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You’re listening to the Focus Radio with Alyssa Granlund. My goal is to share some tips and ideas to help you grow a thriving and healthy real estate business that you love.

Today we are going to talk about the top 10 reasons that small businesses or real estate agents don’t make it. Are you set up for success in your business?

I have a corresponding self-quiz for you that you can pick up when it’s convenient to help you rank your business on this topic.

You can find it at alyssagranlund.com/86  

This is my 86^th podcast hence the 86! I have lots of other tools and resources there for you as well @ alyssagranlund.com Check it out.

I don’t want to be negative but I want to point out some of the things that come up for people and where people run into trouble so that you can do a skill evaluation to see where you rank and how you’re doing in these areas. Because unfortunately in our industry, we have about an 80% failure rate and 20% success rate in real estate. So 20% of people in the business are earning the kind of money they want and running a great business that they really love and feel happy about. 80% of the people are unhappy, they feel stressed and feel like they’re not working up to their potential or getting or fulfilling the dreams that they had when they first came into the business.

So here are the top 10 things that come up that cause the problems and according to Harvard Business Review, are the top 10 reasons that small businesses fail. I believe as real estate agents that we are entrepreneurs. We are running a small business and we have to look at it that way. We have to put on our CEO hat and examine our business that way instead of just working in the business. We have to take time to work on it.

Reason Number One – Lack of Systems.

Where this comes up for us as real estate agents is it means that we don’t have systems in place to take care of the repetitive routine work. We’re doing it ourselves every week and we also are not spending time on the high dollar, high value work – the money making activities. We’re spending time on the low value, low dollar work that are the dollar supporting activities. So the agents who really make a lot of money in this business, they are aware of this and they have systems in place and people to help to take care of the things that aren’t actually bringing money in the door. Do you have systems set up for processes that you do repeatedly? Your listing process, your lead follow up process, your marketing calendar for the year, your listing communication process. If you have an admin do you have an office manual in place that is routinely updated? Do you have checklists for when you take a new listing or checklists when you make a new sale? All of these processes and systems will help to streamline things and help you be more efficient.

Rank yourself, one to 10. How do you feel you’re doing on systems? Do you feel very systemized in your business.

Reason Number Two – Lack of Vision or Purpose

The number two reason that small businesses don’t make it or real estate agents as entrepreneurs don’t make it, is lack of vision or purpose. I think this is true. I think that vision also would equate to some goals and figuring out where it is that you want to go. What the dream is now, this month, this year, three years from now, five years from now. Where is it that you’re trying to go? And what’s the reason for it. What’s your purpose. If it’s just to earn money then what happens is we get burned out pretty fast because this business is so all-consuming and if you don’t have a passion for what you’re doing or at least if your business isn’t supporting a passion that you have, then we can really run into trouble there. So do you have a vision identified or goal or where you want to go and then do you also understand what your “why” is.

Reason Number Three – Lack of a Financial Plan or a Budget.

This is a big one and this is where we, as real estate agents get into big, big trouble and that is that we live on our gross income. Instead of considering that we have expenses – marketing expenses and business expenses. We also have our taxes that we need to pay. So April 15th I have … As I’m coaching agents, many times agents will tell me that they had a bigger tax bill than they were expecting and they hadn’t set money aside.

That’s something that we really as an industry need to work on. We have to really put on our CFO hat there and think about our financial plan and our budget and we need to live on our net income, not our gross income. So how are you doing there? Do you when you think about income, do you take your gross, like say a $100,000 a year and say, “I earn $100,000 a year,” and then spend it as if you are … As you make a $100,000 a year. Or do you live on your net. Do you take out that 30% that probably you should be spending on your business to grow it, and then another, probably depending on where you live but where I am, 35% tax bracket. That gets us down to that 65% right off the top so are you living on that net or are you living on the gross. Give yourself a score there, one to 10.

Reason Number 4 – Lack of Dependability.

