20 Rules to Greater Net Profits:
I keep hearing it. Profitability is still a major problem in North American Real Estate. It seems we have lots of superstars with big grosses and no nets.
Everywhere we go we see panelists talking about amazing systems and teams that produce amazing results and amazing amounts of buyers and sellers. One problem! They're taking average amounts home to the bottom line. The work to reward ratio in real estate is high! Why? We get too busy to pay attention to simple business strategies.
Please review the following list and try to hone it or add to it on a daily basis. This list is compiled from my own operations and it is easy to keep up once you see the money going into the bank instead of overhead:
1. Look at the office supplies acquisition lists before you purchase them. Believe it or not, office supplies are one of the largest cash drains in your organization. How often will they be used? Can your vendors provide it in a service they are already providing? Is there a less expensive way?
2. Test all direct mail before you send substantial amounts of it.
3. Stop doing lead generation activities unless they are at least a 4-to-1 ratio of gross to cost. If you can't prove there is a gross, but still think it's a good idea to do it- Think some more!
4. Eliminate credit cards and all other debts above 9% with real estate loans.
5. Live on 90% of your income. Meaning, 10% is either saved or invested. If you don't… you will have buyers in your car until you're 85.
6. Write your own checks. Never let anyone else but you pay your bills until you are worth more than $10 million (an Andrew Carnegie truism). It allows you to reflect on their importance, their need to exist, and it just plain gives you a sense of reality.
7. Negotiate harder. Too many of you are taking that first price from printers, sign makers and advertising mediums. Either come back with a counter offer, use someone cheaper, or get multiple bids. As an example, we just asked for bids on five products from six printers. Though we gave the very same detailed specs to all six, the bids ranged from $11,000 to $57,000! Take a couple minutes to fax your specs to a handful of bidders!
8. Cut staff with technology or delegation to less expensive entities. Never sanction incompetence and remember modern real estate software can replace an assistant stuck in the 80's.
9. Cut your services! Usually the same positive listing can be had with a less expensive presentation. If your presentation is compelling, it can just as easily go out on black and white with less promises of advertising! I know I've tested it.
10. Do things faster. . . Remember time is money! If you can cut the processes down by using lean and mean checklists or delegating items to broker paid staff or affiliates you will find that you will have more time to make that extra hour of phone calls.
11. Watch the I'm-too-busy-to-eat-at-home syndrome. At least pack your lunch! Dinner and lunch out all the time will make you fat - and if taken with other real estate agents, can sometimes depress you!
12. Contact your past clients more often, and make your contacts more effective. This is your future business. Pay attention to the acquisition, implementation, and organization of your database. Repeat and referral clients are still the cheapest and the best!
13. Spend a larger amount of time improving your services to buyers and sellers. Unless you start developing your service policies today there will be no need to prospect in the future, because you won't have a business.
14. Quit spending time hanging out in the office. Nobody there buys or sells through you. I was only there for phone work and buyer appointments.
15. Today, the differences in phone services, insurance, maintenance contracts, and utilities are staggering - pay attention!
16. Cut car costs. Fancy cars are the worst investment you can ever make. (This is spoken from loads of experience). Buy used!
17. Focus on what you are best at. In every real estate agent's career there is something that they are the best at and subsequently, produces the most profit. Instead of believing you can do it all, go back to that one thing that you are best at and double your efforts immediately!
18. Carry your shoulders back, stand up straight with a smile on your face, look good, drink lots of water, get lots of sleep, eat well, play, and play when your playing and work when you're working. Call your mom.
19. If you ever here in a seminar - "it's a great whistle and bell," or "it really impresses your client" it is usually someone that is trying to sell form over substance. Make sure you have substance before form!
20. Show up, tell the truth, and don't be attached to the outcome.
I hope these reminders will keep you guys on the straight and narrow. Remember that a profitable real estate agent will always be the market share winner in the end.
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