1. MREA: Business Planning Clinic
Instructor's Notes
11/9/2018
MREA: Business Planning Clinic
For the Millionaire Real Estate Agent
Keller MREA Business Planning Clinic Jan 2004

2. Introduction 1 Objectives Ground Rules What you will learn
Instructor's Notes
11/9/2018
Introduction
Objectives
Ground Rules
What you will learn
How you will learn 1
Keller MREA Business Planning Clinic Jan 2004

3. Ground Rules 2 Arrive on time Form groups quickly
Instructor's Notes
11/9/2018
Introduction
Ground Rules
Arrive on time
Form groups quickly
Limit side conversations
Turn off cell phones
Be comfortable
Respect time
Respect each other
Help eacho
Respect confidentiality
Have fun! 2
Keller MREA Business Planning Clinic Jan 2004

4. What You Will Learn 3 Goal: Identify 1-year, 3-year, 5-year goals
Introduction
What You Will Learn
Goal:
Identify 1-year, 3-year, 5-year goals
Create a business plan for your 1-year goals 3

5. What You Will Learn 3 The Why of Millionaire Models The Economic Model
Introduction
What You Will Learn
The Why of Millionaire Models
The Economic Model
The Lead-Generation Model
The Budget Model
The Organizational Model
Goal Setting
Focus 3

6. How You Will Learn 4 Action Oriented Training Participate Observe
Instructor's Notes
11/9/2018
Introduction
How You Will Learn
Action Oriented Training
Participate
Observe
Create a business plan
Create an action plan 4
Keller MREA Business Planning Clinic Jan 2004

7. Peer Partner Exercise 3 hobbies or activities Mingle!
Introduction
Peer Partner Exercise
3 hobbies or activities
Mingle!
Identify your peer partner
Define accountability
5-6

8. Chapter 1: The Why of Millionaire Models
Instructor's Notes
11/9/2018
Chapter 1: The Why of Millionaire Models
Objectives
Identify the value of models
Identify the 6 MythUnderstandings
Define how to think like a Millionaire Real Estate Agent
Define the 4 fundamental models of a Millionaire Real Estate Agent 7
Keller MREA Business Planning Clinic Jan 2004

9. The Importance of Modeling
Chapter 1: The Why of Millionaire Models
The Importance of Modeling
Model: A pattern … an example
Success leaves clues. So does failure.
People have lived before us. 8

10. Creativity 9 Implementation before Innovation!
Chapter 1: The Why of Millionaire Models
Creativity
Implementation before Innovation! 9

11. Chapter 1: The Why of Millionaire Models
Achievement 10

12. Begin with the End in Mind
Chapter 1: The Why of Millionaire Models
Begin with the End in Mind
Think Big!
Aim High!
Big goals pull you through your smaller goals.
Climb the mountain! 11

13. The 6 Mythunderstandings
Instructor's Notes
11/9/2018
Chapter 1: The Why of Millionaire Models
The 6 Mythunderstandings
MythUnderstanding
Truth 1
I can’t do it.
Until you try, you can’t possibly know what you can or can’t do. 2
It can’t be done in my market.
Yes it can, but you may need a new approach. 3
It would take too much time and effort—I would lose my freedom.
Time and effort are not the deciding factors in success. 4
It’s too risky—I’ll lose money.
Risk is in direct proportion to how well you hold your incremental costs accountable to producing incremental results. If you hire people without having a business plan, it’s very risky. 5
My clients will only work with me—only I can deliver quality service.
Your clients aren’t loyal to you; they are loyal to the standards you represent. 6
Having a goal and not fulfilling it is a negative thing.
Having a goal and not trying to achieve it is a negative thing. Not trying is failing. Whenever you try you either succeed or learn. 14
Keller MREA Business Planning Clinic Jan 2004

14. The 9 Ways an MREA Thinks 13 Powered by a Big Why
Chapter 1: The Why of Millionaire Models
The 9 Ways an MREA Thinks
Powered by a Big Why
Big Goals and Big Models
Possibilities
Action
Without Fear
Progress
Competitively and Strategically
Standards
Service 13

