BY MIKE PALLIN, FLOYD WICKMAN TEAM

HOW DO I GO ABOUT SETTING AN INCOME GOAL FOR NEXT YEAR? 

Each of us begins the year with a hope, or a wish, or a dream, or a desire, or an expectation – but only 5% of the general population actually begins the year with a specific, measurable, written goal. And, if the experts are to be believed, only 5% of that 5% actually track activity and results throughout the year, stay on track, and achieve their goals. 

So if the odds are that slim, why even bother? Why not just start the year with a dream or wish or hope or expectation and leave it at that? Surely if the goal is vague enough, just ending up close enough will be good enough, won’t it? 

Here’s why it won’t be. 

The 2014 Get By Giving Award Winner, John Brown, tells the story of sitting in the front row at his first Master Sales Society event. When Floyd directed everyone in the room, saying, “Open up your workbook and write down your income goal for the next 12 months,” John wrote down $50,000. I will let John continue the story from here. 

“A year later, sitting in the front row at my next Master Sales Society event, as Floyd directed each of us to write down our goal for the next 12 months, I thought back over the past 12 months, and realized I had earned at least $50,000. That gave me the courage to write down $75,000 for the next 12 months.” 

“Another year later, sitting in the front row, as Floyd was directing us to write our goal down, I realized I had made at least $75,000 in the past 12 months, and I wrote down $100,000. Then it hit me. Why didn’t I write down $100,000 two years ago?!” 

Two points from John’s story. One, write it down. It doesn't exist until it’s written down.  A goal isn’t specific until it is written down. Progress can’t me measured until the goal is written down. You won’t even remember it a year later and know whether or not you hit your goal unless you write it down. 

And two, think bigger. By and large, you won’t achieve more than you believe you can. But once you believe, the sky’s the limit. 

So, if that’s the case, where do I start? Do I just pull a number out of thin air? Or is there some more scientific way to come up with my goal? 

Here are five questions that should point the way. Spend some time answering these five questions, and your dreams, hopes, wishes, desires and expectations will propel you to a specific and measurable income goal you can believe and achieve. 

1. What do my SMART Numbers from this year tell me?

Without numbers, it’s all guesswork, so start with your numbers. How much did I earn this year? How many closings? How many pended? What percentage of my listings sold and closed? What percentage of my buyer sales pended and closed?  

Just like Floyd teaches us in Session 6 with the 10 Ingredients of Achieving A Long Range Goal, drill it down to activity. How much time do I need to devote to prospecting and lead generation? How many conversations? How many appointments? 

2. Where did my business come from this year? 

Take a look at sources. What percentage of closings come from Book of Business? Expireds? For Sale By Owners? Repeat? Networking? Social Media? Etc.  And then take a look at which sources returned the highest commission per closing. 

When you are able to start connecting income with activity, a goal number will start to become clearer. 

3. What marketing dollars that I spent to generate business paid off and what didn’t? 

This kind of analysis would seem obvious, wouldn’t it? You would think so. But one of our good friends, Don Hobbs, who founded and ran the #1 marketing company in the real estate industry, reminded me again recently of this old truth. “The #1 mistake real estate agents make with marketing is they base their spending decisions on what makes them feel good, instead of what gets results.” 

Once you know what’s working to get results, and what isn’t getting results, you can make smarter marketing decisions. Do more of this. Do less of that. Now that goal number will begin to get a little clearer. 

4. How accurately do I keep track of my expenses? 

One question you don’t want to end up asking yourself is, “Where did it all go?” There are all kinds of effective systems available for keeping track of expenses. Systems that work automatically, digitally, almost magically, to give you a clear picture of how much it costs to run your business. American Express has a great system. Top Producer includes a great system. If you are still stuck in the shoe-box-full-of-receipts mode, this is definitely one area where technology can make life easier. 

Once you have a clear picture of how much it costs to run your business, where you can economize and where you can afford to occasionally splurge guilt-free, that goal number will come into focus a little more sharply. 

5. How do I allocate my income? 

Good salespeople are cash generating machines. They are also generally poor money managers.  One of the smartest things I see good salespeople do is forced savings. Earmark a percentage or specific amount of each commission check to automatically (AUTOMATICALLY!) go into a forced savings account and not into your pocket. There’s nothing like a cash reserve to take the sting out of commission income ups and downs. 

Beyond that, take a bird’s eye view of your gross income and estimate percentages that need to be set aside for taxes, business expenses, living expenses, investments, vacations, charity, etc. 

Once you get a clear picture of where to allocate your gross income, and how to allocate each check, that income number for next year will become a lifestyle you can live comfortably in, a future you can see, and a goal you can believe in.