Take a minute and look around your agency. Everybody looks busy, don’t they? But are you making money? Are they making money? If you’re not careful, you may mistake busyness with production. Remember – not all activity is created equal!
In all jobs, including yours, there are only two types of activity:
ACTIVITIES THAT LEAD TO RESULTS AND ACTIVITIES THAT DON’T. MORE
Leaders must be vigilant to ensure that time is devoted to productive activity. The art is to do so without micromanaging.
Activity designed to make people look busy is what we call PTBB – Pretending To Be Busy. To limit PTBB activities, leaders must ask questions like “What are you working on right now?”
If the question is met with a pause, or an “Um”, you have probably just caught out a PTBB. When you identify that a person is working on a PTBB activity, give them a productive task to do immediately, like prospecting.
Whether it’s your receptionist, a secretary, a BDM, a property manager or a salesperson, there are activities that will lead you closer to results, those that are routine, and those that waste time.
Results-linked activities are priority number one. Get these done first. Routine is second on the queue, but never at the expense of doing a results-linked activity.
Waste-of-time activities should not be done by anyone!
Often our offices are called ‘work’ – “I’m going to work” is a statement people use to describe where they are going – the office – but ‘work’ in this context is not a noun – it’s a verb. You don’t GO to work, you DO work.
Activities that waste time are not work. They are an indulgence that comes from unclear job descriptions and a warped sense of priority. Leaders, we must look out for such activities and stamp them out. We must get our people focused on results-producing actions.
That is, if we want to make a good profit.
In my experience as a real estate agency profit consultant, I’ve seen many real estate businesses in grave financial trouble, and many spend themselves into oblivion. For businesses to survive and thrive, they must be built on solid financial foundations.
This is explained in depth in our four-day presentation of the Agency Profit System®, but here are some important foundations that all leaders should strive to have in place. MORE
Individuals and households that spend all they earn are just one pay-day from bankruptcy. Businesses are no different. If you aren’t saving, you have no buffer for lean months.
Expenses under control
One office spent $112,000 in a single month on premium advertising. That’s what we call “Double-D” – Dumb and Dangerous. This money was spent because the agency’s salespeople did not know how to list properties without committing the agency to massive advertising spending. If you think the agency recouped the expense through Vendor Paid Advertising, you’d be wrong.
If a fraction of that money was spent on training the team, they would list properties without the requirement for massive advertising or fee discounting. This agency’s expenses were out of control – but they are not alone.
Borrowing to buy investments is perfectly fine, provided you don’t extend yourself too far. I personally do not feel comfortable with more than 30% debt-to-equity, excluding the family home.
‘Dumb Debt’ is the worst debt. Dumb Debt is borrowing to buy anything that goes down in value – car leases, equipment leases, credit card spending where the debt is not paid out at the end of each month. Spend too much on Dumb Debt and saving will suffer.
Family home fully paid
When you go to bed, owning the roof under which you sleep is an essential goal. Pay out your home, and don’t use it as a gambling chip by securing it against business spending.
The sooner you start investing, the sooner you become wealthy. Save and invest in quality real estate and blue chip shares.
Businesses haemorrhage huge amounts through team incompetence. Every time salespeople lose listings to the opposition, it costs the agency dearly. It would be the biggest financial loss in most real estate offices, in addition to the damage caused to the company’s reputation by having incompetent representatives.
Training is a bargain by comparison to losses through incompetence of the team and the leader.
Income is not profit. If you want to maximise your profit, you need to take your focus off turnover and put it onto profit. You need profit systems to ensure that this happens. This is why so many agency leaders use Pittard’s Agency Profit System®: profit does not happen without systems!
Profit is not a dirty word!
Buildings without solid foundations crack over time. The same is true for businesses. Profit is not a dirty word. There is nothing wrong with making a profit, provided you do so honestly.
In fact, if you are a business owner, it’s your duty. Why else did you go into business?
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 not training, not leading, not prospecting, not developing a team, as justification for leaving things exactly as they are.
To illustrate how stupid and dangerous this is, let’s apply it to your car. Would you drive your car, kilometre after kilometre, never adding oil, checking the tyre pressure or having it serviced? Would you just drive it into the ground?
Why not? “If it ain’t broke, don’t fix it!”
Treat a car this way and soon it will be ‘broke’ and you will need to fix it. A hefty repair bill will follow.
Imagine if you did this to your business!
Sad news: MANY LEADERS DO!
Leaders who don’t study leadership or work at developing their teams, who fail to determine a culture and set standards, fail to control expenses, fail to keep a watchful eye on profit, who lack discipline, are leading their companies downwards.
There is no marking time. You can’t stay exactly where you are.
You’re either going backwards or forwards, and it’s up to you, the leader, to decide in which direction you will take your company.
Great leaders constantly fine-tune their company and their team for peak performance. Leaders who fail to do this are attempting to mark time, not realising that they are, in fact, going backwards.
A leader who thinks, “If it ain’t broke, don’t fix it” may have a business that is doing fine now, but it’s only a matter of time before the business will be ‘broke’ and the leader in damage control – and probably broke too.
Ditch the loser saying and replace it with this one:
“If it ain’t broke, build on it!”
In the eighties, management expert Michael Gerber coined a phrase that became popular across the world: “Work on your business, not in your business”. A lot of us were very excited to hear that.
I still am. However, I saw a few people send their business bankrupt and then blame Gerber’s maxim. Let me make it clear: it wasn’t Gerber’s fault. His ideas were sound then and now. What these leaders overlooked was the word “Work”. WORK on your business… MORE
Over the ensuing decades, I saw some leaders turn their back on their business by appointing an ineffective manager who ran the business into the ground.
