405: Carla Cross with A Proven Plan for Financial Success in Real Estate

Welcome to the AIPIS show for accredited income property investment specialists and those who aspire to be. If you're a real estate, mortgage or financial professional, this is the place for you. We'll explore innovative investment analysis, sales, marketing and income generating strategies for the most historically proven wealth creator income property. Learn from the experts as they show you how to build a better business and a better life.

Welcome to the AIPIS show, the show for accredited income property investment specialists and those who wish to be. This is an education program for real estate, mortgage and financial professionals and we talk about creating wealth and creating success for ourselves and our career and for our clients by helping them invest in the most historically proven asset class income property. Today I am talking to you from beautiful Saint Martin in the Caribbean. And yes, those are crashing waves in the background right out of my hotel room here at the Westin Resort in Saint Martin in Oyster Bay. I'm not sure how they sound, it may just sound like white noise, but those are crashing waves and it's just great to be here with white sand beaches and crystal clear waters and all that kind of stuff. And that's why we, we want to keep learning and make education about our careers and about investing a lifelong process so that we can create wealth for ourselves and for our clients by becoming their trusted advisor rather than just another salesperson. So today we're going to talk with Karla Cross. We're going to talk about reaching our goals and having a plan for success. So let's go to the interview here with Karla Cross.

It's my pleasure to welcome Carla Cross to the show. She is a productivity expert and she's the author of up and running in 30 days, a proven Plan for Financial Success in Real Estate and many other works as well. And been following her work for many years and it's good to have her on the show. Karla, welcome.

Well, thank you, Jason. Same to you. I appreciate the opportunity.

So first of all, maybe we'll start with a little bit of an overview of what you think is going on in the real estate industry nowadays. And then we'll get into our topic for the day, which is business planning and how agents and management can use business plans to increase productivity and just have a better life.

Well, of course all of us know there's been a huge change in the industry in many, many levels. But from our business planning perspective, I would say the biggest thing we have to look at is the way that we were able to practice real estate when the market was on fire. Really didn't teach us very much about the practices we have to use today. One of the things that I see, because I'm a musician, I've been a musician my whole life, and I know that in order to play a piece of music, you have to start at the beginning and work all your way through. In other words, it's linear and it has a big picture and it has a pattern. And today I don't think we're looking at the big picture or the pattern because it's tough for us to see. And we're still trying to act as though the market was on fire and was motivating buyers and sellers to make those decisions. In other words, it's up to us completely to create careers today, whereas before the market and the buyers and the sellers really created the careers for us.

A lot of agents, of course over the years I've heard the criticism many times is, oh, they're just order takers. And when the market is really good and the business just sort of beats a path to your door, that is kind of true, isn't it, Carla?

Yeah, it is. And we don't have to think long term and we don't have to have a vision for our business. We don't have to guide ourselves. We don't have to be so self directed. And today a lot of our kind of frenzy is because we don't know a lot about the technology coming up. If we're a little bit older and so we're in a frenzy, we're almost hysterical to learn about, you know, how to get onto Facebook and those kinds of things. When you look at the really big picture, you look at our businesses, we need to fit all that into our business rather than having that define us and consume us, because we're getting way off track with our business. In fact, let me give you a statistic, Jason. I know that you interviewed Stephan Swanepoel not too long ago. In Stephan's 2010 Real Estate Trends report, he mentioned a survey from the California association of Realtors. They surveyed buyers and they asked the buyers, on an Overall scale of 1 to 100, 100 being stunningly wonderful, how would you rate your agent experience? And you know, they rated them four.

Wow.

And that's down from 70 some percent.

So that's, that's really an indicator of career satisfaction then. Yeah, yeah.

Well, that was with buyers, not agents.

Buyers.

With their satisfaction with the agent. Yeah. With their experience with the agent. And part of it is that the buyers and sellers are going into these things not realizing the difficulty of short Sales and foreclosures and all that and the agents aren't well educated. Again, it's that overall arching thing of if you're going to go into a segment of the business, you better get darn good at it. And I think it was too easy for us. We didn't have to specialize, we didn't have to be really good at something. And so we kind of traipse into these REO and short sale areas without knowing what we're doing. We make promises to buyers that we can't. We don't have any control over banks, but we make promises anyway. So I think that's the low satisfaction levels. Here's my fear. If we don't get a handle on this, the client's going to march with their feet.

