Business Planning Tip: the Production Plan can be more effective if you plan for the stuff behind the numbers

By Cheri Alguire

Like the budget, writing a production plan for success is a lot about numbers. Black and white. Hours, dollars, and widgets. There is a sensible layout to follow. You map out the big picture by breaking down your transactions to quarterly and monthly goals. You examine the buyer sales, listing sales, and number of new listings it takes to produce the income needed to support the budget. Easy, right?

Well, straightforward, maybe. Easy, no.

Production planning is as much about problem solving and perspective as it is about the numbers. Why? Because you know you will not always hit your numbers. (If you do, you probably were not challenging yourself enough during the visioning process.) And not hitting the numbers obviously means you have a problem. You may be overspending the budget and/or underproducing the income. Not hitting the numbers for an entire quarter might not just mean a problem, but a genuine crisis.

So it is important when production planning to focus not just on target numbers, but on the potential problems related to production so that you can plan proactively to stay in business with a smile. Lets look at some Givens.

#1 You are in control of more than you think. If you chart the numbers for first quarter and fall short, what do you do? (First of all, you always review the numbers.) If first quarter is lean, be prepared for you and others to blame outside influences. Oh, the market. Oh, those fickle buyers. Oh, those unrealistic, so-and-so sellers. Oh, those banks. Slap yourself and your teammates awake! The market is what the market is. Buyers and Sellers are simply responding to it. YOU are the expert. YOU need to take control. Take control of their expectations. Take control of your own emotions. Adjust your numbers if necessary for the rest of the year, but take control of your sales. If you were successful before this market, there is absolutely no reason you can’t be successful now. You have the experience and the skills. If you are new to this market, you have no excuse to be anything but successful because you don’t know the difference! If you were three sales short in the first quarter, plan now what it takes to make up those three in quarter two.

#2 There are some things you cannot control. Let go! A teammate’s sudden divorce is going to affect your business. No doubt about it. Can you influence that event? No. (Even if you offer the unhappy couple an all-paid expenses weekend at the Poconos in a heart-shaped tub, their relationship will not change because of your generosity and desperate attempt at keeping your top buyer agent happy and productive.) Curse fate all you like, but know that the teammate will have court dates, down days, and need extra time off to be with the kids. Let go off the idea that life is unfair and provide as best you can for the loss in production through your own efforts or added staff. Know that these things happen. Deal.

#3 Not to overuse and abuse the often quoted, Attitude is Everything, but it is. The mindset you get up with every day determines the success of your production plan. Is the market everything you read about in the papers or hear about on the TODAY SHOW? Is the sky really falling? If you believe it, your numbers certainly will reflect that view, (and you will need to hope that your spouse doesn’t mind supporting you for some time to come.) On the other hand, if you wake up each day seeing opportunity and, yes, fun in the current real estate market, your numbers will bloom and grow with every positive step. It’s not a Pollyanna world, but neither is it Oscar the Grouches. Your perspective determines outcome.

Plan for the numbers. Plan for the problems. Plan for success.

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Coach Cheri Alguire has helped hundreds of Super Small Business Owners, Realtors, Managers and Coaches create Business and Life Plans. Check out http://RealEstateBusinessPlanningGuide.com or http://www.SmallBusinessPlanningGuide.com/ contact us today at http://www.CheriAlguire.com

Budget: A Necessary Part of a Good Business Plan

By Cheri Alguire

With the constant bad news about the economy, everyone is talking budget these days as if it were a new and exciting phenomenon—just discovered!

• How to save a buck
• How to budget for a successful future
• How to make your dollar stretch the farthest

The truth is that there is nothing new, trendy, or sexy about budgeting. A well-planned budget is simply the most practical aspect of your business plan—and one of the most important. It’s also not that much fun. But if you think about it, if you have completed the other parts of your business planning guide, you’ve done the hard part already. You’ve already analyzed where you spent your money last year and how well it returned your investment. You’ve articulated the vision for your business in the next year, five years, and ten. You’ve written down the action steps to achieve that goal. Now it’s just a matter of the numbers.

The easiest way to tackle this job is with a good software program like QuickBooks, but you can also manage the old-fashioned way, by hand on a chart, if that’s what it takes to get you started. The budget records your total income, gross and net. It includes the numbers for your current expenses, plus those you anticipate adding under your new vision. It breaks down the expenses and itemizes them so that nothing is overlooked, creating a potential drain on your cash flow down the line. And remember: cash flow is the goal.

When the numbers are complete, if you don’t like the result, you need to remember to reevaluate the plan. If your marketing exceeds your income, for example, then you must make a decision: slash the marketing budget or make more money. Either way, your budget needs to “show you the money.”

