Business Plan, Day 2


Tuesday Objective:  What is your Financial Goal?

You probably have an idea on how much money you would like to make in real estate but do you know how to break down the numbers to determine what it will take to achieve your goal?

Let’s say you would like to make $40K your first year in real estate. The first step is to calculate what your average net commission is. Let’s say, the average home sells at $250,000. Based upon a commission of 3% your gross commission per transaction would be $7,500.

Once you have your Gross commission amount you need to figure out what your expenses are. As a new agent it’s difficult to know what will be spent on advertising, marketing, gas, meals etc. A good average for Silvercreek agents based upon our flat fee structure is a 30% expense to 70% profit ratio.
Based upon a 70% profit margin per commission your net will be $7,500 X 70% = $5,250. We recommend setting aside 30% of each commission in your business account to ensure you have the funds to continually invest in growing your business.

At $5,250 per commission if you want to make $40,000 you will need to sell 8 (7.6) homes a year!

Based upon years and years of experience we know that for every 40 conversations you have about real estate with people in your sphere or others, 1 person will buy.  In order to sell 8 homes this year you will need to talk to 320 people about real estate. 320 people divided by 12 months is 27 contacts per month.  Based upon 20 working days a month you will need to make 1.35 contacts a day to hit your goal.  It’s always good to round up so making 2 contacts a day will ensure that you hit your goal!  Take the time to work your own numbers and see what time and effort you need to dedicate to prospecting in order to hit your goal!


Action Items:

  • Decide your financial goals and calculate:
    • How many homes you need to sell in a year to make it happen
    • How many contacts you need to make in a day
  • Write your financial goal onto your one-page business plan under “Annual Goal”