REAL ESTATE B-SCHOOL HIGHLIGHT: 7 Forces of Business Mastery and Transitioning Out of Production

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Transcript:

Let's look quickly at the 7 Forces of Business Mastery. This is the basis for Tony Robbins's Business Mastery 1 and Business Mastery 2, which are a few of his most exclusive and expensive products. I think I spent $20 Grand on Business Mastery 1 and Business Mastery 2, and that was on top of the $10 Grand to get to Fiji for Business Mastery 2.

It gave me a really cool framework for how I need to organize my time, my thought process, and what's important in my business. There are 7 Forces of Business Mastery, and I'm going to take you through them. These are things you need to consider as you're getting out of production and becoming the business owner - the person that's steering the ship and steering the future of your company.

The Only 3 Ways to Grow a Business

The first is creating an effective business map. This is based on Jay Abraham's "3 Ways to Grow Your Business." You have access to this in your Google Drive, and I've set this up in a way where you can do different scenarios. There are only 3 ways to grow a business. One is to increase the number of clients you serve. Two is to increase the transaction value for each client by adding more value. In real estate we can increase the sales price or the commission percentage. So you can go over high price-point homes, buyers and sellers, or you can increase the commission rate you have.

Number three is to increase the frequency at which your clients buy. In real estate, this is through referral and repeat business.

So in 2013 we did around 320 sides. Our average price point in 2013 was $237,000. Our commission rate was around 3.1%, and then there's a trick with the referral rate that I'll show you. These give you different scenarios. So say we only grew our transaction size by 10%. Say we got to 352 sides this year, but we increased our average sales price 6%. Our commission rate - we'll call it a modest increase, doing a better job of getting a higher commission on the buyer side and the seller side. Finally, on average, we'd increase our referral rate from 1% to 1.1%.

Those changes would lead to a 33% gain in our business. So our total growth would be 33%, going from $2.3 Million in sales to $3.0 Million. All by increasing our average price, our average commission, doing better on referrals, and increasing the number of sides.

This is a tool you can play with, realizing that a little change in each of these areas can make a big change overall.

The 2nd Force of Business Mastery is Constant Strategic Innovation. We know the industry is changing in big, big ways, and the question is how will you respond? Some of it's technology, some of it's marketing, and some of it's systems and how you deliver your services. But just be aware that you have to constantly innovate. This doesn't mean you need to change CRMs or get different websites or any of that. But just know that our market, our consumers, are becoming more savvy and they're expecting more from us as real estate professionals.

Out-Marketing Your Competition

Number 3 is constant and never ending improvement. That CANI, that's a Tony Robbins term. Constant and Never Ending Improving of World Class Marketing. You have to out-market your competition. This is one of the activities that I have not let go of in my company. The marketing we do is extremely dollar productive.

Then sales mastery, we talked about this - the pipeline and the 5 Key profit drivers I just went through (Lead > Appt > Client > Closing > Raving Fan). Number 5 is constant anticipation: the power of financial analysis. I'll get into this more here in a second. Number 6 is constant optimization and maximization. That is always looking to optimize and maximize people, culture, processes, and execution. Number 7 is constantly creating raving fans and culture, and I'll cover more on that as well.