15. Chapter 1: The Why of Millionaire Models14

16. Chapter 2: The Economic Model
Instructor's Notes
11/9/2018
Chapter 2: The Economic Model
Objectives
Define the numbers in the MREA Economic Model
Create your economic model 15
Keller MREA Business Planning Clinic Jan 2004

17. Chapter 2: The Economic Model
MREA Economic Numbers 16

18. MREA Economic Numbers 16 Definitions Gross Closed Income (GCI)
Cost of Sales (COS)
Operating Expenses
Net Income 16

19. Average Sales Price/Conversion Rates
Chapter 2: The Economic Model
Average Sales Price/Conversion Rates
Average Sales Price
Assumption in the model: $250,000
Makes a difference in closed units required
Conversion Rates
Appointments to Listings
Listings to Sales
16-17

20. Your 3 Key Focus Areas 18 Focus on Numbers You Must Hit Appointments
Chapter 2: The Economic Model
Your 3 Key Focus Areas
Focus on
Numbers You Must Hit
Appointments
Conversion Rates 18

21. Chapter 2: The Economic Model
The Numbers to Hit 18

22. If you don’t have appointments,
Chapter 2: The Economic Model
Focus on Appointments
If you don’t have appointments,
nothing else happens.
Last year…
How many seller appointments?
How many buyer appointments? 19

23. Focus on Conversion Rates
Chapter 2: The Economic Model
Focus on Conversion Rates
If you have appointments…
How many become clients? …
How many become sales? 20

24. Conversion Rate Benchmarks
Chapter 2: The Economic Model
Conversion Rate Benchmarks 21

25. 22 The Economic Model $1,000,000 Net Income (before taxes) $2,400,000
Chapter 2: The Economic Model
The Economic Model
$1,000,000
Net Income (before taxes)
$2,400,000
Gross Closed Income (GCI)— divide net by .416
$700,800
Cost of Sales (29.2% of GCI)
Operating Expenses (29.2% of GCI) 22

26. 22 The Economic Model  3% = 65% 80% $1,200,000 $40,000,000 $250,000
Instructor's Notes
11/9/2018
Chapter 2: The Economic Model
The Economic Model
$1,200,000
Gross Revenue from Sellers
Gross Revenue from Buyers  3%
Commission =
$40,000,000
Seller Sold Volume
Buyer Sold Volume
$250,000
Average Sales Price
Average Sales Price
160
Sellers Sold
Buyers Sold
65%
% Conversion Rate
80%
% Conversion Rate
246
Seller Listings Taken
200
Buyer Listings Taken
308
Seller Listing Appointments
Buyer Listing Appointments 22
Keller MREA Business Planning Clinic Jan 2004

27. Your Economic Model Goal Average Sales Price Conversion Rates
Chapter 2: The Economic Model
Your Economic Model
Goal
Average Sales Price
Conversion Rates
Seller Appointments to Listings
Buyer Appointments to Listings
Seller Listings to Sales
Buyer Listings to Sales
Average Commission
Create Your Model Now!
23-24

28. Chapter 3: The Lead-Generation Model
Instructor's Notes
11/9/2018
Chapter 3: The Lead-Generation Model
Objectives
Define the numbers in the MREA Lead-Generation Model
Create your lead generation plan 25
Keller MREA Business Planning Clinic Jan 2004

29. Your 3 Key Focus Areas 26 Prospect and Market.
Chapter 3: The Lead Generation Model
Your 3 Key Focus Areas
Prospect and Market.
Set Up a Database and Feed It.
Systematically Market to Your Database.
Leads are fuel to your economic engine. 26

30. Prospect and Market 27 Chapter 3: The Lead Generation Model
General Public Haven’t Met Group
Target Group Haven’t Met Group
Network Met Group
Allied Resources
Advocates
Core Advocates 5 50
100
1,765
16,000
At large
8 by 8
33 Touch
12 Direct
1 on 1
HAVEN’T MET
MET
(Inner Circles) 27

31. Set Up a Database and Feed It
Chapter 3: The Lead Generation Model
Set Up a Database and Feed It 28

32. Systematically Market
Chapter 3: The Lead Generation Model
Systematically Market
Action Plans
8x8—to cement a new contact
33 Touch—ongoing after the 8x8
12 Direct—to your Haven’t Mets
Real estate sales is a contact sport. 29

