I am not telling you anything you don’t know when I say that rent rolls sell for big money. But what about your sales department – how much is it worth?
Many, if not most, real estate agency owners place little value on their sales department. They believe their sales department isn’t as valuable as their rent roll.
There are two reasons for this:
- The sales department’s income and profit fluctuate and are often market dependent.When the market is good, the sales department makes money. Then the market changes to a buyers’ market, the sales department struggles to make a profit.
If you doubt that, think about the real estate groups listed on the stock exchange. When the market was down, so were the share prices of those listed groups. “Profit downgrade” was the term used. At the time of writing, we’re in a sellers’ market and the share prices of those groups are up.
Rental departments seldom experience such market dependent fluctuations.
- The sales department’s income and profit are dependent on the principal’s sales production.You cannot sell yourself. If you are the primary producer of income in your sales department, the value of your sales department is significantly devalued. When you leave, so will the income you produced.
And if your plan is to sell but stay with the new owner and work as a salesperson, seldom does that succeed.
Most real estate business owners have given up on building a winning team. We constantly hear the excuse – and it is an excuse – “You can’t find good people“. That belief alone is sufficient to stop you from filling your team with competent people. They are profit killing words!
At least ten real estate businesses using Pittard systems make profits in excess of $1 million, WITHOUT the principal having to list and sell. How much do you think those sales departments are worth?
There will be people who say, “That’s because the market is booming“. To those people I say, “Are you making a million-dollar profit without needing to list and sell? Isn’t your market booming too?”
Winners, whether leaders or salespeople, are often regarded as freaks by those who aren’t winning. It’s far easier to call somebody’s performance freakish than it is to look at what those leaders and salespeople did to succeed and then do the same.
But that does not mean that it can’t be done; it simply means that those people don’t want to do it.
With the right people, training, and leadership, your sales department can make large profits without your production being required to pay the bills.
You will need recruiting, induction and training systems, and you may need to work on your leadership skill, but it can be done.
If you are up to the challenge, if you want to build a PROFITABLE AND SALEABLE SALES DEPARTMENT, give me a call on +61 2 8217 8500.
Gary Pittard