So it's a matter there of managing expectations of the client.

Absolutely.

Where will the clients march to?

Well, they will march either to their own devices or they will march to Internet or online based services that are less expensive. In other words, if they don't feel that those, the generous commissions that the 4Real agent is charging, if they don't feel they're getting their money's worth, they're just not going to pay for it, they're going to march to Internet based companies, kickback companies, or they're going to do it themselves because right now they're not feeling like they're getting their money's worth. And I mean I was stunned with that. I was stunned. Four out of 100. So that brings us really back to this big picture. We need to be less concerned about playing computer and much more concerned about serving that consumer properly at point of contact.

I would definitely agree with you there. It's the, it's the old sort of high tech, high touch balance if you will. Certainly technology is important to our business in the real estate industry or in any industry, but it can really be a distraction. I mean people don't pay a high price, a high commission rate for a computer based service. They pay that for a high touch service from a true expert who's career minded, who has a long term vision for their business and who knows what they're doing and gives that client a good experience, don't they?

Absolutely. Yes. You got it right. The only thing high tech is for is to support activities. It's just the execution of the activities. Again, being back to being a musician, you know, there are pianos all over the place. But if I didn't practice my little heart out and play since I was 4 and got a bachelor's degree in piano performance. The piano would not play for me. You know what player pianos sound like? They sound very good. And people don't come to hear. They won't pay 100 bucks to come to a concert or recital to hear a player piano. And that's what the agents are getting off track about and forgetting that those clients pay because of the agent's specific expertise and care for them. And that actually brings us into business planning because I want the agent to focus on where that business came from, what monies they're spending on it, and then focus on working their best sources of business, not their worst. A recent study just showed that although agents biggest sources of business were the traditional sources, we all know client referrals, return business open houses, this kind of thing. The agents were spending most of their money on direct mail and Internet marketing. And those were clear down the list of best sources. In other words, agents were spending money on worst sources and ignoring best sources. So I want them in their business plans. And this leads me to basically what should be in your business plan? I want to be sure that you, when you're doing your business plan for next year, you spend a lot of time in your review. Unfortunately, most business planning systems don't even have the review part. They just have what I call grids or squares where they say fill in how many money you want to make, how many revenue units that'll be. Have a nice day.

So Carla, back to your prior point. I think that it's really important for professionals to keep focused on the main thing. To keep the main thing, the main thing. I mean, that's one of my favorite quotes. And you have three different business planning systems. You have one for new associates, one for experienced agents, and one for management or leadership. How did you come to create these three and why are they separate like this?

Well, when I first started taking the CRB course as certified real estate broker, of course I'd been a music major, I'd graduated music. I have a master's degree in music theory. I'd never been in business school. I didn't know what a business plan was. All I'd done is that old style goal setting with my broker that I just hated because I thought it was just a guess. I didn't know any, you know, I didn't know there were patterns like there are patterns in music. So I went to the CRB courses, I learned the strategic planning process. So I went back and I was just new in management. I went back and I wrote a plan, but. And I tell all my audiences this, I didn't include the agents. Now the audiences always laugh. But the truth is most brokers make their plans without including their workforce, their agents and agents make their plans without knowing what's on the broker's mind. So it's very important to make those plans together. So I first created a plan from the office perspective and then I made that into a product called Business Planning for the real estate owner, manager and team builder. And then I made the same thing for agents because I knew goal setting didn't work for me and it, it wasn't working for my agents. And it took me several years to refine it so that when you use the planning system, you really can't get lost. It's not so ethereal that you start writing paragraphs about stuff you'll never do. And then I also created up and running in 30 days for the new agent because the problem with most business plans for new agents is they're too ethereal, they're too big. You know, where do you want to be in five years? Well, Jason, you and I know for running real estate companies, the agent doesn't know what to do on Monday at 9 o'. Clock. You don't have to worry about five years. They'll never be in the business. So I created up and running not from just the big picture, but from the priorities of what do we do every day, why do we do them, how the numbers add up and how we're going to segue from our startup plan into our long term plan. What's really interesting is the way I prioritize the up and running sources and the money spent. You really never reprioritize. Generally, most agents will never reprioritize. They'll get their priorities right in the first place. They'll get their numbers right and that will be what most people call a business plan. Long term, I don't, because a business plan has a review and all that good stuff.

