7 Warning Signs your business might be in jeopardy!
We all develop bad habits and blind spots over time. Here’s how to identify them before they take a lasting toll on your success.
Is your business poised for growth or is it headed in the wrong direction? There are leading indicators that act as confirmation that your future is bright. These leading indicators can also act as warning signs that you will need to make some changes in your business before it is too late.
Warning Sign No. 1: Your database is not growing
A growing database equals a growing business. A stagnant database equals a dying business. Or put another way your database IS your business.
Do you have a steady and consistent flow of leads coming into your business? If not, now is the time to put systematic plans in place to bring a consistent flow of new leads.
Start with the basics:
- Do you have every one of your current and past clients in your database?
- Are your friends, family, past coworkers, and everyone else in your sphere of influence in your database?
Speaking of a database, what system are you using? There are many great CRM’s, however, the best one is the one you actually use. A CRM is not your mobile phone, a spreadsheet or a bunch of files, it is technology system that allows you to access the data from anywhere, in real time, add notes, reminders, activities, automated campaigns and so much more.
Warning Sign No. 2: You only have one source of leads
Even if your database is growing, without diversification of lead sources, your business is at risk. Over my 30 years in real estate, I’ve had lead sources that were extremely profitable for a while that become irrelevant over time.
Early in my career, local newspaper ads predictably generated leads. Then there was a season when posting listings on local Facebook groups or Craigslist was effective. Targeting very specific clients on Facebook was another lead source that became less effective when they changed their ad targeting guidelines.
Change will come. Lead sources that are effective now will be less effective in the future. Mitigate the risk to your business by diversifying your sources of leads as soon as possible. Continue leaning into any lead source that is working now, but make sure you are not dependent on just one source.
Warning Sign No. 3: You’ve stopped making outbound prospecting phone calls
The day you stop making outbound prospecting calls is the day your business begins to decline. Are you waiting for the phone to ring, or are you purposefully making outbound calls to engage with prospective buyers and sellers?
Real estate is a contact sport, and the number of transactions you close is directly proportional to the number of conversations you have. The average real estate agent will generate one transaction for every 50 real estate related conversations.
As an example, if your goal is to close 36 transactions this year, then you will need to have 1,800 (36 x 50) real estate related conversations this year. That breaks down to 150 per month or just over 37 per week.
Do you have 37 people calling you every week asking about the market or requesting you to help them buy or sell a home? If not, you need to make up the gap in conversations needed to meet your goal by making outbound calls to prospective buyers and sellers.
Warning Sign No. 4: You’re living beyond your means
Real estate is a cyclical business. There will be seasons when the market is good, and your income is higher than normal. There will also be seasons when the market cools down, and your income is lower than normal. The tide has turned, and the market that has been extremely good over the past few years has now changed which could present challenges in the coming months.
Now that the market has turned, one of the first questions you should ask yourself is, have you been living beyond your means? Long-term business success is not determined by how much you make, but by how much you keep. Do you have savings put back for a rainy day? If not, put a plan in place today. It is not a matter of if it will rain, but when and for how long the rain will fall.
Now is the time to evaluate every dollar you are spending. Ask the question, is this expense needed? If not, then eliminate it.
If it is needed, can it still be effective if I reduce the amount I spend on it? If so, reduce the amount you spend on it. Become diligent about controlling your expenses.