5 Secrets to Grow Your Business...And Even Double It This Year
Another year is upon us the market is already off and running.
Freddie Mac is projecting only a 2.92% increase in the number of homes sold for 2018 and a 5.7% increase in home values (which is 14.92% less than 2017).
And, with several hundred people per month joining the real estate industry in virtually every market across the country, it’s going to be a challenge to grow your business even though the market is still smoking hot.
The good news is there are at least 5 proven secrets you can use to grow your business - and even double it in the next year - despite the challenges you face in the market and in your local area this year.
The better news is that you can do it and not have to empty your bank account to make it happen.
With a simple focus on doing the right things in the right order and a commitment to being super consistent with lead generation and conversion, you can see amazing results in your real estate business this year.
Here are the five things you must do in order to see incredible growth in your business over the next 12 months
5 Secrets to grow - and even double your business - this year
Look, doubling your business in a year can be a daunting task, but when you break it down into bite-sized pieces, it’s quite attainable.
In fact, you can double your business by experiencing a very realistic 5.95% growth every month over a 12-month period.
It’s not a ridiculously crazy result to create, instead, it’s a consistent, incremental increase that you need to generate in your business on a month-over-month basis for a year.
If you were able to increase each of the following 5 key profit areas, you would have exponential growth:
- Lead Generation: You need to know how many leads are you generating right now to generate the income you are currently bringing in the door. There’s a direct proportion between the two of these numbers for sure.
- Lead Conversion: You must know your conversion numbers across the board, starting with visits to your lead generation platforms, working your way through over-the-phone and face-to-face interactions and ending with contracts signed that turn into sales. Doubling your business is heavily dependent on conversions.
- Income Per Deal: Knowing your average income per deal is key. You can easily monetize what you make per deal by increasing your average sales price, negotiating higher commissions and adding transaction fees to what you do.
- Average Number of Transactions (Repeat/Referral Business): You must be aware of how much business comes from past clients. You also need to have a strategy cultivate better and stronger relationships with your past clients and sphere in order to garner more of the referrals they come across each day.
- Profit Margins: It’s not just what you make, but what you keep. By doing a better job with what you already have and maximizing it, you put yourself in position to reap handsome rewards from your efforts.
These 5 key profit drivers fit into a formula - an exponential growth formula - and are the catalysts for taking your business to higher levels of success and profitability.
|Exponential Growth Formula|
Lead Generation x Conversion Rate = Average Number of Customers
Average Number of Customers x Average Dollar Sale x
Average Number of Transactions = Revenues
Revenues x Profit Margins = Profits
Let’s take a closer look:
If you’re generating 87 leads per month and you increase your lead generation efforts by outbound prospecting and inbound lead generation through marketing, you can bring in 15% more, or 100 leads per month, without making a huge financial commitment.
Now, let’s say you have 100 buyer and seller opportunities and convert 25% of them into closings.
That equals 25 transactions.
If you increase conversion 15% simply by having a clear advantage over your competition, you could increase your closing ratio to 40%. So, instead of doing 25 transactions you do 40 in total.
Income per deal:
If your average commission was $4,500 and you could increase that by 15% you would make an additional $675 per transaction. You could achieve this by increasing your split with your broker, charging a higher commission, collecting a transaction fee, or increasing the average sales price of the homes you sell.
If you can take the average client and get them to refer you 15% more clients per year per client you with systems in place for generating referrals you would have 6 additional clients making 46 your total.
Your current model would is 25 transactions x $4,500 = $112,500
Using the exponential growth 5x formula your business would look like this with only a 15% increase across these areas:
Increase conversion by 15% from 25-40.
40 transactions x an increased average commission of $5,175 = $207,000
Once you add in the 6 additional referral transactions and your total = $238,050.
This more than doubles your business.
Making your business perform optimally should be something you take very seriously. You already put in a number of hours each day to keep the machine running, so doesn’t it make sense to put in the time and effort to make sure that you’re maximizing what you’re already doing?
By taking a step back to look at what you do, analyze what’s working and what isn’t, work on your business and solve the biggest problems you have, you put your business in position to experience exponential growth year in and year out.
Most importantly, you’ll be poised to double your business a few times over the next several years.
Click the button below to speak with one of our Strategic Business Partners about what you need to do to double your business over the next 12 months.