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Dear Friend,

This week we are going to start a brand new series on a concept called “Before, During and After”.

Now you’ve probably heard me talk about this before and what I would encourage you to do is before even listening to the rest of this episode is to go back and listen to the podcast from week 23, I’ll put a link there to it, where it explains the concept of Before, During and After. And basically what we’re looking at is dividing up your business into its three key functions and I call those your before team or your before unit which is all about finding people who want to buy, sell or borrow.

As soon as you find them they move on to your during unit and the during unit is where you are working with people through the transactional process helping them buy, helping sell, helping them borrow, going through that transaction from the time you get an appointment with them until the time that transaction closes.

That would be your during unit and even including the first 30, 60, 90 days after the transaction is closed. And then we move into your after unit which is the division of your business that is responsible for nurturing lifetime relationships with the people who know you, like you and trust you so that when they have a real estate need or they have a friend or family member who has a real estate need they will contact you and they will refer people to you and when we start looking at your business in these three categories we really have the ability now to architect and to really create systems that can have tremendous results in your business and each one of them has its own monetised result.

So I’ll talk about those as we go on over the next few weeks here as we go into each of the units in the series but for tonight we’re going to talk about your before unit and I’ve got 6 big ideas that I want to share with you in your before unit.

Idea Number 1: Decide to stop cold prospecting and focus on building an automated prospecting system.

You know when you really look at it, I don’t have to tell you that prospecting sucks because it does and you know it. You know people don’t want you bugging them, you don’t want to be bugging people, they don’t want you chasing them and you hate chasing people yourself, you know. Plus the biggest thing about it is that cold prospecting, any form of it where you are calling people up is a hamster wheel and when I say that, and I can say that because I have a record of having done thousands of cold calls myself, that’s exactly how I started out, I started out making 100 cold calls a day and I can tell you that it does work but the biggest realisation is that it’s a hamster wheel and by hamster wheel I mean it only works when you’re spinning the wheel. When you’re on there making your cold calls or you’re on there chasing the expired’s or chasing the FSBO’s or doing all of those things it works then but as soon as you get off, as soon as you stop running and spinning the wheel the wheel stops, it doesn’t continue to work.

You know that’s why we end up with all these cycles in income because we are busy, busy, busy prospecting and we don’t have people to work with and it works and we end up finding people to work with and then we get busy, busy, busy working with the people that are prospecting uncovered and then while we’re working with them we’re not prospecting any more and that’s what sets up these cycles of highs and lows.

So it’s the most inconsistent thing to build your business on, plus you get burnt out on it, there’s no leverage in it. You cannot get any way of duplicating yourself and that’s really what systems are about, it’s about duplicating yourself.

You know we don’t want you to focus on spending all of your time or disciplining yourself to spend time doing the same thing again and again and again and not getting any forward momentum. You know you’re not building anything from that, you’re just building a short term reward for your efforts. So you know it’s very important that you just make that decision that you’re going to stop cold prospecting.

And you don’t have to make the decision that you’re going to do it today although you’d be best to stop doing it today and focus your time on doing something that’s going to have some equity built for you, some leverage, but if you just wrap your mind around that concept that you’re moving towards stopping this cold prospecting and you’re going to focus on building an automated prospecting system.

Idea Number 2: Narrow your focus to a single target market.

Well you’ve heard me say that before haven’t you? You know and some things never change and I keep trying to think of new and different ways to say narrow your focus to a single target market because often when I say that people get confused, you know they think well that’s too small I can’t, I help people do this, I help people in this town and this town and this area and I help people buy town homes and I help people buy horse farms so I really do help a lot of different people.

I can’t really narrow it down to one target market. But what we’re talking about here and I’m not saying that you can only ever work with one target market, I’m saying from a business decision stand point from a way of focusing your attention as a focusing tool, make a decision that just for right now you’re going to focus on setting up an automated prospecting system for one single target market.

See you’ve got to realise that even though you think about the market of people that you help en masse, you think about them as you know people who are going to buy a town house, people who are going to buy a horse farm, people who are going to buy in any one of the five towns in your county, you think about them like that but you’ve got to realise that you’re only speaking to one person at a time and the more focused you are on them the better off you’ll be. See people don’t gather around in groups and read the real estate papers or read the real estate publications.

What they’re looking for when they’re looking in those publications is for exactly what they are interested in. So somebody who is looking for a town house for instance is only interested in the town houses and that’s what they’re scouring those publications for is information on town houses. So even though you do help people with town houses and you help people with horse farms they’re never the same person and they’re not looking at that publication together, they’re looking at it independently and only looking for the thing that they are interest in. So just wrap your mind around this concept of narrowing in on a single target market.

Idea number 3: Focus on a market’s total yield before you decide a market is too small.

Focus on the total yield before you decide it’s too small. Now here’s how you calculate that total yield and this is a very, very important concept and it’s a very valuable metric, very valuable for you to measure and I say look at the total yield. Here’s how we can calculate it. Let’s say that in your marketplace there are 1,500 town homes and I’ll use actually to the best of my memory real numbers from a situation that I did in Georgetown, and I ran these numbers last summer with some clients, and we looked at this and let’s say that there are, and these are approximately accurate, 1,500 town homes in Georgetown, that’s an area just outside of Toronto, 1,500 town homes and last year there were 120 sales of those town homes, 120 of them sold. So what we have to look at is how much money did that yield.