Carla, I want to ask you a little bit about the plan itself because I think this subject is so amorphous to people listening potentially. Is the plan, is this a software product? Is it a written product where people fill in the blanks? How long is it? Just give us a kind of a really an idea of what that is all about because I think people can relate to it more easily if they just know kind of the basics. I mean, is this a one page plan? Is it some big long document? I know you said it's not too ethereal, so that's good. What's the plan itself look like?

Well, I'll speak to the agent planning system because that's what most of us are going to be listening to on this radio program. And by the way, the manager's planning system, very similar. It just instead of talking about getting leads as prospects, we're talking about getting leads as prospective recruits. So I'm going to do the agent. First of all, the planning system. My planning system is a hard copy with some coaching CDs that I've included audio so I can coach you through the whole thing and then some what I call documents. About 20 documents that you use that are on what I call document cd. It's not a software program. One of the problems with just software programs is it really doesn't. They don't teach you to think. They just have you filling in blanks and you can end up it's like the pianist who doesn't play with any feeling but just plays notes. And you and I have gone to many of those recitals where we're going, geez, didn't a person show up?

It's too methodical. It's just wrote rather than. It doesn't have verve to it.

Yeah, right. But at the same time we all have to have notes. So the notes or the music is the system itself. Because when I started doing this with agents and I used the tradition strategic planning process, I had it to Lucy Goosey to Ethereal and I'd have them write him strategies and tactics. Well, nobody can ever explain the difference of those. And they would write too big a picture. If I ever do this, I might do that, right? I'm like, that's not going to work. So I really narrowed it down. But what I want people to do is first to think through every part of their business, have some possible conclusions and then choose the best that's for them, given some education, training, parameters. So in my business planning system, I start them through the review process. Where was your business last year? What is important for you to look at? What does it mean to you? And then I give people a whole bunch of examples, not just here, do this and fill in the blanks. And the things that I think are important for them to look at in their business. For instance, listings taken to listings sold. Most of them don't look at that. They just look at listings taken. Well, that's not a way to make any money. The number of listings sold versus sales. They don't look at that either. Yet they all want to switch their businesses. So there are certain parameters in Their business very important to look at because they tell them those parameters, tell them the answers to what to do in their business next year.

And taking a listing doesn't even come close to meaning having a sale anymore in this.

Exactly. That's right.

Yeah.

So we started this program with my saying what worked five or six years ago simply isn't working today. And yet we've got to look at those parameters, that review. Then after we look at the review, then we can go ahead and figure out our objectives or what we call the goals. And then very importantly, breaking those down into certain areas and breaking them down into a lead generation plan so we know what we're going to do even every day. One of the problems with most planning systems is they're just as I said, the goal is the big goals and people, they have no relationship to what they're going to do every day. So when you take a look at their daily planner, it's all full of junk. You know, I'm going to research this or I'm going to play computer, I'm going to look at pretty houses. It's what I call business support. Or as I said to a class one day I was writing business producing, which are the things we know, our lead generation, working with people and selling. That's all business producing, business supporting is all the other stuff. And I wrote on the board just in a hurry, I wrote bs and yet we think about it.

Yeah, it's true.

It is, yeah. Right. So in up and running and in the business planning systems, I differentiate between business producing, business supporting, because if we get that right, then every day we can go in and we can say what am I going to do to make money today?

I think that's very true. Over the years, Carlin, all the agents that I've recruited, trained and the ones I see that make it in their career and the ones I see that fail in their careers or struggle in their careers at least they're constantly focused on like these tension relieving activities that make them think, feel like they're doing something. They give them sort of a psychological reward of going through the motions. But they're not the, the real shot. They're not the things that really create the money. And I remember many years ago one of these agents I worked with at my very first office when I was just starting out in my career, his name was Jim. And Jim was always getting organized and doing all these business support activities. This B.S. as you say, and I said of Jim, is that he was, he was constantly getting Ready to get ready. It's like the athlete who trains all the time but never plays a game. You've got to play a game and you've got to get in front of people. You've got to be talking to people. And that's actually kind of a good point since we're talking about business planning, not to go overboard planning too much. I'm sure you'd agree with that, right?

