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Source: Timmons, J. and Spinelli, S. (2007) New Venture Creation: Entrepreneurship in the 21st Century, 7th Edition, McGraw Hill.

How do I add value to the

clients I serve?

How do I solve a specific

pain for which clients are

willing to pay a premium?

Potential market share

and profitability analysis:Is my target market large enough?

Is there growth potential?

Strong/early/sustainable cash flow?

High profit margin?

Risk vs. reward

analysis:Is there a high return on investment?

Chung Phan is a Vietnam native who immigrated

here after graduating with a masters degree in

computer engineering. He is 46 years old with a wife and

3 children. He works as a systems analyst at Comco, and

earns $92,346 per year. He lives in Stonewood

Springs, plays golf and loves technology.I interact with Chung at church

and local civic organizations.

I will build trust by becoming the first Vietnamese-speaking agent in our community, and I will work hard to become a

credible professional in my community by being active in it.

SWOT analysis of competitor Mark Witherspoon

I have the opportunity to win

market share from Mark by

relating to the Vietnamese

community by speaking

their language and being a

part of it.

Mark has sold to some in the

community and has a lot of

resources to advertise

should he decide to market

more heavily. He could even

invest in having a translator.

Mark does not speak

Vietnamese and is not active

in our community.

Mark is a recognized, high

producing professional who

has marketed and sold to

several Vietnamese

families.

•Broker

•Lender

•Coach

•Closing attorney

•Inspectors

•Contractors

•Sphere of influence

•Referring closed clients

• What are my major

business goals?

• Short-term

• Mid-term

• Long-term

• How will my business change?

• Are there buyout opportunities?

For agents, this has to be very specific.

Keep a strategic daily calendar defining your work

habits and what specifically you will do.

Know your waterfall:

75 sales calls = 1 appointment

3 appointments = 1 signed listing/buyers agreement

2 signed agreements = 1 ratified contract

1.5 ratified contracts = 1 closed transaction

Know your cash flow.

Monetize all costs into each closed transaction.

$12,000/yr marketing

+ $3,000/yr franchise fee

+ $600/yr E&O insurance

+ $4000/yr office/gas/business

$19,600 total expensesdivided over 18 transactions in 2012

$1,089 per transaction

Know your cash flow.

Using this method, subtracting “cost of goods”

expenses from each transaction gives me my

positive, pre-tax cash flow projections.

Example:

I close as the buyer’s agent on a $200,000 home

offering 3% to the buyer’s agent. I grossed $6,000.

I split 40% with my broker, I’m left with $3,600.

$3,600 - $1,089 (Cost of goods) = $2,511 profit.

What is my product?

• Service : how do I market myself?

• Listing : how do I market my listing?

Who is my target?

What medium does my target

consume?

Get specific about your waterfall.

• Where do continued flow of clients come from?

• Provided the waterfall works as projected, how

does that translate to profitability?

75 calls = 1 appointment

3 appointments = 1 agreement signed

2 signed agreements = 1 ratified contracts

1.5 ratified contract = 1 closing

Average home price is $200,000

Cost of doing business = $1,089 per transaction

Take home $2,511 per transaction with current broker split

What is my breakeven?

• The point at which I have all my bills paid, and I

become profitable.

What is my profitability time projection?

• How long before my initial investment is returned?

• How many sales must I make to breakeven?

• How many sales must I make to meet my

profitability projections?

Be able to explain in 15 minutes in simple terms:

• Industry problem and your solution

• Size and viability of your specific market

• Technology plan

• Your competitive advantage

• Your team

• Operating strategy

• Your financials

• Your breakeven and profitability projections