How much money did the town houses in Georgetown actually end up paying out? So if we look at it and where there were 120 sales in there and let’s say that on average they paid a commission of $6,000 for the buying side of a commission, that would be $720,000 in buying side commissions meaning you sold somebody a town house and you would get the buying portion of that commission and if you sold them all it would be worth $720,000. Now if you listed them all it would be worth an additional $720,000 to you so that’s another $720,000 which equals over $1,400,000, $1,440,000 to be exact of commissions that were paid just in the buying and selling of those 120 town house units in Georgetown.

Now it doesn’t stop there because NAR says that more than half the time people who sell their homes buy a little bit bigger home within 18 miles of the home that they’ve sold. So let’s say that half the time you could sell somebody that you sold their town house a bigger house, let’s say it paid a $7,000 commission and that would be 60 of those, 60 people times $7,000 would be $420,000 more. So if we add that to our $1.4 million we end up with $1,860,000 that are going to be paid just in the town house market alone and that’s what I mean by the total yield. That’s how you determine whether a market is worth focusing on.

You know and when you narrow your market like that, would it be worth it for you if you could narrow your focus and get even 20% of a market like that, that’s the minimum that I would say for dominating a market would be a 20% market share in that market too out of every 10 people who sell their town house or buy a town house would use you. And you know if you really are single mindedly focused on that, that’s very reasonable to do, very reasonable, because most of your competitors are not willing or able to focus their mind around a single target market like that.

So after you’ve determined what the total yield is for your market, that leads to big idea number 4

Idea number 4: Decide how much you would cheerfully pay for a buyer or seller transaction.

You know I often like to think about your before unit as a way of setting up what I call little automated vending machines you know and you start thinking about it like how much money would you be willing to pay if you had access to a vending machine that sold buyers or sellers and lets just say for the town house market. Let’s say you’ve chosen that as your area. How much could you cheerfully pay to earn a $6,000 or $7,000 commission?

You know one of the bench marks that I use often is that most people would pay another realtor or they would pay a relocation company a minimum of 20% of a transaction for a guaranteed transaction so I like to start out with that, I mean surely you would pay $1,000 for a $6,000 cheque but what if you could it for $500 or $250 that would be even better.

You know once you determine what you’re willing to pay that becomes your base line minimum and all of the efforts that you make, all of the things that you do are going to focus on lowering that number so that you’re not paying as much as you’d be happy to pay but that you’re paying the minimum amount that you can pay for a buyer or a seller in that market place and I guarantee you that it’s much easier to generate those buyers and sellers when you’re very focused than it is when you’re scattering your efforts across a whole market.

Idea Number 5: Set your mind on getting ALL the business in your chosen market

You know if you start thinking that your main objective is to get all of the town house business in your chosen market or all of the horse farm business or all of the lake front business or all of the new home business, whatever it is you want to set your mind on getting all of that business and set up little profit triangles for yourself.

Now I’ve talked about this before but a profit triangle is essentially where you’re focused on two things, you’re focused on finding buyers and you’re focused on getting listings and those two things, if you’re focused on finding buyers who are going to buy a town house and you’re focused on getting listings of town houses there’s a very, very good chance that you’re going to be the one who puts those two people together. You know it just makes sense that if you’re focused on finding all the buyers for the town houses regardless of whether you’ve got listings or not you’re going to find more of the buyers for the town houses and if you’re focused on getting all the listings, odds are you’re going to get more listings than you’re getting right now just by focusing on trying to attract everybody.

Idea number 6: Focus on people who are already in motion and get in front of them.

You know right now you don’t set what happens in the market. You know if you look at it, on our numbers that we did in Georgetown it was nearly a 10% turn over rate of all of the town homes. Now some areas that you focus on may have a 5% turn over rate or they may have a 7% turn over rate or they may have a 17% turn over rate, whatever it is if you know what that number is that is a number that you can’t do anything about. People are going to buy or sell or move regardless of what your wishes for them are.

They’ve got their own reasons for moving. They’ve got their own set of circumstances that will determine exactly what they’re going to do. What your main focus should be is getting in front of the people who’ve already decided that they’re going to buy or already decided that they’re going to sell their town house and if you’re single mindedly focused on that, focused on serving that market what do people in those areas need to know.

What do people who are going to sell their town house need to know and what are they probably doing right now? What are they really looking for? Are they looking for a bigger house right now? What’s going to trigger them selling their town house? And what about people who are looking for town houses right now, what are they doing? Are they looking the homes magazines, looking for information about town houses or are they looking in the classifieds? Are they driving around the neighbourhoods looking for info-box fliers or looking for signs of town houses that are for sale? Of course they are. They’re doing all of those things and if you can focus on inexpensive focused regenerators, getting in front of those people that’s where you’re really going to get the very best results that you can in your before unit.

So that’s enough for this week. Take a look at that week 23, look at the introduction to the before, during and after, listen to this pod cast a couple of times and start wrapping your mind around these big ideas for your before unit and we’ll be back next time and we’ll continue our discussion about the three most important divisions of your business, your before unit, your during unit and your after unit.