Matthew Ferrara, Philosopher
 

Revolutionary Business Planning for the Future

One of the most exciting roles our company plays for real estate brokers and agents worldwide happens when we are called upon to do Strategic Planning with them. It’s fascinating to see how planning energizes people – even though many of them have been operating for years without a written plan (:>) Here are some of our tips for your planning for the Future!

Usually, strategic planning starts out as  “pie in the sky” and then comes down to “I need to make this much revenue!” Somewhere in between, however, the process starts to become unnecessarily confused. Bogged down, is more like it, because too many brokers think strategic planning is about “beating themselves up” on what they aren’t doing well today. So the initial energy from planning starts to fizzle into anxiety and worry over mistakes and challenges. And usually, that’s why most people “stop” planning – or never start it in the first place.

So here are three tips we have used successfully to help brokers and agents use Strategic Planning to energize their companies and create themselves anew in the upcoming year.

1. There is No Spoon. In other words, stop planning to compete in THIS real estate marketplace and start thinking of the FUTURE. A strategic plan shouldn’t just be a bunch of “tweaks and improvements” on how to beat the current competitors – because that means you’re setting YOUR performance standards as only “slightly better” than your competitor’s plans. I am reminded of something about blind leading deaf or some such proverb…… Strategic Planning means looking beyond the limitations and conditions of today and CREATING the future by envisioning your success. Most strategic planning today is not much more than “How many listings do you have to take… how many calls do you have to send… how many postcards do you need to mail…. oh, yeah, don’t forget to do email….” Rubbish! The real estate success stories of the future will be built around companies who FORGET about the Spoon! Leave the “matrix” of current insanity – brokers recruiting people who have never sold anything since their childhood lemonade stands, agents doing mass mailings and denying the validity fo consumer research because of “past” successes, customers driving around with you in your car because the only photo you put on the listing was yet another bad toilet shot. Time to move ON – envision a future you can pursue – and that’s step 1 of Strategic Planning.

2. Work on Strengths, Not Weaknesses. Face it – you’re never going to overcome your weaknesses. Nope. No amount of training will make you “better” at anything you have no talent to do now. You can start practicing the piano today, but you’ll never become a great musician even if you put 20 years into it. It’s just TOO LATE. You ARE who you ARE (The Popeye Principle) and you can only be successful if you organize a business around your STRENGTHS. And your Strengths are NOT the opposite of your Weaknesses – they are just DIFFERENT. So here’s the plan: Figure out what you are GREAT at and arrange your business strategy so you can do that 100% perfectly 100% of the time. As for weaknesses, just stop doing whatever it is – and find someone with THAT talent – a partner or outsourcer or hire someone – to do it for you. Are you a great prospecter but a bad closer? Then arrange yourself to GENERATE business and then partner up with someone to CLOSE deals for you. Are you a great digital marketer but a terrible negotiator? Then stop trying to list homes, sell your services as a web-marketing-person to other listing agents and make BOTH business plans soar. Are you really good with people, but can’t do the paperwork to get closings to go smoothly? Hire an assistant or team up with a micro-manager-person who can’t list but can master the paperwork and the computer. Get a copy of “Discover Your Strengths” and read it. It will tell you more about a strengths-based approach to your business (and life). For now, just remember that it’s a MISTAKE to waste any time, money, effort on trying to “become great” at things you are fundamentally wired to do poorly; it is more EFFECTIVE to figure out what you do BEST and create a business plan that takes advantage of that strength. Remember, Tiger Woods stinks at sand traps – that’s why he PERFECTED his long drive to the green to AVOID getting in the sand in the first place!

3. Strive for Effectiveness, Not Busy-ness. As Peter Drucker said, all effective executives manage their TIME. This is critical for successful real estate practices of the future. If you don’t manage your time, you can’t manage your business. This pertains to how you handle customers, to how you operate your infrastructure, to how you manage your mind. Simple examples include controlling your schedule – such as using a Blackberry to manage email in small bursts rather than an hour or more throughout the day. Other examples include learning how to avoid or cut-loose clients who will simply consume more resources than they create in profits. It even applies to using technology effectively – such as planning how and when to blog (after hours!), versus sitting around all day “NiT-wit-tering” or other tech-time-wasters. What’s more effective – fine tuning your pay-per-click keywords on Google (zzzzz) or making one call to a past client who loves you and can refer you to three of their friends right now? You have to be effective, not just busy. Remember the story of NASA engineers who spent years trying to perfect a pen that would write in the zero-gravity of space – while the Russians simply used a pencil? The same lesson applies to being effective with your time and effort in sales. Stop “doing” things and start getting things done! It’s the hardest lesson to learn, but it’s ultimately the difference between “working” in real estate and Mastering it.

