It's time to address something that's really a closet issue in our industry. It is so rarely mentioned in mixed circles and looked upon with such fearful consideration that you might not immediately recognize the word: profitability.
That's right -- profitability is still a major problem in North American real estate. It seems we have hundreds of superstars with big grosses and no nets. Everywhere I go, I see panelists talking about amazing systems that produce amazing results and amazing amounts of buyers and sellers. There's just one problem: they're taking piddly amounts of income home in their pockets!
The more I tour this country and train agents, the more I'm convinced that the work-to-reward ratio in the real estate industry is one of the highest in the industry. Why? We get too busy to pay attention to simple business strategies.
When I say "business strategies," I'm not even referring to the hundreds of lead-generation modes and prospecting systems that I teach which are exclusive to the real estate industry. I'm talking simple, Anyone's
The following list is compiled from my own operations and some of the smartest real estate practitioners in the industry. Please review this list on a daily basis for just 30 days. After your review each morning, work to abide by its simple laws. Before the month is over, you'll begin to see noticeable, profitable differences in your business.
1. Check all office supply acquisition lists before our purchase. Believe it or not, office supplies are one of the largest cash drains in your organization. Even if you're a one-person office, ask yourself these questions honestly before making a purchase: How often will these supplies be used? Can someone provide a service outside my office that will prove less expensive than buying these supplies? Have I researched the purchase of this product with three other suppliers to assure myself that I've found the least expensive one?
2. Test all direct mail before you send substantial amounts of it out.
3. Stop doing
4. Eliminate credit cards and all other debts above 16%.
5. Live on 90% of your income. This means that 10% is either saved (and not in a savings account with that automatic withdrawal mode) or invested in safe, long-term investments. Imagine that!
6. Write your own checks. Never let anyone but pay your bills until you're worth more than $10 million (an Andrew Carnegie truism).
7. Negotiate harder. Too many of us are taking the first price from printers, sign makers, and advertising mediums. 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 of minutes to fax your specs to a handful of bidders.
8. Cut staff with technology or delegation to less expensive entities.
9. Cut your expenses! Usually the same response can be had with a less expensive presentation. If your ad copy is compelling, it can just as easily go on black-and-white rather than four-color. I know -- I've tested this extensively. Your listing presentation does not need to include a
10. Do things faster. Remember, time is money! Cut the process down by using checklists or delegating certain tasks to other entities. In so doing, you will find that you have more time to make that extra hour of phone calls.
11. Watch the “I'm-too-busy-to-eat-at-home” syndrome.
12. Contact your past clients more often and make your contacts more effective. This is your gold database for many reasons beyond simple referrals.
13. Advertise where your returns are the greatest and immediately stop advertising that is not bringing in a 4-1 ratio. Focus your ad budget on the advertising venue that is pulling the greatest substantial results. This is where you waste most of your money. Change this practice immediately.
14. Spend an equal amount of time improving your services to buyers and sellers as you do prospecting for them. Schedule it in your day planner and make yourself pay attention to these service details. Unless you start developing a service regiment today, there will be no need to prospect in the future because you won't have a business.
15. Today, the difference in phone services is mind-boggling. Make sure you're with the least expensive carrier in your area. I review my phone service every nine months.
16. Cut automobile costs. Fancy cars are the worst investment you can ever make. This is spoken from loads of experience!
17. Focus on what you're best at. In every real estate agent's life, there's something that they enjoy doing, thus producing the most profit. Instead of believing you can do it all, go back to that one thing you're best at and really enjoy to double your efforts immediately.
18. Carry your shoulders back, stand up straight, look good, drink lots of water, get decent amounts of sleep, and eat well. Lastly, play when you're playing and work when you're working.
19. Many top real estate agents average $500 a month eating out at restaurants and subsequently gain an average of eight pounds a year. Not only is this an extra $6,000 that can be substantially cut from your annual budget, but also every pound shaved makes you that much faster against the competition.
I hope these reminders will keep you on the straight and narrow. Remember, a profitable real estate agent will always be the market-share winner in the end.