Approach #1: Gary Keller reminds us to “lead with revenue” when budgeting. He cautions only to spend the money that the business has generated and avoid the “Field of Dreams” mentality of expecting business to materialize if you spend enough money on marketing, desk staff, quality equipment, etc.

Approach #2: Write down the number of marketing dollars you will need for the next year to reach your goal then do the math. How many lists will you need to carry in order to create that cash flow? How many will you need to sell? How many buy sides? Those are your numbers to live by.

Truth be told, a combination of these approaches is probably the wisest course, but regardless, the budget is the budget and you stick to it. (That’s the unsexy part.) But don’t worry about that because this axiom can serve you well when some annoying vendor tries to convince you that you really must buy his refrigerator magnets by the gross with your logo embossed on them in order to be a success at the next home show. You now have your ready-made excuse: “oh, we set our marketing budget last October.”

The budget might not seem to be your best friend at times, but it should be your wisest adviser—the one you trust with your most important decisions. Accordingly, spend enough time with it to do it, and yourself, justice. Your business, and your profit/loss statement, will thank you.

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Coach Cheri Alguire has helped hundreds of Super Small Business Owners, Realtors, Managers and Coaches create Business and Life Plans. Check out http://RealEstateBusinessPlanningGuide.com or http://www.SmallBusinessPlanningGuide.com/ contact us today at http://www.CheriAlguire.com

Why a Development Plan is Critical to Your Business Plan for Next Year

By Cheri Alguire

It is almost time to begin creating your Business Plan for next year. One important part that is often overlooked is what I call the Development Plan. A Development Plan helps you to look at your overall business in different specific areas.

A great story is told by Jeffrey J. Fox in HOW TO BECOME A MARKETING SUPERSTAR. It is the story of Pablo Picasso, dining at an elite New York City restaurant and being approached by a socialite who presumes to ask him for a drawing.

Fox relates, “Picasso grabbed some paper, and with pen and pencil, promptly sketched the waiters passing parfaits. As the woman reached for the sketch, Pablo Picasso said, ‘Madame. That will be $10,000.’ Shocked, she replied, ‘But that only took you five minutes.’ ‘No, Madame,’ replied Senor Picasso, ‘it took me fifty years.’”

Fox tells the story as a parable for understanding—and charging--your worth. (And come to think of it, that part of the lesson applies here, too: a solid development plan will help you avoid the folly of cutting your commission fees.) But we recognize Picasso’s remark about the fifty years as a clear symbol of the value of a development plan. It takes time to plan, but the plan should have long-lasting consequences that shape the course of your business down the road and, ultimately, your desired profit. A development plan, in effect, defines your practice.

A development plan can be as simple as a list. But it is an essential list. On this list you need to itemize the changes needed in the next year to improve your business. On it you should include:

• Marketing and Lead Systems
• What kind do you need to bring in the number of leads?

• Sales and Servicing Systems

• Technology
• What about Facebook?
• What about Twitter?
• What about Texting?

• People and Staffing
• Do you need an office manager?

• Support Systems

• Training

• Policies
• What are they? And are they written down?

• Procedures
• Ditto

• Team Development
• Retreats
• Celebrations
• Training

• New Ideas
• What is next?

This is the place where you name your dreaming: what is it that you want to create? To revise and perfect? To research? To implement? What kinds of systems and practices do you want to employ? What people and roles?

At the development stage, you may be looking at assistants, additional agents, coaches, mentors, equipment, programs, and education. (Budget concerns are for another day.) In development, we identify what it will take to produce your desired outcomes. Put them in place, and the path toward your business future is paved.

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Coach Cheri Alguire has helped hundreds of Super Small Business Owners, Realtors, Managers and Coaches create Business and Life Plans. Check out http://RealEstateBusinessPlanningGuide.com or contact us today at http://www.CheriAlguire.com

Business and Life Planning

By Cheri Alguire

Happy Fall! Autumn officially begins on September 22, but having the kids back in school is almost a better marker for the beginning of fall for me. It is like the TV commercial with the mom singing it is the Hap-Happiest Time of the Year!

I spent 10 days in August celebrating my birthday and doing some hiking in Park City, Utah. What a beautiful area.

For me, hiking is not only a way to get exercise and see some incredible sites (yet we did experience both of these,) it is also a time for me to plan and dream and set goals for myself.

Each year on my birthday, I set goals for the next year in both my personal life and in my business. I have been doing this for many, many years. It is amazing what can be accomplished with a little thought and dedication to it on a monthly, weekly and daily basis.

