An Eye For Profit

An Eye For Profit

an_eye_for_profit“If you keep on doin’ what you’re doing, you’ll keep on getting what ya got.

From a Sonia Lee song

Many real estate business owners struggle to make a profit from their sales departments.

Although the market is often blamed, my experience is that a leader who does not make profit in a ‘tough’ market fails to make a profit when the market improves. I believe that such leaders do not have an ‘eye’ for profit.

The real estate industry is notorious for focusing on turnover.Franchises charge 8 percent of turnover, salespeople are paid anywhere between 40 percent and 95 percent of turnover, depending on the system used. Whatever is left remains with the office, which still must cover all of the expenses before the leader can earn any profit.

Traditional real estate training focuses on ways to bring more money into the office, to increase turnover. But turnover is not profit. It’s not how much you bring in that should be your focus: it’s how much you KEEP of the money you bring in that’s important.

An eye for turnover must be replaced with an eye for profit.

Why are you in business? It should be to make a profit, not to generate a large turnover.

If you are not happy with your office’s profit, I urge you to develop your eye for profit and do things differently – to quote Sonia Lee again, “If you keep on doin’ what you’re doing, you’ll keep on getting what ya got“.

Expenses

Cut expenses. Begin with non-performing salespeople. This is the biggest expense your agency incurs, but it’s often a hidden expense. Even commission-only salespeople who are not performing cost the agency hugely. Think about the listings they lose through their incompetence. You may not be paying them a salary, but if they lose one listing a week, at today’s selling fees such salespeople could be costing the agency at least $300,000 a year each.

There are two types of expenses in a real estate agency – fat and muscle. Muscle expenses help you win business – marketing for example. Cut a muscle expense and you will cause the agency to lose more in selling fees than the expense you cut.

Fat expenses are different – cut them and you won’t cause the agency to lose business. Little expenses add up, too. That water cooler might be costing only $10 a week, but that’s $600 a year, or $6,000 over ten years. Chill some tap water and keep the 6 grand!

Team Size

You don’t save money by keeping your team small. You will cost yourself profit by doing this.

Look upon good salespeople as an investment and not an expense.

But you need good salespeople. If you say you cannot find good people, this thinking is the problem. You can find good people if you have an effective hiring system. There are many people out there who would love a career in real estate. If you want a winning team, you have to go looking for them.

Pittard can help you with this, but whether or not you take me up on this offer, make building a team of WINNING salespeople your top priority.

Training

It amazes me that leaders try to save money by not training their people. I love the saying, “If you think education is expensive, try ignorance”. How true!

But don’t just train your people, TRAIN YOURSELF TOO.

Salespeople attend sales training. But if you are a business owner, you need business training and leadership training. Most business owners don’t feel they need this type of education, but when you consider that 90 percent of businesses go broke in the first five years, you can see how short sighted this thinking really is.

If the team trains in their discipline – sales – and you don’t train in your discipline – leadership – you will lose your best team members. Regularly. The ones who train, grow apart from those who do not train. Fact.

Think profit. Develop an eye for it. Constantly seek ways to make more profit. This is why you are in business.

Recent Articles

Financial Foundations

In my experience as a real estate agency profit consultant, I've seen many real estate businesses in grave financial trouble, and many spend thems...

Cut To The Chase

Have you ever noticed how some people say five sentences when a 'Yes' or 'No' would have sufficed? Some people speak a lot but say little. Real esta...

Loving What You Do

Some people say you must love your work. I agree that this is desirable, but it's not always realistic. Pursuing this ideal could cost you a ...

Faking Happiness

Written and video reviews are essential. To quote one winning salesperson: "These days, clients go online and do research on you. At the listing pre...

There's No Marking Time

Of all sayings, I despise this the most: "If it ain't broke, don't fix it". I have heard people use this phrase as justification for n...

Money In The Bank

What most real estate agents refer to as 'Marketing' is really nothing more than 'Advertising'. Advertising is just one small component of the large...

Free Shots

Some years ago, I presented a Field Challenges workshop in Perth. Participants submitted for discussion challenges they were facing in the field. ...

Problem Stacking

"Every task is accomplished piece by piece, and every problem is solved one by one. 'Problem Stacking' is a sure way to get nothing done", says re...

Profit Systems

In the eighties, management expert Michael Gerber coined a phrase that became popular across the world: "Work on your business, not in you...

Whose Bright Idea Is This?

It is no secret that far too many business people, salespeople and leaders, hold training in low regard. In this short leadership session, real es...

Why You?

Salespeople spend a lot of time trying to convince sellers how good they are. They talk about the advertising they do, the awards they've won, the res...

Smart Goals Aren't Enough

If you have received even a modicum of real estate training, you know about SMART Goals: specific, measurable, achievable, realistic, and achievab...

Want to reach your profit potential? Contact us now.

Pittard


Suite 71, Level 4
330 Wattle Street

Ultimo NSW 2007
Australia


Mailing Address
PO Box 2045
Strawberry Hills NSW 2012


: (02) 8217 8500
Fax: (02) 9281 4198
AUS Free call: 1800 663 600
NZ Free call: 0800 448 065
International: +61 2 8217 8500

: info@pittard.com.au

Contact Us