If you follow these three steps, the rest of your business plan falls into place. Don’t worry too much about a competitive analysis – because most agents and companies around you really aren’t that competitive. Otherwise, why did 25% of them simply drop out this year – with another 30% likely to do so next year, too? Your business plan does not have to “outsmart” the competitor – because it’s not a zero sum game. Every listing you lose doesn’t necessarily have anything to do with a competitor winning it. And basing your business plan on competitors is dangerous – rather than focusing on the future marketplace (one in which there is no spoon!) as the consumer wants it to be.

Two hints for brokers: Develop a set of standards of performance for your agents and communicate it to them. Then, only recruit people who can truly live up to them (and fire the rest). You can’t build a skyscraper if you’re still employing stonemasons.

Of course, if Numbers 1 to 3 aren’t in place, then it won’t make any difference how much planning you do. You’ll just be rehashing an old, 1970s business plan and substituting “blogging” for “printed newsletter.” That’s not a strategic plan, that’s triage, and many patients take the elevator down from the emergency room. It’s time for the real estate industry to evolve, which means it’s also time for their planning process to evolve, too. If you’re serious about practicing real estate (the next generation) it’s time to get serious about these three steps to creating it yourself!

Ka’Pla!
– Matthew

  • John Schumacher

    Hey, right on! Can’t tell you how many times company leaders and agents alike perceive “budgets” as “business plans”! Since so few are actually analytically (left-brain) wired, the painful thought of “crunching numbers” is the image that most often appears when they hear the words “business plan”. (Same for “strategic plan”), so planning of any type seldom happens! Strategizing is more about dreaming than budgeting. Organizing around one’s strengths is not the same as ignoring your weaknesses entirely. While many broker/owners and agents would be best served to hire someone to keep track of their numbers…learning to focus on results is an example of a strength that needs to be developed by all business leaders. I really like your comments about not settling for incremental improvement over one’s competitors! As for Tiger…he’s actually become a WORSE bunker player…dropping from 29th to 67th in sand saves…while becoming Player of the Year and World #1 for 2007!

  • John Schumacher

    Hey, right on! Can’t tell you how many times company leaders and agents alike perceive “budgets” as “business plans”! Since so few are actually analytically (left-brain) wired, the painful thought of “crunching numbers” is the image that most often appears when they hear the words “business plan”. (Same for “strategic plan”), so planning of any type seldom happens! Strategizing is more about dreaming than budgeting. Organizing around one’s strengths is not the same as ignoring your weaknesses entirely. While many broker/owners and agents would be best served to hire someone to keep track of their numbers…learning to focus on results is an example of a strength that needs to be developed by all business leaders. I really like your comments about not settling for incremental improvement over one’s competitors! As for Tiger…he’s actually become a WORSE bunker player…dropping from 29th to 67th in sand saves…while becoming Player of the Year and World #1 for 2007!

  • John Schumacher

    Hey, right on! Can’t tell you how many times company leaders and agents alike perceive “budgets” as “business plans”! Since so few are actually analytically (left-brain) wired, the painful thought of “crunching numbers” is the image that most often appears when they hear the words “business plan”. (Same for “strategic plan”), so planning of any type seldom happens! Strategizing is more about dreaming than budgeting. Organizing around one’s strengths is not the same as ignoring your weaknesses entirely. While many broker/owners and agents would be best served to hire someone to keep track of their numbers…learning to focus on results is an example of a strength that needs to be developed by all business leaders. I really like your comments about not settling for incremental improvement over one’s competitors! As for Tiger…he’s actually become a WORSE bunker player…dropping from 29th to 67th in sand saves…while becoming Player of the Year and World #1 for 2007!

  • Paul Gaddes

    Matthew, I am %100 in agreement with your Revolutionary Business Planning. However, there is an important piece (at least for me) that is missing (again, for me) and that is the execution of that planning. I was a very successful senior manager in corporate world for 20 plus years…transitioning into RE (almost a decade ago) was fun but my sales still lag. I am wired as a planner, with great (even others say this) management skills and vision; however, the daily, weekly execution of the task of running my own business is my weakest point. Any advice?

  • Paul Gaddes

    Matthew, I am %100 in agreement with your Revolutionary Business Planning. However, there is an important piece (at least for me) that is missing (again, for me) and that is the execution of that planning. I was a very successful senior manager in corporate world for 20 plus years…transitioning into RE (almost a decade ago) was fun but my sales still lag. I am wired as a planner, with great (even others say this) management skills and vision; however, the daily, weekly execution of the task of running my own business is my weakest point. Any advice?

