Why do small businesses fail?

This is going to strike a nerve, and I hope it does because it is something that really needs to be discussed in the industry. The failure rate in the real estate industry is extremely high. Throughout my 20 years, I have witnessed a near revolving door of agents coming in and then they are gone a few months later.

I have seen agents that have come into the business with great ideas and poof, no longer around. I have seen agents come in who were not so confident and boom, gone. I have also seen agents who were seasoned fade away. While I helped grow one of the most profitable market centers through recruiting and training I saw this up-close and personal

WHY?

Well, through my own personal journey, talking with top agents, coaches and managers in the industry we agreed on one point in particular. Coincidentally, it is the same reason 4 out of 5 small businesses fail. And that reason? Lack of Business Management Experience.

This one-piece is not typically taught in any pre-license class or is there much emphasis on this point, most franchises have a business planning clinic but that is far from the same thing. To truly understand what it takes to be successful in this business you must have some vision from the management level of your own business.

Once you are able to create and track your goals and action plans you will start to be able to build a time management schedule. You will also start to make additional plans on how to achieve the required number of contacts and appointments. By tracking these numbers you will be able to see if you are of course and then adjust as needed. Finally, it is the management level that provides accountability, this one-piece is often overlooked and not part of the agent’s regiment.

Coaching has several benefits. One of those benefits is Accountability. When you are to report your activities and progress to another person and have accountability to do them, you become more successful. If you are not held accountable then it is very easy to slip away from doing the required activities.

But, seeing many agents do not have this level of accountability built into their own business you are set up for failure from the beginning.

You are also set up for failure because they do not discuss finances with you. I have witnessed, and have been guilty of it as well, getting trapped by the burden of tax payments. It is easy to do so if there is not discipline. Think about it, you receive a $10,000 commission check. It is easy to use that to play catch up, go on vacation and do additional marketing…. Whatever…

But if you are not disciplined and put a predetermined amount away each check, then you may not have enough when it comes time to pay quarterlies. This will cause a larger payment and potential penalties at the end of the year.

You must understand from day one that the $10,000 you received as a commission check is NOT a paycheck…

Understanding finances is also another duty of the management level of your business. Forecasting and Budgets are things that MUST be done. Successful agents and teams do this.

Why?

Because it is crucial to sustaining their existence. You must know how much money you have coming in, how much you need, what your progress towards your goals is, and a slew of other things which are needed.

The Cure?

With anything that is negative there is a positive. So you can fix this right now. Starting today, take a look at your numbers, your business plan, and track them.

Are you on track, what adjustments are needed?

You can track your numbers with a spreadsheet or a system like More GCI. This will allow you to see what is needed to achieve your goal, set an action plan to accomplish it, track it to see any negative gaps, and make adjustments as needed.

Yes, a good manager will track your progress.

A good manager will also hold you accountable to do the required tasks to reach the goals.

Ask yourself this one question.

How much time do I spend working ON my business, not IN my business?

Be honest… You need to spend time working on your business as a manager, as the captain, as the pilot. It is only when you truly understand what is needed can you make a plan to do it and then track.

So there you have it. That is the one simple thing that you can do to fix your business and become a top producer. One does not simply drive to the bottom of Mt. Everest and start climbing. There is a ton of preparation that goes into it. Then land in Nepal and take a difficult journey just to reach base camp.

It reminds me of the old saying, Failure to Plan is Planning for Failure.

Plan your business.

Understand what is needed.

Do it.

Track it.

Adjust as needed.

It is simple to do, but many agents ignore this one step. However, if you can master this one step you will master the business!

Starting today, start to look at your business through different eyes for just a few hours per week.

Make goals each week. Figure out from your business tracker how many appointments you must run per week, how many contacts your need to make per week, what your GCI needs to be and how many transactions you need to do. Then do it and track it.

I can tell you this, when agents start to see their progress come to life it is motivating. It can also be demotivating if you are not doing the required work. But when you are doing the work, seeing it come to life it will breathe a new life into you and make you determined and focused.

This determination and focus will lead you to great things and make you unstoppable.

Believe,

Johnny Mo