Oh, absolutely. I'm not a real detail person. I don't want to spend a whole lot of time on a plan. But what I do want to help people do is think through their business first and once they think it through and provide them this planning sheets so they can easily get to the end and get into action. Yeah, I was going to share. When you're talking about your gym.

Gym getting ready to get ready.

I knew nothing about sales. I knew nothing about nothing. And you know, I didn't. I always tell my audiences, I was so naive. I didn't. My boss said, you know, here's your desk, here's your phone. You got any questions, ask me. I was too naive to know the questions, but the first week I sold the house, the second week I sold the house. And the people in my little office were angry at me because I didn't know the inventory. So what they would do every day is they'd meet two or three of them and they'd get in their car and they'd go see inventory and especially brokers open that had good food. And I never did that. I just sold houses. I sold 40 houses my first year and they were, they really, really gave me the cold shoulder, so. Exactly right. So what? The reason that I want to have people work when they first begin with the right prioritized plan is that it teaches them what you and I intuitively knew. There are about a 1 out of 100 people get it. They're kind of intuitive about sales. But the other 99 have to have guidance. And that plan they first use is either going to give them right prioritized activities or wrong prioritized. And like you said of Jim, and we had a gym in our office too. Most of the time people start out with no plan or a poor plan, which then leads them to believe that they're doing productive activities like seeing lots of houses. Now, it's true you've got to know the inventory. But if you never talk to a human being, what does it matter? Getting those priorities right is very, very important. And your business plan has to intuitively lead you through that Process without getting you off track. That's why it's so scary for me, in a way to write these things, because I have to say to myself, is this a success assurance plan or is this a plan for a failed agent? Too many of these planning grids I see these 1 sheets have things on them like, go see all the pretty houses, go join a community group, blah, blah, blah, blah, blah. And like you said, Jason, it really keeps them out of trouble and it's low impact and they're proud of themselves. It makes them feel good and then they fail.

It's a sad story. It really is. What other things do you see agents do where they're sabotaging themselves? Things that they really just need to overcome and make this transformation to be successful?

Oh, that's a great question. So many things came to my mind, but, you know, most of my work today is with brokers. And what the brokers are saying to me all the time is, Carl, I can't get him to go to work and they won't be accountable to me. And so I would say, basically, instead of running away from accountability, which most of us do, up to about five years ago, I was the regional director for a very large franchise. In fact, probably becoming number one with all franchises in the near future. And I had to screen potential owners. And one of my questions was, have you ever been coached? Have you ever been accountable to anybody? Now, these were people that were going to own real estate companies. Most of them had never been coached and had never been accountable for really anything to anybody. Now we are a little accountable to our parents, but not much. Now they were the very people that were going to have to hire managers, hold them accountable, and the managers were supposed to hold the agents accountable.

Well, you know what they say is that in the real estate business, if you can't sell, you get promoted to management.

Yeah, yeah, exactly. Well, and we weren't looking for that because to me, I always thought it was hilarious when people say, well, they can't sell, they don't like selling makeup. A manager, so what are you going to do? Promote mediocrity? Because a manager does the same thing an agent does, just change the names. We have to lead, generate, we have to recruit, we have to work with people, we have to develop people, and we have to make the hard decisions of termination or turning that client loose. Anyway, I would say that the biggest mistakes we as agents are making today is not holding ourselves accountable to a career. There is no easy way to do it. This is real life in Fact, one of the people I coach calls it the new normal. I thought that was brilliant and I've seen that in articles lately. This is the new normal. Get over it. It's not going to change. And if it does, if it gets easier, guess what, you're going to be a bazillionaire. But there are so many people not doing the work. I have a new accountability program or accountability program that I'm licensing and training facilitators call Advantage 2.08 week program, holding agents highly accountable. And of course the agent said, well, I don't want to do that. I don't want to be accountable. And I'm like, well, then how do you expect to create a career? There is no magic way.