I am not sure if it was because my birthday ended in a zero this year, or it is just where I am in my life right now, but I had the most amazing time creating my life plan for the next few years. I am really excited about where I am going and the things that have already begun to fall into place since working on my life plan in August.

Now that I have finished my Business and Life Planning, I am going to begin getting my coaching clients started on this process. Ask about it during your next session or check out the eCoaching program if you would like to work the guide on your own.

Also, if you have been thinking about hiring a coach to help you with your 2010 Business and Life Plan, maybe it is time to look into business coaching. We have some great coaches at www.ProRealEstateCoach.com or www.CoachCheri.com

GOAL SETTING IN A DOWN ECONOMY

by Cheri Alguire

There is no shortage on advice on Goal Setting, and it’s one of the “basics” of business planning. But how do you set goals when sales are down and all you hear on the news is bad news. What is the alternative? Participate in the recession? Just sit back and let things happen to you? Good economy or bad, goal setting is pivotal. From professional athletes to motivational speakers to CEOs to Real Estate Agents to Super Small Business Owners to Stay-at-Home-Moms, Goal Setting is undeniably the key to success.

If you don’t know where you want to go, how can you create a plan? It is like jumping in the car with your family in it ready to go on vacation and you have no idea where the family is going. You don’t know if you are going across the county, across the state, or across the country. You can’t plan how long it is going to take, or the best way to get there, because you are not sure where you are going. You just get in the car and drive, hoping that something will come up that will give you direction, will give you hope. If your days seem like you are just hoping in the car and driving around without a plan, maybe it is time to do some goal setting.

• First, THINK LARGE. Don’t start with tomorrow, or even next year. WHERE DO YOU WANT TO BE IN FIVE YEARS? TEN YEARS? If you concentrate on how BAD things are, you will not be able to think big. Consider personal, financial, and business goals all on this wide open canvas of possibility. Don’t think in terms of How Will I? Think in terms of I WILL.

• Second, VERBALIZE your goals. WRITE them down in specific detail. POST them on your wall for a daily morning review.

• Next, VISUALIZE them. Create the picture of that success, or that vacation, or that volunteer activity. POST it.

• As a final step, ANALYZE your goals. Are they SMART? (Specific and Measurable?) Are they PURE? (Positive and Relevant?) Are they CLEAR? (Challenging and Appropriate.)

• And as a postscript, LEGITIMIZE them. REVISE and REWRITE them so that they fit both your dream and the “test” above. Confirm them with yourself and put them into action.

Remember that when Goal Setting, where you have been isn’t necessarily relevant. Now the course to set is where you want to be. It may be helpful to think of goals in terms of PERFORMANCE as much as in imagery. So when thinking of your goals, for example: an increase in the number of referrals you receive over the next five years, think not only of the physical number: say, 30%, but of the performance or action which needs to accompany that goal. Let’s take this example through the steps:

• I will increase our referral business by 30% in the next five years.

• I see a client appreciation picnic of 500 people catered by my favorite deli.

• Smart= I will measure the increase in the number of referrals year by year.

• Pure=I will reward clients and my team members with a company picnic to show our appreciation.

• Clear=I will rise to the challenge by increasing referrals incrementally each year from our current 20%.

• In terms of Performance/Action: I will hand write a thank you after each business transaction. I will observe birthdays and anniversaries through my email databank. I will strive for a 5 on every evaluation that is returned to me through my attention to detail and positive service plan.

• Make the goals FUN and MOTIVATING. If a new car or piece of jewelry or house motivates you, put that in your goal. Put little goals in along the way as well. Buy yourself that new designer purse when you hit a certain number of sales. Reward yourself along the way to hitting your BIG Goals.

Suddenly the goal is not just a dream, but a in specific direction toward your definition of success. Goal Setting should put a smile on your face! It’s the future you see in your dreams—achieved through your efforts and passion.

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Coach Cheri Alguire has helped thousands of people set and achieve goals far above anything they ever dreamed possible. If you want more information on the Business Planning Guide or her Goal Setting Coaching please visit http:// www.CheriAlguire.com

Time to Review Your Goals and Business Plan

By Cheri Alguire

It is the end of the first quarter and time to check the score.

Just as planning your goals for the coming year should always begin with a look back at the year in review, so planning your business for the rest of this year should take a look back at the first quarter. Business planning isn’t just a numbers game, but also an accounting and analysis of the year’s overall progress.

Begin by asking the hard questions:
• What happened in your business this past year? Past quarter?
• Did you meet your goals? If not, why not?
• How did you accomplish your successful goals?
• Where did your business come from?

From there, analyze the specific sources of success or failure.
• Were your lead systems facilitating your goals?
• Did the number of listings support the number of closed transactions?

