It’s getting to be that time of year again when you gather the troops, look back at 2014, and draw up your game plan for the coming year. You’ll want to sit down and talk about your business plan, goals, initiatives, and ultimately, your budget. It’s a daunting task, trying to peer into your crystal ball and forecast your needs and resources for an entire year. Crafting budgets is especially difficult when you’re trying to ensure that you get the most bang for your buck, but a few tips could help you hit your goals and stretch your budget.
To help your wrap up your budget outline for 2015, we’ve organized our favorite tips from broker-owners and executives for organizing your annual budget:
1. Choose your business objectives and organize your business strategies and budget accordingly.What are your objectives for 2015 – increase sales by 15%? Grow your roster by 150 agents? Expand your sales territory and open a new office in a nearby state? Identify what key goals are most important, and then organize the strategies that will help you execute on them (and allot budget accordingly). Doing this will allow you to stay goal-oriented and not let side-projects or “zombie projects” distract you.
2. Don’t allocate your money like peanut butter… Divvying up your budget should be done vertically, not horizontally. Too many brokerages take a horizontal approach in which resources are spread evenly across departments. Make sure that initiatives that align with your annual goals and are drivers of profits are fully funded before moving down the list.
3. …But make sure you continue investing in new, innovative ways to grow your brokerage. Onegood framework is to split your budget as follows: 75% – daily operations (the nuts and bolts of keeping your brokerage stable and afloat); 5% – incremental improvements (tactical shifts like making your document storage more accessible); 20% – sustaining and implementing new innovation (strategic bets like implementing a new agent portal or trying out a mentoring program). It’s important to protect these innovative programs that might not (yet) be contributing to top-line revenue until they have room to flourish. Larger initiatives like new technology suites or people programs take more time to implement but reap rewards many times over in the long-run.