Vital Signs of a Healthy Business Part 1

Vital signs (often shortened to just vitals) are a group of the 4 to 6 most important signs that indicate the status of the body's vital (life-sustaining) functions. Pulse, blood pressure, temperature, respiration rate are a few of these “vital signs” of life.

Days worked - With 365 days, when counting M-F “working days” there are typically 250 days considered “Working Days”.  What I want to emphasis is this, when we take a step back, and realize we have 250 days or 2000 hours (if working an 8 hour day) to accomplish our goals it puts into perspective there is an ample amount of time to achieve our goals.  So, if we’re falling short, why?  The first area most people falls short is having a clearly defined business plan/goals set. In fact, most studies tell us that only 3% of us have written goals.  One of the most famous studies from the book What They Don’t Teach You in the Harvard Business School, by Mark McCormack posed this questions and research: Why Do 3% of Harvard MBAs Make Ten Times as Much as the Other 97% Combined ? The answer is a simple question: “Have you set clear, written goals for your future and made plans to accomplish them?” Interviewers asked new graduates from the Harvard’s MBA Program and found that :

• 84% had no specific goals at all
• 13% had goals but they were not committed to paper
• 3% had clear, written goals and plans to accomplish them

Ten years later, the interviewers again interviewed the graduates of that class.  You can guess the results:

• The 13% of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all.
• Even more staggering – the three percent who had clear, written goals were earning, on average, ten times as much as the other 97 percent put together.

So, all that to say be encouraged!  We have an ample amount of time to make our goals a reality.  We simply need to be sure to have written goals and a plan to make it all happen.  This is where a mentor, coach or accountability partner comes into the equation.  Often, I will hear someone make the comment “I can’t afford to have a coach” I’ve always said, “how can you afford not to have a coach?” I can assure you that you are losing more money than you would ever invest in having a coach. Look at it from this angle, what aren’t you accomplishing that you could be with the right coach and guidance? Something to think about.

Hours Prospecting/Lead Generation - This is by far the #1 issue for most Real Estate Agents.  What’s interesting, is if you look at any other sales job, this is expected as a normal part of the job description.  However, for some reason... I haven’t yet figured out, people get into Real Estate Sales and think prospecting is optional.  That is the issue, we have to STOP thinking it’s optional.  Here’s the issue, you’re an independent contractor so really, who is holding you accountable but yourself?  It’s been my experience; we will do more for someone else than we will do for ourselves.  Again, why a coach is so important to have running with you.  So, a fair question is - how many hours do you have to lead generate? The answer is going to be based on your goals.  So...we can begin to see how we are going to have a challenge if we don’t have a clear understanding of the first vital sign.  I have always compared this to any other process, let’s look at working out.  If you haven’t been exercising, it wouldn’t be advisable or realistic to suggest going out and running 5 miles day one.  However, you could go for a 15-20 minute walk today.  In a few weeks increase to 30 minutes and before you know it, 45-60 minutes is your norm.  It’s time on task over time. So, start with 30 minutes of lead generation, move to 45 and then up to an hour.  You will know when you can move on to the next level.  The goal is to get to a solid 2 hours a day.  Why let’s look at the next two vital signs that will help bring some clarity as to why.  Remember; it’s NOT a sprint, this is a marathon, and when we pace ourselves we’re going to accomplish more than having spurts of great days, followed up by weeks or months of nothing.

Attempts Made - When I am working with a client, having them track how many attempts made (dials, doors knocked etc) .helps us understand the ratio of attempts to live contacts. This will vary depending on the source you are prospecting to.  We have to be honest with ourselves, I recently was on a coaching call with an agent and this person said “this isn’t working” so, we dug in and discovered that there wasn’t even enough attempts taking place to have any positive results happen.  Give yourself a chance to win.  You can use whatever system you want, I always found just making a hash mark on a piece of paper while I was lead generating worked for me. Then, transferring this to a spreadsheet.  The vital sign here is just to have an accurate count of how many attempts you are making each time you are prospecting.  

Live Contacts - I think that is funny, live contacts … it’s not as though we’re talking to people that aren’t alive.  What we’re talking about on this vital sign is of the attempts, how many of these result in a conversation?  It’s important to have defined what a contact is before you begin.  I have always used this definition “A contact is a decision making adult (18 years or older) where you have had a conversation that included a direct real estate related question such as - Who do you know that is looking to buy a house, sell a house or make an investment in Real Estate that I can contact (today, now, this week). It doesn’t have to be more than this, of course if more that’s even better.  The key is we’re making a direct attempt to generate a new lead or appointment.  I don’t consider email, facebook or texting a contact.  Why?  People tend to respond differently when they are able to “hide” behind technology AND as we’ve discussed in previous episodes, eliminates 93% of communication since all we’re working with is the “words” which is 7% of communication. The goal?  It again, comes back to your goals in step 1.  Let’s look at a few examples:  250 days worked, 5 contacts = 1250 contacts in that year.  250 days worked, 10 contacts = 2500 contacts in that year. 250 days worked, 15 contacts = 3750 contacts in that year. In all cases, if only 1-2% resulted in a sale this would satisfy 90% of agents goals. 

Leads Generated - So, with all the efforts in the first 4 vitals, you will begin to build what we refer to as a “pipeline.”  If you don’t have a pipeline of leads, you essentially don’t have a way to forecast what you will be putting into contract and closing in the next 90 days.  Also, a key thing to remember in about this vital sign is that the large majority of your appointments will come as a result of following up on your leads. It’s only reasonable to understand that as we’re making our daily calls that the people you come in contact with may not be “ready” to go today and yet do have plans to do something real estate related in the near future.  When I work closely with a client, I like to track their top 10 leads.  I know if we’re tracking the top 10 leads, monitoring their motivation and discussing ways to move them forward in the process they will be constantly  opening new business and closing sales.  So, how many great leads do you have now?  Depending on your closed sales goal, the definition of a great lead will vary.  If you are looking to close 12 sales in a year, you may look at leads that are within 90-120 days as a viable lead. If you have a goal to close 50+ deals, you may be looking at leads that are ready to go inside of 30 days.  The key here is the more business you are closing, the more likely you will have a smaller time window for what you call a “great lead.”