All right, this also is a big one. We get into the business because we’re so excited about the freedom and the possibilities. But really the freedom is big. I know that my number one core value is feeling free and feeling in control of my destiny. But I learned pretty early on that I needed to really be dependable and I needed to show up for work and I needed to live by a schedule. I had to be dependable. Otherwise that income was not going to be dependable. So how are you doing on that? Are you living by a schedule. Are you giving yourself or giving your business the time that it deserves or are you able to say to your family, “I work Monday through Friday from 9:00 until 6:00,” or whatever the time is so that people aren’t calling you asking you to take care of things because you don’t officially have a j-o-b. Right? So a lot of times people lean on us thinking that we are available. Again, that’s dependability toward your family but I’m talking about dependability towards our business.

Are you being dependable towards your business. Give yourself a score

Reason Number 5 – Poor Marketing.

 Now this is also a big issue for us. If you don’t have four or five areas that you’re looking at to grow your business, you’re going to be in trouble. I did an earlier podcast on this and if you want to look for it, it was called Getting Clear on Who it is That We Serve. But the marketing piece is huge. We have to have four or five areas that we are marketing to and we have to have a strategic marketing plan in place for each of of those areas. Why this is important is because number one, we need our marketing to hit the mark. We need to attract the clients that we want and then number two, we’ve have watch our budget. I think one of the things that happens in real estate is that we have a lot of people coming at us with lots of great ideas about where we could spend our money and sure, most of them could work if we really focused on them. But what happens is we get torn in so many direction and are bleeding all of this money out and we really don’t give each one of those the strategic marketing plan that they need and then our marketing isn’t really hitting the mark. Okay? So poor marketing.

How are you doing there? Do you feel like you have a marketing budget set aside. Do you have an overall marketing plan. For the 12 months of the year. Do you have a marketing plan for each of the verticals that you’re trying to work. Okay? Give yourself a score one to 10.

Reason Number Six – Failure to Set Goals.

Okay we talked about this a little bit within the vision and the purpose section. Goals are so important. Not only the income goals but we need to be able to track our numbers. How many appointments do we need to go on in order to get a listing or how many buyers do we need to meet with in order to work with a buyer. How much prospecting do we need to do to get a listing appointment? We need to keep track of those things and know our numbers because then we can set our goals and we can actually support those goals. So for instance, if I am working online leads then I know that it may take up to 100 online leads to meet one able and willing buyer. So I have to be able to respond and talk with 100 of these leads. Once we know what our numbers are, we can improve our conversion rates. Once we figure out what that is, but we have know where we are at now so that we can get from 100 down to 75.So that may be a goal we have to improve our conversion. Setting goals is huge. So do you have your goals set for this year. Do you have a business plan. You don’t need a full blown business plan as a real estate agent but you do need one that talks about your goals, your prospecting, clarity of your vision and your purpose.

We would need a full blown business plan id we were trying to get a loan or something like that but we’re not. We’re trying to work our business. So do you have a plan in place to look at. I will be doing a call on this shortly to help you. It’s going to be a short form business plan to help you to figure this out. Okay. Give yourself a score on your goals.

Reason Number Seven – Competition.

In real estate yes, we do have competition and sometimes this has to do with the broker that we’re with. I was with a real small broker at one point and I found that when I moved to the larger broker, for me in my market, it was better for me to be able to compete. But you have to look at where is the competition. Where are you getting beat up. If you’re losing listings how is the competition taking them from you. What are they doing, what are they offering. We really need to be aware of what our competition offers and how we as agents can compete with that. Then when we know what the competition is offering we want to make sure that we get that dialed in on our buyer presentation or our seller presentation so that we can really compete. So that we can beat out the competition and someday everyone’s looking at us thinking, what the heck is he or she doing? They see is as fierce.

So how do you feel you’re doing against the competition and do you know what the competition offers and do you even know who your competition is. Okay. Give yourself a score one to 10.

Reason Number Eight – Inadequate money supply.