And yes, now analyze the numbers: closed sales, closed commissions, expenses, how many listings taken, how many listings sold, how many active? Quantify where the business came from in comparison to your goals: how many sales from sphere? Referrals? Websites? Print media? Signs? Other lead-generating systems?

Also take a look at the team. Who do you have working with you and what are their roles? Did they support last year’s business? Did they reach their goals? Were their goals congruous with your business plan? And let’s not forget that important last count: the one where you evaluate yourself, including how many hours you worked per week and how much vacation time you took during the course of the year or quarter.

Think of this business in review task as a report to imaginary shareholders in the business. They would need a reminder of last year’s goals, a comparison to the actual numbers, an analysis of the year’s operations and relative success, and an evaluation, ultimately, of your business strategy. The success of the past year forms the basis of your business plan for the next. You are able to determine if you need to completely overhaul your “to-do” list or merely fine-tune it. You are able to focus on the past year’s strengths in order to maximize their results for the future. You are also able to isolate weaknesses or “misses” and problem-solve them to a positive resolution.

The business “flashback” in review cannot be ignored if you hope to continue to grow your business into tomorrow. The necessary steps to planning for that future can only happen once you’ve seen what came before. That is when you learn not just from your mistakes, but from your successes. It’s then you can set the new goal and create the plan. It’s then you can focus your time and resources. It’s then you can make accountability a part of the process. It’s then you can move forward with the confidence that you have planned for an incredible year ahead.

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Coach Cheri Alguire helps Real Estate Professionals, even those who hate numbers, analyze and understand the numbers in order to create a more profitable business. Find out more at http://www.prorealestatecoach.com/ or http://www.RealEstateBusinessPlanningGuide.com/

Is Your Real Estate Business Running Smoothly?

By Cheri Alguire

Let’s face it. The time to ask yourself, “Is my business running smoothly?” is NOT after you have just had a flat tire and are bumping down the road. The time to ask that question and analyze its answer is during the business planning process AND throughout the year.

A business is a complex machine with many moving parts. Well-maintained, it works smoothly and takes you where you want to go. But if just one part is neglected over time or overlooked, an eventual breakdown is certain.

To begin the process, take a look at your systems and how they connect to the big picture. Where, exactly, do they exist in the framework of your business and how efficiently are they running? Jennifer James, in THINKING IN THE FUTURE TENSE, reminds us that “systems thinking” can bridge the gap between reality and perception, and is probably the best way to problem solve (189.) Systems thinking “helps us understand that all parts of a business or a process are connected, and that when one part is challenged, all the others are as well” (189.) Typically, we may look at problems in isolation, but that may not solve the underlying systemic issues.

Let’s take an example of lagging sales. Agents are not making production goals; therefore, the cash flow or profit bottom line is not being met for the business. You could dismiss the problem as “it’s the market,” and continue to slump in sales. You could blame your team and look for new help. But if you look at all the systems that feed productivity: lead generation and marketing, listing systems, follow-up, people and support systems, you may be able to discover various cogs in the wheel that are preventing progress. Does listing inventory need to increase in order to produce leads? Are follow-up systems being utilized? Do team members need more mentoring or training? Could the answer to lagging sales be a team retreat that re-motivates and energizes the team members?

Systems thinking allows for and demands creative problem solving. Take Steve Jobs of Apple computers. Infamously “fired” at one time from his own company, Jobs loved the business too much to stay away from it. After creating PIXAR (among other projects) while on hiatus from Apple, he returned to regenerate not only the product (Macs) but the industry itself. While launching and perfecting iMovie (a consumer-friendly video-editing application) for the Mac, he realized that software wasn’t enough. In order to function properly, he concluded, it had to work in conjunction with several other components. He became committed to the goal that Mac would offer something unique by developing whole business systems for the personal computer. And of course from there, he made history: launching a little digital music business with iPod. (See pages 257-258 INSIDE STEVE’S BRAIN by Lenader Kahney.) Systems thinking was the key.

Systems thinking is not so much thinking “outside the box” as it is the wide-angle view. So pan the vista of your own business. What systems are in place? Are any missing? Of those that are operating, are they running as efficiently as they could be? Put the individual pieces together to create a smooth and successful whole. Problem solve with imagination and collaboration to fix issues that slow you down. Be cognizant throughout the year. Create and maintain a smooth-running machine.

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Coach Cheri Alguire has helped hundreds of Small Business Owners and Real Estate Professionals create and implement an effective Business Plan. For more information check out http://www.realestatebusinessplanningguide.com/ or http://cherialguire.com/