33. Lead Generation Ratios
Chapter 3: The Lead Generation Model
Lead Generation Ratios
The Research
Mets: 2 net sales from 12
Haven’t Mets: 1 net sale from 50
For 320 Sales
Mets only: 1,920
Haven’t Mets only: 16,000
50/50: 960 Met, 8,000 Haven’t Met 30

34. MREA Lead Generation Numbers
Chapter 3: The Lead Generation Model
MREA Lead Generation Numbers
Strategy
Prospecting Based
Marketing Enhanced
Assumptions (Marketing Costs)
Lead generation costs = 10% of GCI
Average cost of a “touch” = 50¢
31-32

35. Cost of a Lead Gen Program
Chapter 3: The Lead Generation Model
Cost of a Lead Gen Program
Mets
12 people (396 touches) = 2 sales
1 sale = 198 touches
@ 50¢, 1 sale = $99
For 320 sales, cost is $31,680/year
Haven’t Mets
50 people (600 touches) = 1 sale
@ 50¢, 1 sale = $300
For 320 sales, cost is $96,000/year 32

36. Focus on Seller Listings
Chapter 3: The Lead Generation Model
Focus on Seller Listings
A properly marketed seller listing will consistently yield one or more buyer sales. 33

37. The Lead Generation Model
Chapter 3: The Lead Generation Model
The Lead Generation Model
Option 1: Mets Only
Sales Goal * 12/2 = _________ contacts
Option 2: Haven’t Mets Only
Sales Goal * 50 = _________ contacts
Option 3: Combination
__% Goal * 12/2 = _________ contacts
__% Goal * 50 = _________ contacts 34

38. Your Lead Generation Model
Chapter 3: The Lead Generation Model
Your Lead Generation Model
Which option will you choose? Mets? Haven’t Mets? Both?
How are you doing now?
Contacts to Be Generated
MET
HAVEN’T MET
Goal Numbers
- Current Numbers
= People I Need to Add
Monthly Additions 35

39. Your Lead Generation Model
Chapter 3: The Lead Generation Model
Your Lead Generation Model
Choose Your Sources
Lead Sources 
Mets/Sphere/Past Clients
Apartments
Door Knocking in Farm
Builders
Open Houses
Networking
Sign Calls
Seminars
For Sale by Owners (FSBOs)
Sponsorships
Expired Listings
Advertising
Website Registrations
Banks
Social Media
IVR
Allied Resources
Client Parties
Direct Newsletters
Just Sold Mailings
Just Listed Mailings
Agent Referrals 36

40. Chapter 4: The Budget Model
Instructor's Notes
11/9/2018
Chapter 4: The Budget Model
Objectives
Define the numbers in the MREA Budget Model
Create your budget plan 37
Keller MREA Business Planning Clinic Jan 2004

41. Your 3 Key Focus Areas 38 Lead with Revenue
Chapter 4: The Budget Model
Your 3 Key Focus Areas
Lead with Revenue
Play Red Light, Green Light
Stick to the Budget 38

42. Make money before you spend it.
Chapter 4: The Budget Model
Lead with Revenue
Make money before you spend it.
Minimize start up costs
Generate revenue before incurring expenses 39

43. Play Red Light, Green Light
Chapter 4: The Budget Model
Play Red Light, Green Light
Hold your money accountable.
When you spend, evaluate the results
Set a specific time period
If there isn’t a return, stop spending! 40

44. Percentages should remain stable.
Chapter 4: The Budget Model
Stick to the budget
Percentages should remain stable. 41

45. Stay in touch with your spending.
Chapter 4: The Budget Model
Natural Rhythm
Keep a monthly budget.
Examine it weekly.
Stay in touch with your spending. 42

46. MREA Budget Numbers 43 Cost of Sales (COS) Seller Specialist
Chapter 4: The Budget Model
MREA Budget Numbers
Cost of Sales (COS)
Seller Specialist
Usually on salary
4.4% of GCI
Buyer Specialist
Usually on a commission split
24.8% of GCI
Total COS = 29.2% 43

47. MREA Budget Numbers (continued)
Chapter 4: The Budget Model
MREA Budget Numbers (continued)
Operating Expenses
The Big Two
Salaries (administrative) 12.0%
Lead Generation %
All others—2% or less
Total Operating Expense = 29.2% 44

