22 Jun Broker Guidelines (Part 1 of 2)
The following broker guidelines come from a memo Bill Martin recently emailed to the 22 agents that work at American Business Masters, Inc (ABMI), a Kansas City business brokerage firm. Due to the length of the memo, we are posting the first five guidelines today and the remaining five tomorrow.
We’re doing great.
Over the last 12 months, during what was supposed to be a “recovering” economy, we have made sure ABMI is practicing, with even more energy, the “basics” we’ve learned over the last 30 years of listing and selling small businesses.
ABMI has become the “New ABMI”, with dramatically increased buyer lead flow, improved listing quality, a doubled agent sales force (now totaling 22 business brokers/agents, working the 10 counties of metro Kansas City), recruiting and training of an exceptional administrative staff, the development of state of the art internet marketing and improved advertising, the writing of a new agency web site (www.abmi.net), totaling hundreds of pages of new content that’s unique to our site, the development of an in house commercial real estate agency with an ultra talented managing real estate broker, the recruiting/development of talented sales management, and lots of agent training and re-training, resulting in sales and commission income that doubled in 2010 over 2009, and, in 2011, commission income that is headed for record setting by doubling again over 2010.
Everyone at ABMI will benefit from these improvements. At least, everyone that does their part to be involved in taking advantage of the opportunities created by ABMI’s owners. Here are the guidelines that each Main Street agent should use as your personal goals, so you can generate your share of these exciting opportunities.
Each Main Street agent should work to make the following a reality:
(1) You should have no less than 10 personal listings/seller engagements at all times. If you are a new agent, or one that’s been on staff less than 6 months, you should be in the process of achieving 10 personal listings. If you have been on staff more than 6 months, you should already be at 10 personal listings.
(2) Each of your personal listings, to count as the 10 you need, should be properly packaged, and priced according to the pricing formulas you were taught during your new agent training. As your own “self manager”, you should not count any under-packaged, nor over-priced listing, nor any short term listing (a listing that is for less than 6 months), nor any listing that is not a Sole And Exclusive.
(3) Of the qualified listings (properly packaged, properly priced, 6 mo S&E’s), ABMI’s average agent will sell 60% of those, or some other agent will sell 60% of them (compared to typical agencies in our industry that only sell 20% to 30% of their over priced/underpackaged/under advertised listings). That will earn you at least 6, up to 12, listing commission checks, averaging $10,000 each (since the average sale the last 2 years has been $400,000, with listing agents earning about 25% of the $40,000 average commission), to go along with the selling commissions you will earn each year. With most average agents performing as both listing and selling agents, with listing commissions generating 50% of your income, and selling commissions generating 50%, if you have 10 listings at all times, or about 20 listings per year (of 6 mo average each), you can then earn $60,000 to $120,000 per year in listing commissions, and an equal additional amount in selling commissions. If you only maintain 1 personal qualified listing at all times, you obviously would then probably earn 10% of those amounts per year. With 5 listings, you would earn ½ of those amounts, and so on. So, every agent has the power to make your own income dreams happen, depending on how “Serious About Success” you are.
(4) The reason it is possible to have 20 personal listings per year is because, with ABMI selling 60% of those, in order to maintain 10 personal listings, you need to be regularly writing new listings, to replace the ones that are sold.
(5) In order to have 10 personal qualified listings, an average agent will usually have to perform 30 to 50 pricings/evaluations, since most agents list about 20% to 30% of the evaluations/pricing interviews they conduct. To achieve 10 personal qualified listings within 6 months, you will need to conduct 30 to 50 pricings/evaluations per 6 months, or 5 to 8 1/3 pricings/evaluations per month. Any agent that is not performing that number of pricings/evaluations per month will be unlikely to achieve the active listings level you need. To be honest, each agent should be able to cause more than 5 to 8 1/3 seller appointments per month happen, for those agents who are “Serious About Success”.
To be continued. Look for the final five broker guidelines from Bill Martin in tomorrow’s posting.