As we roll through the month of December and business winds down as it does in the real estate sector, there is still plenty we can do to remain busy and productive. Much of what we do in November and December sets us up for a good winter after the holidays are over and to have a productive start to the new year.
This past week, I completely reworked my chart of accounts in Quickbooks to more accurately reflect my real estate business and to better be able to track income, expenses, cost of sales and what sales come from which lead sources. If you don’t have your chart of accounts set up properly, you will have to use a separate sheet you will need to create on your own to do this for you. I suggest for any real estate agent or team (which I have) to start with the MREA Chart of Accounts and customize it from there as I have done. It will give you an excellent starting place.
After reviewing my old, very poor accounting and updating it, I can now see exactly who does what production, how much of it they do, how much it costs to do it and where all of it comes from, from every real estate lead source we have closed this year and I added additional lead sources that I want to use next year to increase our lead sources, sales and net income. Only using this new accounting system allowed me to see where are strengths and our weaknesses are and it got me thinking about making sure we added new lead sources for next year and allows me to set specific goals for each category that I can then further break down into how we can achieve better results for each lead source category.
For us personally, our lead sources break down as follows:
- Internet (organic search) – 85%
- Sphere of Influence – 15%
- Internet (organic search) – 75%
- Sphere of Influence – 25%
So as you can see, we do most of our business from Internet lead generation and some of our business through our sphere of influence. But, as I look at our numbers, which were pretty good overall this year and up from the year before, I see some huge, glaring weaknesses. First, we rely too heavily on the Internet, next we don’t work our sphere enough, and we don’t even try other sources. We don’t do any PPC advertising on the internet, we aren’t using social media effectively, we aren’t working on FSBO’s and we also are not calling expireds or working any particular traditional farm area. In other words, we really have too many of our eggs in one basket and that is risky for any business.
So that got me thinking about what to do. We need goals and we need a plan to meet those goals. Looking through my chart of accounts, the two least expensive forms of marketing are the ones we are doing; organic search and stumbling upon those people who have used us in the past.
What I have done now is set out to research the top real estate lead sources for real estate. Here is what looked to be the general consensus. I have arranged them in what seems to me to be the one with the highest opportunity for volume to the lowest:
- SOI/Past Clients
- Geographic Farm
- Being Social
What I intend to do is to write a post on each of these lead sources and explore them further and in more detail. I will do this for two main reasons. One is to research and learn more about how to implement them myself and the other is to share what I learn with readers here so you can go out and begin improving as well.
The first thing I will do from here is set goals – attainable ones and articulate those goals to my team by showing them the numbers as they are and getting buy in from them to begin working with more purpose on what they already do and show them why we need the other sources. Next, we will all get a plan of action to be successful and reach our new goals. I’ll have some more evaluating to do, but I already have some goals in mind. I want to double our Internet sales, triple our SOI sales and I want to make Expireds/FSBO’s and a geographic farm make up a 10% share of total sales each at the end of 2014. We really can’t implement everything at once so I will need a plan. It will look something like this:
- Internet – 50%
- SOI – 30%
- Expireds/FSBOs – 10%
- Geographic Farm – 10%
I’ll get these numbers from our sales from this year but for easy numbers, If I know we closed 25 internet sales and my goal is 50 (double this year), that can only be 50% of what my new goal for next year will be which is 100 sales. This means we will look to SOI for an additional 30 sales from sphere and then I want 10 more sales each from the two remaining areas. This is just some simple math based on actual numbers from this year extrapolated…
Now we have goals. We can track them in real-time and see where we are ahead, where we are behind and we can focus more on each as needed.
I’ll talk more about each portion in coming posts as I explore how to achieve more sales in each category and implement them as we go forward!