48. 45 Your Budget Model Chapter 4: The Budget Model COST OF SALES MREA
$$ based
My Budget Plan $$
% of GCI
on MREA
Seller Specialist(s)
100,000
4.2%
Buyer Specialist(s)
600,000
25.0%
Other COS
minimal
Total COS
700,000
29.2%
Your Budget Model
OPERATING EXPENSES
MREA
$$ based
My Budget Plan $$
% of GCI
on MREA
Salaries
288,000
12.0%
Lead Generation
220,000
9.2%
Occupancy
48,000
2.0%
Technology
36,000
1.5%
Phone
24,000
1.0%
Supplies
Education
Equipment
Auto/Insurance
12,000
0.5%
Total Operating Expenses
700,000
29.2%
Total Expenses
1,400,000
58.4% 45

49. Chapter 5: The Organizational Model
Instructor's Notes
11/9/2018
Chapter 5: The Organizational Model
Objectives
Define the numbers in the MREA Organizational Model
Create your organizational plan 47
Keller MREA Business Planning Clinic Jan 2004

50. The Path to People Leverage
Chapter 5: The Organizational Model
The Path to People Leverage 48

51. If you don’t have a maid …
Chapter 5: The Organizational Model
When do you hire?
If you don’t have a maid …
you are one.
Is your time better spent on other things (like lead generation)?
Does your budget permit additional expense? 49

52. Hiring Path Hire administrative help Add a Buyer Specialist
Chapter 5: The Organizational Model
Hiring Path
Hire administrative help
Add a Buyer Specialist
Complete your administrative infrastructure
Add a Seller (Listing) Specialist
50-51

53. Your Organizational Model
Chapter 5: The Organizational Model
Your Organizational Model
Where are you?
Where do you want to be?
Who is capable of taking you there?
Who isn’t?
What is your biggest issue? 52

54. Chapter 6: Goal Setting 53 Objectives
Instructor's Notes
11/9/2018
Chapter 6: Goal Setting
Objectives
Identify the 3 Ls—the Millionaire Real Estate Agent’s 20 Percent
Define the 8 goal categories of the Millionaire Real Estate Agent
Identify the key numbers for your 3-year and 5-year goals 53
Keller MREA Business Planning Clinic Jan 2004

55. Chapter 6: Goal Setting
The MREA 20 Percent 54

56. Chapter 6: Goal Setting
The Three Ls 55

57. Leads & Listings 56 Lead Generation Listings
Chapter 6: Goal Setting
Leads & Listings
Lead Generation
Lead Generation is always turned on.
MREAs lead generate
Listings
Marketing opportunities
Control of time
Maximize per-hour compensation
Volume
Better market knowledge
Bring you buyers (and more sellers) 56

58. Leverage Who is going to do it? People
Chapter 6: Goal Setting
Leverage
Who is going to do it? People
How will they do it? Systems Your first hire should create your systems.
What will they do it with? Tools Your admin leverage should bring tools.
57-58

59. 8 Goal Categories 59 The list—quickly! Should know goals and actuals
Chapter 6: Goal Setting
8 Goal Categories
The list—quickly!
Leads Generated
Listings
Contracts Written
Contracts Closed
Money
People
Systems/Tools
Personal Education
Should know goals and actuals 59

60. Leads are the most important number to know.
Chapter 6: Goal Setting
1. Leads Generated
Leads are the most important number to know.
What to track
Leads received
Source
Conversion rates 60

61. 2. Listings 61 What to track Seller Listings taken
Chapter 6: Goal Setting
2. Listings
What to track
Seller Listings taken
Buyer Listings taken
If you choose to track only two numbers,
track your leads and your seller listings. 61

62. Contracts: 3. Written & 4. Closed
Chapter 6: Goal Setting
Contracts: Written & 4. Closed
What to track—Contracts Written
Number of units written
Total volume written
Gross income written
What to track—Contracts closed
Number of units closed
Total volume closed
GCI 62

63. 5. Money 63 What to track GCI Budget Net Income
Chapter 6: Goal Setting
5. Money
What to track
GCI
Budget
Net Income 63

64. 6. People 64 What to track Recruiting Training Consulting
Chapter 6: Goal Setting
6. People
What to track
Recruiting
Who do I need?
Where will I find them?
Training
Consulting 64

