Chapter 1
Roadmap to Exponential Growth
If you play the real estate game, you must play to win. Playing to win requires you to understand the rules of engagement-something many real estate professionals skip over. If you picked up this book, it's likely that your business isn't where you hoped it would be. You want more; you need more.
Maybe you have been racking your brain, looking for a better way-a way to optimize your profits, a better and safer route for exponential growth. Maybe you are looking for a better way to become the dominant agent in your market, a better way to generate more referrals, a better way to stand out as an innovator in a sea of competitors.
Possibly you want this book to help you make a bigger impact and change the lives of those around you. Many of the people we talk to do not feel 100 percent fulfilled. They feel stuck in the day-to-day life of a team leader, mother or father, wife or husband, friend or business partner.
Your mind is an amazing creation. All the incredible technology, strategic ideas, and creative concepts invented come from our minds operating at a minuscule amount of the brain's power and capacity. Despite its complexity, sometimes the brain overlooks the most obvious or simplest solutions. Brilliant ideas slide right under our noses every day.
For example, meat was on the planet long before humans existed. We baked bread way back in 2600 BC, but it took 4,300 years before we thought to put the two together and create the sandwich.
Ice cream was invented in 2000 BC, but it took 3,900 years for the ice cream cone to be invented.
In 1857, toilet paper was invented many years after the modern flush toilet was produced in 1775.
These connections seem so obvious that we now take them for granted. It happens in real estate too. Five years from now, things we're blind to now will seem incredibly obvious.
Every day, you are surrounded by solutions that can dramatically increase your income, power, confidence, persuasion, and leadership. You can improve your overall success, not only in your real estate business, but in your life.
The problem is that you do not currently see the solution. Maybe you see it, but you do not have the correct perspective to understand how to implement the solution. Throughout this book, we will show you how to think bigger to uncover the opportunities and possibilities that exist right in front of you.
You will discover proven strategies that will take your business from where it is today and launch it out of the stratosphere. You will have clarity on not only where you stand but also where you need and want to go, plus the steps that you need to take in order to get what you demand from your real estate business.
Along the way, you will learn how to lead your team in a more productive way, as well as becoming a better leader, business owner, agent, spouse, and parent. Essentially, the strategies here will help you create a better version of yourself. Your community needs you; they are waiting for you to break out of your current box and uncover what's on the other side.
There are hidden assets and unlimited possibilities that you will discover along the journey. This will not only be a book for you to read once and put on your bookshelf; it will also serve as a lifetime reference to look back into when you need to gain more clarity or discover new breakthroughs.
Albert Einstein said, "Any fool can make things complex, but a genius can make the complex simple." You will be amazed at how easy it will be to execute on these principles and strategies in your real estate business. The first perspective we need to shift (and simplify) is how to improve your business.
You have likely thought to yourself, "How many ways are there to increase my real estate business?" Many assume a plethora of ways exist, possibly hundreds or, in some cases, thousands.
We have excellent news for you. There are only three ways to grow your business:
- Increase the number of clients.
- Increase the average sales price.
- Increase your average profit per client.
It is easy to make this overly complicated, but the truth remains. There are only three ways. Let's make it simple.
First, calculate your number of current and past clients.
Next, calculate the average sales price for each sale in the past twelve months.
Finally, determine your current commission rate per transaction side.
Now let's say that you have five hundred clients that will buy or sell a home with you this year. Your average sale is $300,000. And your average commission rate per transaction side is 2.6 percent.
Number of Clients
Average Sales Price
Average Rate
Annual Gross Commission Income
500
×
$300,000
×
2.6%
=
$3,900,000
But look what happens with only a 10 percent increase in each category.
Number of Clients
Average Sales Price
Average Rate
Annual Gross Commission Income
550
×
$330,000
×
2.86%
=
$5,190,900
A mere 10 percent increase in each category gives you an additional 33.1 percent increase in income.
A 25 percent increase in each pillar almost doubles your gross commission income (GCI) to $7,617,187. Again, quite simple and extremely rewarding. When you focus on this easy-to-use formula, you can see how you can increase your business 100 percent, 300 percent, or 1,074 percent, like we did in our business in one year.
It all starts with your client list. Your database is one of the most valuable assets within your business. Your focus must be on improving not only the quantity, but also the quality of your database. To do this, calculate the following:
- What is the average new client worth to you in GCI each time they transact business with you?
- How many times will that client buy and/or sell a home through you over a lifetime?
- How many referrals will they send to you over a lifetime?
In Chapter 3, we discuss how to "step on the scale" to see where your business currently stands and, later, how you can use all the tools available to you to improve your client numbers.
We also cover how you can strategically increase the volume of your average sales price. Scaling happens when you increase income without extra effort. When you need to scale to a neighboring market with a higher average, target higher-price-point communities in your current market, or take a deeper dive into your client database to start a new program specifically for luxury homes, we'll help you make the best decision for your business. There are many ways to increase your average sales price for your team. You will see many, many ways to do so as you read further in the book.
To complete your shift in perspective, we will offer strategies for creating the best value for your client. Price is what they pay, and value is what they spend their money on. Most consumers do not mind spending more money if they know that they are getting more in return. Not only will we be showing you how to increase your average GCI, but we will also open your mind to many profit centers that you have never thought of utilizing in your real estate business.
You will quickly see ways to get the most out of your real estate business without spending more money. We hope to point to ways to decrease your expenses while increasing your revenue for an explosion of net profit. You will see that you are just barely scratching the surface of all the possibilities and opportunities that live within your business.
You Are Selling Even When You Think You Aren't Selling
There is a meme online; maybe you have seen it. It says, "I'm not a real estate salesperson. I'm a matchmaker, and then I'm a wedding planner." I understand the sentiment behind the thought, but I completely disagree. And not just because my clients would be in big trouble if they counted on me to plan a wedding.
The truth is that everyone is in sales. Sure, you may have a license to sell real estate, but your responsibilities of selling do not end with the clients that you work with. At times, you also sell your kids on what to eat or your team on a new vision for the company.
There are two sets of clients in your real estate business. Your external...