All right, this comes up when again we don’t have a plan. We don’t have a financial plan in place. Because of that when we get the chance to take, let’s say an upper bracket, a high end listing, all of sudden we start shaking in our boots because we don’t want to spend three grand, four grand, five grand, on the marketing because we don’t have it and we’re going to have to put it on credit card. Then who knows if the home will sell. So then of course we panic and we don’t know what to do. That would be one example of inadequate money supply. Another example is you don’t have enough to pay your bills and so you’re dipping into a credit line or credit cards to pay your bills. If that’s what’s going on, then we’ve got to get a grip on that. We have to figure out how we can even this out for you and that’s going to come down to having a financial plan in place, taking a look at living by your net and also maybe raising your goals a little bit on your prospecting so that we can get you in front of more people. How are you doing on money. Do you have enough at the end of the month to stash a little away for yourself in savings, in retirement. Are you stashing money in a tax account. How you doing there? Give yourself a score. One to 10.

Reason Number Nine – Lack of Focus.

This is so true too for realtors. We have a big issue with this. We have all these wonderful, bright and shiny objects that we can participate in and also we want to do everything that everybody is doing. We have that fear of missing out. Or maybe we think that something’s going to be a magic pill. But there’s no magic pill. Anything that you choose to do is going to take time, effort, energy and money. So what I want you to do is go back and listen to Getting Clear on Who it is That We Serve, and I want you to pick your four or five areas, so that you can be strategically and laser focused on serving four or five different verticals or niches really, really well. Because if you try to do everything that everybody’s doing, you’re not going to do anything very well.

Also if you look around the office, I hate to say it but 80% of the people in your office probably aren’t making any money. We don’t want to be doing what 80% of people are doing. We want to be doing what the top 20% are doing and that is that they’re strategically focused on certain market segments that they serve. Okay. So how are you doing on that? Do you feel focused? Do you have your four or five areas that you can serve. And you don’t want one or two, it’s not enough. We need to diversify, we need to have four or five. Okay. How are you doing there? Score yourself One to 10.

Reason Number Ten – Concentrating Too Much on the Technical Side.

For us in real estate, that’s true. We want to use all these technical tools. We want to run Facebook ads, we want to be on social media we have to learn software and how to use our CRM and I think that sometimes we focus on learning how things work so we can implement them and days can go by without any prospecting activities.  

 Also where I think this seriously applies to us is focusing too much on these activities that are not dollar generating.

I call these housekeeping activities. They’re things like file maintenance. Which we need to do, I know. But it’s focusing on things that are not earning us money. We have a stack and a pile and we get it done and we feel like we accomplished something but we didn’t earn any money. So it’s focusing on those activities that are not dollar generating.

Another issue this could come up is working on your Database. You need your database, we all know we need a good database and we need to be able to stay in touch with our list. But maybe you’re focusing too much time on getting everyone into a program or spending too much time trying to learn how to use a program. We need to be supporting the four or five activities that we are trying to focus on to earn money and that’s where we focus most of our efforts. 70% of our efforts every day really have to be on those money making activities, those MMA’s. Remember your money making activities. The other activities are dollar supporting, I know they’re important but as soon as you can, get somebody else to take those dollar supporting activities off your plate even if it’s five hours a week.

My last thought on this one, I want you consider if you spend enough time working on your business? Or are you working in your business always as the technician? If you haven’t yet, Read the eMyth by Michael Gerber for more on this concept

Make sure you make the time to put on your CEO hat and see if your business is running efficiently. Use the self quiz I am will offer to you on my website to help you.

So these are the top 10 reasons that small businesses or real estate agents don’t make it or don’t get the results they are looking for in their businesses.

My challenge to you today is to take some time to think about this for you. I want you to really be honest with yourself and I want you to give yourself a score on each one of these items. That you can discover is you have any that need attention right now.

Then just take them one by one and I’ll be diving into these each a little bit deeper on future podcasts.

 If you want a copy of this list and a self quiz to rank yourself, go ahead and go to my website for the show notes, transcript and quiz at alyssagranlund.com/86

I also have lots of other tools and resources available for you there at alyssagranlund.com

 Thanks so much for tuning in and I’ll look forward to talking to you again soon. Have a wonderful day.

Stay focused!