65. 7. Systems/Tools 65 What to track What new systems are needed?
Chapter 6: Goal Setting
7. Systems/Tools
What to track
What new systems are needed?
What improvements or upgrades do we need for current systems? 65

66. 8. Personal Education 66 What to track: What knowledge do I need?
Chapter 6: Goal Setting
8. Personal Education
What to track:
What knowledge do I need?
What does my staff need? 66

67. Setting Your Goals 67 Key Goal Numbers Net Income
Chapter 6: Goal Setting
Setting Your Goals
Key Goal Numbers
Net Income
GCI
Expenses
Cost of Sales
# in Met Database
# in Haven’t Met Database
Is your goal big enough? 67

68. Your 3-Year and 5-Year Goals
Chapter 6: Goal Setting
Your 3-Year and 5-Year Goals
Set
Calculation
3-Year Net Income Goal
Current Net Income + Annual Increase
GCI
3-Year Net Income  .416
Expenses
GCI x .292
Cost of Sales
No. of Sales
GCI  .03  250,000
No. in Met Database
Sales x .5 x 6
No. in Haven’t Met Database
Sales x .5 x 50
Set
Calculation
5-Year Net Income Goal
Current Net Income + (Annual Increase x 3)
GCI
5-Year Net Income  .416
Expenses
GCI x .292
Cost of Sales
No. of Sales
GCI  .03  250,000
No. in Met Database
Sales x .5 x 6
No. in Haven’t Met Database
Sales x .5 x 50 68

69. Chapter 7: Focus 69 Objectives Identify how to focus on what matters
Instructor's Notes
11/9/2018
Chapter 7: Focus
Objectives
Identify how to focus on what matters
Use the to maintain your focus
Create your action plan 69
Keller MREA Business Planning Clinic Jan 2004

70. Anyone can do it; Not everyone will.
Chapter 7: Focus
Focus
Anyone can do it; Not everyone will.
3 Steps:
Create a personal plan
Time block
Get accountability 70

71. 1. Create a Personal Plan 71 Implement plans
Chapter 7: Focus
1. Create a Personal Plan
Implement plans
Get the plans from a Big Model
Have a Big Goal 71

72. 2. Time Block 72 Are you in “busyness”?
Chapter 7: Focus
2. Time Block
Are you in “busyness”?
Are you focused on what has to be done to drive your business?
Are you clear about your models?
Do you schedule time with yourself on your calendar to get things done? 72

73. Getting focus is easy. Keeping it is not.
Chapter 7: Focus
3. Get Accountability
Getting focus is easy. Keeping it is not.
Focus feels like routine
Accountability helps to focus … and re-focus 73

74. 3. Get Accountability (continued)
Chapter 7: Focus
3. Get Accountability (continued)
1. Set Goals
2. Do the Key Activities
3. Measure Results
4. Evaluate the Process
5. Make Adjustments
Accountability Feedback Loop 74

75. The 4-1-1 75 Setting your annual goals Define your annual goals! Job
Chapter 7: Focus
The 4-1-1
Setting your annual goals
Job
Business
Personal
Personal Financial
Define your annual goals! 75

76. 76 The 4-1-1 (continued) Monthly Goals Define your monthly goals!
Chapter 7: Focus
The (continued)
Monthly Goals
Derived from Annual goals
Key activities
Define your monthly goals! 76

77. 77 The 4-1-1 (continued) Weekly goals Define your weekly goals!
Chapter 7: Focus
The (continued)
Weekly goals
Levers—actions or activities
Limit of 6 – 8 key goals
Define your weekly goals! 77

78. Chapter 7: Focus
The (continued)
Now…
Create your 4-1-1
78-79

79. Give an Aha! Take an Aha! The concept I’m still struggling with
The single most important “Aha!” for me
How I will use this “Aha!”
How I will benefit
What I need to do to make this happen 80

80. Create Your Action Plan
Chapter 9: Putting it All Together
Create Your Action Plan
Three specific tasks
Accountability dates
Peer partner contact info
Share with peer partner
Commit to taking action!
81-82

81. Don’t forget your evaluations
Thank You
for
Being Here!
Don’t forget your evaluations