Reverse engineer your business

Hey all,

We are going to spend the next few weeks helping setup a plan for the new year.

This is the exact same process we use -- and in fact all top performers -- to achieve their goals. Today it's time to reverse engineer your business.

Before we jump in, you need to get some numbers. Nothing fancy, though.

All you need is:

• Target Monthly Income
• Average sales price in your market
• Average commission side %
• Your company split %

The first number you need is your Target Monthly Income.

We walked you through how to get this through dreamlining and even shared our personal spreadsheet last week. If you missed it somehow, shoot me an email and I can catch you up.

Many agents make the mistake here of just throwing down a number (ex. $100k) instead of taking a look at their expenses and the lifestyle they want to obtain.

But nothing is more disappointing than reaching a half-baked goal and then realizing that you shot too low.

The second number is the average home sales price. Grab this from your MLS.

Next, you need the average commission side percentage. Many MLSes do not combine this data for you, so you may have to estimate based on your market knowledge.

Then you will want to calculate your side of your broker split. For some of you, this is easy. For example, you are on an 80/20 split. You keep 80%.

Others are on a per-transaction model so you will have to do some basic math. Let's say you are charged $500 per transaction. You can easily convert this per-transaction fee to a percentage by figuring out the average commission (based on the average sales price and the commission side percentage) and then seeing what $500 is as a percentage of that average commission. Now that you have those numbers, the rest is easy. Plug them into our spreadsheet and it does the heavy lifting on the math for you.

Reverse Engineering Calculator (.xls)

The key number you are looking for is how many leads you need per month. Don't worry just yet about how to get those leads, for now knowing what you are shooting for is enough.

All the best,

Levi Jones

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