I couldn't agree more. I mean, so many people in our industry treat this like it's a country club job. Come in and chat with people and have a cup of coffee and do some busy work, wash the car, etc. And it just seemed to me in all my years of managing agents, if they would just treat it like a regular job, even though it's a business opportunity, they've got to treat it like a job in terms of hours. They've got to get up at the same time every morning, they've got to get into the office at the same time every morning. And it's up to them to do that because this industry is staffed by independent contractors. So you can't force them to do it, but they have to force themselves to do that and treat it like it's a real business.

Exactly right. Well, and you know what we talked about earlier about the client, the buyers in California saying, I am very displeased. I mean, a four out of a hundred, that's scary. That's absolutely scary. None of us would buy a car if it were that bad, would we?

No, absolutely.

We would not go to a restaurant if it were rated that bad. And yet we in real estate blindly stuck our heads in the sand and let this happen. So what I mean by the accountability is we all have to be accountable. The managers have to be accountable, and they have to hold the agents accountable for their own best interest. You know, we talk about. I always talk about performance and music. Jason, if you were to come to me for piano lessons, and I said, well, Jason, good. You just pay me the $50 an hour. You come in, I don't care if you practice, I don't care if you do anything. You just love it. Well, of course, after two or three times of paying me 50 bucks and you couldn't play, you would be very angry. And if I were a good piano teacher, I would have to fire you also. Except I didn't set it up, honestly, did I?

No, you didn't.

So, agents, if you don't know what the expectations of your manager for you are, go find out. Because if they're nothing, guess what? You're being treated as a failure. Isn't that scary?

Yeah, absolutely. Very scary. Very scary. Well, Carla, we've got a wrap up here, but kind of wrap this question, whole subject up for us if you would, and also tell everybody where they can get more information.

All right.

Thank you. Well, thank you, Jason. First of all, we just said that it's so important today to look at your business overall and look at it honestly. And the easiest way to do that is with a business planning system that forces you back to look back at what really happened, not just the feelings about it, but the numbers about it. And then gives you some advice to spring yourself forward into this new normal and a better career. Hold yourself accountable and find someone to hold you accountable. You know, nobody succeeds alone. I know as a musician, I always had a piano and a flute teacher when I was getting better as a performer. You don't get better by yourself. You do not get better as a performer on your own. You just tread water and get worse because your habits get worse. So get the business planning system review to know where you are reviewing. Get some help, get some coaching, get some accountability of someone that will encourage you because that helps you believe in yourself. If you don't believe in yourself, you're never going to take the risk to get into new normal. So that's my advice. Where you can get more information is on my website, just karlacross.com, c a r l a c r o s s.com and there you'll find signing up for a newsletter. And I've got a new ebook about getting to yes. Because it's really difficult for us to get a yes out of buyers and sellers today. So I've created an ebook for you.

Thank you for that. And you've got a promotion for our listeners too, right?

Carly, I've got a promotion just for you. If you go on my site and go to my shopping cart and buy one of the business plans, that's either the business planning system for the real estate agent or the business planning system for or business planning for the real estate owner. Either one of those manager and just type in the coupon plan. You will automatically get 10% off. They're regularly $99.95 plus some shipping, but you'll get 10% off your order when you do that. So just go in, order one of those two plans, whichever is right for you. Just type in on the coupon plan plan and you'll automatically get 10% off during the promotion time.

Excellent. Carla. Well, thank you so much for joining us today. And you know, one of the things that we didn't really talk about directly, although you kind of alluded to it earlier, as challenging as times are right now in our industry, it is fraught with opportunities. And one of the things that I found over the years back when I was in traditional real estate is that as an agent in these types of markets where it's a quote unquote down market, the competition just really goes away. And the serious people who have taken the time to plan their business, to look back and review their business from the prior year, just like you're saying to our listeners, can really, really just gobble up huge, huge shares of the marketplace as their competition just falls away. So I think this message is very timely, Carla, and all of the listeners go to carlacross.com and take advantage of those opportunities. And we thank you so much for joining us today.

Oh, my pleasure, Jason. Anytime.

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