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How do I add value to the How do I solve a specific clients I serve? pain for which clients are willing to pay a premium? Potential market share Risk vs. reward and profitability analysis: analysis: Is my target market large enough? Is there a high return on investment? Is there growth potential? Strong/early/sustainable cash flow? High profit margin?Source: Timmons, J. and Spinelli, S. (2007) New Venture Creation: Entrepreneurship in the 21st Century, 7th Edition, McGraw Hill.
Chung Phan is a Vietnam native who immigrated here after graduating with a masters degree incomputer engineering. He is 46 years old with a wife and3 children. He works as a systems analyst at Comco, and earns $92,346 per year. He lives in Stonewood I interact with Chung at church Springs, plays golf and loves technology. and local civic organizations. I will build trust by becoming the first Vietnamese-speaking agent in our community, and I will work hard to become a credible professional in my community by being active in it.
SWOT analysis of competitor Mark Witherspoon Mark is a recognized, high Mark does not speak producing professional who Vietnamese and is not active has marketed and sold to in our community. several Vietnamese families. I have the opportunity to win Mark has sold to some in the market share from Mark by community and has a lot of relating to the Vietnamese resources to advertise community by speaking should he decide to market their language and being a more heavily. He could even part of it. invest in having a translator.
•Broker•Lender•Coach•Closing attorney•Inspectors•Contractors•Sphere of influence•Referring closed clients
• What are my major business goals? • Short-term • Mid-term • Long-term• How will my business change?• Are there buyout opportunities?
For agents, this has to be very specific.Keep a strategic daily calendar defining your workhabits and what specifically you will do.Know your waterfall:75 sales calls = 1 appointment3 appointments = 1 signed listing/buyers agreement2 signed agreements = 1 ratified contract1.5 ratified contracts = 1 closed transaction
Know your cash flow.Monetize all costs into each closed transaction. $12,000/yr marketing + $3,000/yr franchise fee + $600/yr E&O insurance + $4000/yr office/gas/business $19,600 total expenses divided over 18 transactions in 2012 $1,089 per transaction
Know your cash flow.Using this method, subtracting “cost of goods”expenses from each transaction gives me mypositive, pre-tax cash flow projections.Example:I close as the buyer’s agent on a $200,000 homeoffering 3% to the buyer’s agent. I grossed $6,000.I split 40% with my broker, I’m left with $3,600.$3,600 - $1,089 (Cost of goods) = $2,511 profit.
What is my product? • Service : how do I market myself? • Listing : how do I market my listing?Who is my target?What medium does my target consume?
Get specific about your waterfall.• Where do continued flow of clients come from?• Provided the waterfall works as projected, how does that translate to profitability?75 calls = 1 appointment3 appointments = 1 agreement signed2 signed agreements = 1 ratified contracts1.5 ratified contract = 1 closingAverage home price is $200,000Cost of doing business = $1,089 per transactionTake home $2,511 per transaction with current broker split
What is my breakeven?• The point at which I have all my bills paid, and I become profitable.What is my profitability time projection?• How long before my initial investment is returned?• How many sales must I make to breakeven?• How many sales must I make to meet my profitability projections?
Be able to explain in 15 minutes in simple terms:• Industry problem and your solution• Size and viability of your specific market• Technology plan• Your competitive advantage• Your team• Operating strategy• Your financials• Your breakeven and profitability projections