, as a result, you have less and less and less competition. Okay? So there's three sources. Your fourth source, maybe you're going to do, uh, downsizers. And then last is your SOI, because you probably don't have a lot of competition going after your past client center of influence. You can contact those people, people, uh, at the end of your prospecting schedule. So let's go through, well, again, you should have already picked your lead sources, but again, I would just say focus on five. All right.
If I was going to make a recommendation on what this would be, like I said before, I'd have your SOI, past client, number one for sure, right? Now, I'd be going after, uh, expired listings for sure, for sale by owners for sure, absentee owners for sure. Absentee owner/probate, these are really good, uh, what we would call niche style business. And then I would have, uh, probably circle prospecting in a specific area where I wanted to get really, really good listings. Okay? So there's your 2024 business plan.
Now, here's what I want you to do. I'm sure you got a ton of questions about the business plan. What about this? What about that? How do I do this? How do I do that? You can use the comment section for sure. But I'm also going to invite you again to schedule a coaching consultation. If we, we, uh, built this plan together and it's something you're excited about and you want my support to help you, we can work together for a year or longer. You'll decide that. If you want to have that conversation and talk about, "Hey, yeah, you know what? I do want to work with you in 2024." Again, I'll put a link right underneath this video so that you can schedule a, uh, coaching consultation, find out how it all works, find out all, all the logistics, and then decide if working with me at this time makes sense or not.