  • Paul Gaddes

    Matthew, I am %100 in agreement with your Revolutionary Business Planning. However, there is an important piece (at least for me) that is missing (again, for me) and that is the execution of that planning. I was a very successful senior manager in corporate world for 20 plus years…transitioning into RE (almost a decade ago) was fun but my sales still lag. I am wired as a planner, with great (even others say this) management skills and vision; however, the daily, weekly execution of the task of running my own business is my weakest point. Any advice?

  • Matthew Ferrara

    Paul: The hardest thing about planning is STICKING TO IT once you’re done. We get distracted by opportunities and pop-up projects. I like to recommend Peter Drucker’s “The Effective Executive” because it’s a great way to focus on time management and your contribution requirements as a leader.

    Best wishes for 2009!

  • Matthew Ferrara

    Paul: The hardest thing about planning is STICKING TO IT once you’re done. We get distracted by opportunities and pop-up projects. I like to recommend Peter Drucker’s “The Effective Executive” because it’s a great way to focus on time management and your contribution requirements as a leader.

    Best wishes for 2009!

  • Matthew Ferrara

    Paul: The hardest thing about planning is STICKING TO IT once you’re done. We get distracted by opportunities and pop-up projects. I like to recommend Peter Drucker’s “The Effective Executive” because it’s a great way to focus on time management and your contribution requirements as a leader.

    Best wishes for 2009!

  • Rick Calanni

    Matthew, great commentary on the business planning for the future. Per John’s comments, it was obvious from my vantage point at corporate, one step removed from the field, that business planning was nothing more than a “I know,… I need to do this and I’ll get to it later” mentality among our customers. The problem is… nobody wants to work that hard in this business. God forbid we do research and evaluate lead conversions, advertising effectiveness or even their own standards of performance. My feeling is that if we can’t change behavior of our existing customers, we need to get a different breed of professionals into this industry to truly change the face of real estate. New blood that inherently understands the necessity of business planning and financial analysis.

  • Rick Calanni

    Matthew, great commentary on the business planning for the future. Per John’s comments, it was obvious from my vantage point at corporate, one step removed from the field, that business planning was nothing more than a “I know,… I need to do this and I’ll get to it later” mentality among our customers. The problem is… nobody wants to work that hard in this business. God forbid we do research and evaluate lead conversions, advertising effectiveness or even their own standards of performance. My feeling is that if we can’t change behavior of our existing customers, we need to get a different breed of professionals into this industry to truly change the face of real estate. New blood that inherently understands the necessity of business planning and financial analysis.

  • Rick Calanni

    Matthew, great commentary on the business planning for the future. Per John’s comments, it was obvious from my vantage point at corporate, one step removed from the field, that business planning was nothing more than a “I know,… I need to do this and I’ll get to it later” mentality among our customers. The problem is… nobody wants to work that hard in this business. God forbid we do research and evaluate lead conversions, advertising effectiveness or even their own standards of performance. My feeling is that if we can’t change behavior of our existing customers, we need to get a different breed of professionals into this industry to truly change the face of real estate. New blood that inherently understands the necessity of business planning and financial analysis.

  • Hi Matthew;
    I agree with what you have to say about MLS, Realtors, and Stragetic Planning. However, to make it work is almost beyond me. I would love to sell and work in the real estate industry as a professional, like for a fee for service or commission based, but with out the standard good ole boys club of all these organizations, like NAR, CAR (Colo. Association of Realtors). It would be nice to work on the level of Attorney or CPA, but in real estate. I received my CCIM designation hoping to elevate the “Practice of Real Estate” to a new level. So in short here I am all dressed up and no customer. I chose commercial real estate in this small town because very few know how to deal with commercial real estate and I hope it can become a “Stragetic Business Move”.
    Thanks

  • Hi Matthew;
    I agree with what you have to say about MLS, Realtors, and Stragetic Planning. However, to make it work is almost beyond me. I would love to sell and work in the real estate industry as a professional, like for a fee for service or commission based, but with out the standard good ole boys club of all these organizations, like NAR, CAR (Colo. Association of Realtors). It would be nice to work on the level of Attorney or CPA, but in real estate. I received my CCIM designation hoping to elevate the “Practice of Real Estate” to a new level. So in short here I am all dressed up and no customer. I chose commercial real estate in this small town because very few know how to deal with commercial real estate and I hope it can become a “Stragetic Business Move”.
    Thanks

  • Hi Matthew;
    I agree with what you have to say about MLS, Realtors, and Stragetic Planning. However, to make it work is almost beyond me. I would love to sell and work in the real estate industry as a professional, like for a fee for service or commission based, but with out the standard good ole boys club of all these organizations, like NAR, CAR (Colo. Association of Realtors). It would be nice to work on the level of Attorney or CPA, but in real estate. I received my CCIM designation hoping to elevate the “Practice of Real Estate” to a new level. So in short here I am all dressed up and no customer. I chose commercial real estate in this small town because very few know how to deal with commercial real estate and I hope it can become a “Stragetic Business Move”.
    Thanks

  • Matthew, this is a followup to my question to you of December 4, 2008 when I first read this article. I took your suggestion and downloaded the ebook by Drucker (Effective Executives)…Great read, great points and it gave me some answers to my questions about implementation. I have been tracking my time for a while now and yikes, how I have been suprised at just what I am “really” doing. Thanks for the recommendation.

