For many agents, maintaining an accurate pipeline is easily understood but not easily kept front of mind. Administration is often seen as an unnecessary distraction from profit-generating activities like cold calling and showings.
However, maintaining an accurate pipeline is essential.
Why? Because keeping your pipeline in check helps you with:
Understanding expenses and profits
Handling fluctuations and down periods
Planning your business, by providing you with historical benchmarks and targets
Overall, each of these aspects can make a big difference to not just your peace of mind but your real estate business’ bottom line. Here’s more on each:
A large element of operating a successful business is knowing how to manage your finances. Consider this - do you know how much your current pipeline is set to bring in next month? How much did you spend generating business last month?
Are you on track to make your desired level of income?
You should know exactly how much money is coming in, how much is going out, giving you a picture of how your expenses are contributing to your lead flow.
Without an accurate pipeline, you are going to have a hard time answering these questions. With correct figures on your pipeline, you will be able to accurately forecast your future incomes and expenses.
Read more: How to track lead generation activities
Plan for low periods
High and low periods are frequent and common in both real estate and sales businesses.
For many successful agents, the most common way to manage fluctuation is through careful planning for future low periods. The benefits of a busy season can be applied to softening the lower volumes of quieter times.
However, without an accurate pipeline, you may find yourself a future lack of income to come unexpectedly.
With carefully kept records, in contrast, you will be able to see low periods before they happen. You can simply review your current pipeline, as well as consult your historical data and performance from previous years to see when a future low period may be coming.
Many agents do not fully appreciate what it means to be in business for yourself as an agent.
As an agent, you are running your very own business. You are in charge of finding your clients, maintaining relationships, marketing initiatives, and most of all - your finances.
An accurate pipeline will provide you with insight into your business' activity to help you make better strategic decisions.
Using historical performance data, you can create new benchmarks for future performance. There are a number of ways this can be done. For example, take a quick glimpse at your historical volumes to use as benchmarks to increase for this year's targets. Been converting less than average? Schedule increased training sessions and coaching. Finally, analyze last year's breakdown of lead sources to guide this year's marketing investment.
From each of your business' perspectives, an up to date and clean historical pipeline will assist you in making sound business decisions.
Pipelines may be another administrative task, but their usefulness, particularly when accurate, cannot be understated.
Think of your pipeline as your own business advisor. Your pipeline can tell you how you are currently performing and when you might need to build up your reserves. Your pipeline can also provide you with the information you need to set effective business targets for both marketing and sales.