  • Matthew, this is a followup to my question to you of December 4, 2008 when I first read this article. I took your suggestion and downloaded the ebook by Drucker (Effective Executives)…Great read, great points and it gave me some answers to my questions about implementation. I have been tracking my time for a while now and yikes, how I have been suprised at just what I am “really” doing. Thanks for the recommendation.

  • Matthew, this is a followup to my question to you of December 4, 2008 when I first read this article. I took your suggestion and downloaded the ebook by Drucker (Effective Executives)…Great read, great points and it gave me some answers to my questions about implementation. I have been tracking my time for a while now and yikes, how I have been suprised at just what I am “really” doing. Thanks for the recommendation.

  • Matthew Ferrara

    Paul: That’s fantastic! So glad you took my advice. Now, here’s the hardest part of learning lessons from Drucker: We have to stick to the process every day. Whether we’re managing others or managing ourselves, we can’t be effective if we just “do it once” and then float back into ineffectiveness. So I encourage you to continue to track your time – you might move from daily/weekly to a monthly review, but keep doing it.

    Best wishes for 2009!
    Matthew

  • Matthew Ferrara

    Paul: That’s fantastic! So glad you took my advice. Now, here’s the hardest part of learning lessons from Drucker: We have to stick to the process every day. Whether we’re managing others or managing ourselves, we can’t be effective if we just “do it once” and then float back into ineffectiveness. So I encourage you to continue to track your time – you might move from daily/weekly to a monthly review, but keep doing it.

    Best wishes for 2009!
    Matthew

  • Matthew Ferrara

    Paul: That’s fantastic! So glad you took my advice. Now, here’s the hardest part of learning lessons from Drucker: We have to stick to the process every day. Whether we’re managing others or managing ourselves, we can’t be effective if we just “do it once” and then float back into ineffectiveness. So I encourage you to continue to track your time – you might move from daily/weekly to a monthly review, but keep doing it.

    Best wishes for 2009!
    Matthew

  • I have been working the last 2 months on my own business plan (the first time I’ve commited to putting one in writing) and with all of my broker associates on theirs, and we’ve all been struggling. We recognize a plan, and peferrably a written one, is crucial, but as you say, Matthew, there are so many variations and thoughts on what a plan should be. This really simplifies it and yet covers the 3 most critical areas we all should focus on. We’ve been emphasing in my office the need to focus on and engage in those activities that bring results, and the results will come. This article is a nice affirmation of that approach, but offers further direction toward operating from our strengths, implementing and keeping at the plan, and managing time effectively. In sum, no one plan fits all, but these 3 points apply to all. I’m sharing this will all of my agents who are still “fine-tuning,” if not struggling to start, their 2009 business plans. Thanks.

  • I have been working the last 2 months on my own business plan (the first time I’ve commited to putting one in writing) and with all of my broker associates on theirs, and we’ve all been struggling. We recognize a plan, and peferrably a written one, is crucial, but as you say, Matthew, there are so many variations and thoughts on what a plan should be. This really simplifies it and yet covers the 3 most critical areas we all should focus on. We’ve been emphasing in my office the need to focus on and engage in those activities that bring results, and the results will come. This article is a nice affirmation of that approach, but offers further direction toward operating from our strengths, implementing and keeping at the plan, and managing time effectively. In sum, no one plan fits all, but these 3 points apply to all. I’m sharing this will all of my agents who are still “fine-tuning,” if not struggling to start, their 2009 business plans. Thanks.

  • I have been working the last 2 months on my own business plan (the first time I’ve commited to putting one in writing) and with all of my broker associates on theirs, and we’ve all been struggling. We recognize a plan, and peferrably a written one, is crucial, but as you say, Matthew, there are so many variations and thoughts on what a plan should be. This really simplifies it and yet covers the 3 most critical areas we all should focus on. We’ve been emphasing in my office the need to focus on and engage in those activities that bring results, and the results will come. This article is a nice affirmation of that approach, but offers further direction toward operating from our strengths, implementing and keeping at the plan, and managing time effectively. In sum, no one plan fits all, but these 3 points apply to all. I’m sharing this will all of my agents who are still “fine-tuning,” if not struggling to start, their 2009 business plans. Thanks.