And the “Work” that was supposed to happen? It didn’t happen either. The systems urged by Gerber failed to materialise.
Another of Michael Gerber’s maxims was:
“Systems run the business. People run the systems.”
This is what these leaders were supposed to do: find or design profit systems for their businesses. Without profit systems, a business is highly susceptible to the winds of change, especially the market.
Some businesses generated large sums, often from income generated by the leader, but turnover and profit are different things.
These are some of many systems a real estate agency needs to maximise profit.
Big profit requires comprehensive profit systems.
How would you rate your profit systems?
In my work as a real estate agency profit consultant, I have heard all the excuses. It’s twenty years since I heard a new one. The complaints remain the same. The same conversations we had in the nineties are still around this century.
One of the top complaints is from leaders: “I can’t get salespeople to focus!” Two others are “It’s different in my area” and “I can’t get my people to prospect”. MORE
Getting salespeople to focus is a topic all on its own. To get salespeople to focus there are seven major actions that leaders must tackle with each team member, in one-on-one meetings. If you would like to learn more about how to do this, contact us for the next screening date of the webcast Prospecting: how to get salespeople to FOCUS.
But what do you do when salespeople won’t do the actions?
In profitable agencies, leaders hold their salespeople accountable for actions.
These leaders set action expectations with their team members, and then record and monitor those actions with a Weekly Call Report.
The Weekly Call Report measures the level of actions for each salesperson in a number of areas, including:
When leaders gather statistics and interpret them, it becomes very clear who is doing the actions becomes very clear. Remove the uncertainty around the numbers – count actions and hold your people accountable for them.
While monitoring actions and determining ratios are important, there is one big question leaders should always consider:
What are the consequences in your agency when people do not do the actions?
The consequence of doing the actions is results. The consequence of a lack of action is mediocrity. But is that the only consequence? It shouldn’t be.
Great leaders never tolerate mediocrity. They train their people and set action expectations. If those actions are not performed, they counsel the salesperson and retrain if necessary.
After that, however: no more chances. The consequence for inaction, then, is dismissal. This is fair enough. If they won’t do the actions, what are they doing there?
I love the saying, “If you can’t change your people, change your people“. If you have “Won’t Do’s” on your team, and they won’t change their ways, PART WAYS.
Invest your time, energy and money into the right people. Profit will be your reward.
Multi-tasking is a myth.
While performing two straightforward chores at the same time is easy – you can stir the custard while talking on the phone – it is folly to think that this transfers to complex tasks. The law forbidding texting while driving is for good reason – you cannot safely do both at the same time. Likewise, you cannot perform other complex tasks simultaneously. MORE
One ‘deadly combo’ of tasks that should never be performed together is selling and leading – trying to lead a team while being heavily engaged in listing and selling. When you are selling, you are NOT leading.
If you own a real estate business, and are a principal who sells, you should examine your reasons for doing so.
Do you sell because you need to bring money into the business? If so, why?
While I understand that you need to sell to keep the doors open, unless you address the reasons why you must sell, you will always be a slave to your business. Your business needs leadership, urgently!
Do you prefer selling over leadership?
If so, why have you got a real estate office? Leadership and Sales are different skills. If you are working hard as a salesperson and not making much profit, sell the business and work for somebody else.
Do you think you can do both?
Perhaps you can, and there’s an easy way to find out:
Examine your previous year’s income. Subtract the income from the Property Management Department and income generated by you. How much is left? What is the profit, or loss, on that income?
If the profit is low (under $200,000), or if there is a loss, clearly you cannot lead and sell. Your business needs leadership!
I don’t mean to offend you by making these statements, but too often agency leaders measure their success by how long they have been in business. This means nothing!
Measure your success by the PROFIT you make, profit generated by your Property Management Department and by your Sales Department, MINUS any fees generated by you. Your profit should exceed $400,000 per annum without you needing to list and sell.
If you’re not making this profit, there is room for improvement, and certainly for more leadership.
And if you want a hand to figure out a way forward, please let me know.
Many people who open real estate agencies expect it to be easier than it eventually turns out to be. Many suffer from the Field of Dreams thinking, “If you build it, they will come”. That doesn’t happen very often.
It does not take long for agency owners to realise that Get Rich Quick is not a plan. Most times, business is a hard slog, which can be made harder by a lack of planning and a lack of training. MORE
In almost three decades as a real estate agency profit consultant™, I have seen few agencies that have a business plan. While get rich quick is not a plan, neither is it smart to have no plan at all – at least if you want to become financially independent through your business!
If by now you have realised that get rich quick is not a plan, and if you do not have a business plan at all, may I ask, are you happy with the profits you make from your residential sales department?
Now, take out your own PERSONAL PRODUCTION. Are you still happy?
If you are not happy, this means that your sales department would not be profitable without your own personal production. While you are in this state, you do not have a business, you have a job – essentially, as a salesperson in your own company.
Consider doing something different. Formulate a business plan – take control of the direction of your business.
And if you need a hand with a good plan, please do contact me.
As leaders, we should be the ones setting the standards in our businesses. One standard that should be compulsory is Excellence. Is Excellence compulsory in your agency?
There is an old saying, “Anything worth doing is worth doing well”. No doubt you have heard this gem. I agree with it wholeheartedly.
If we are going to do anything, shouldn’t we do it well? Personally, I’d rather be known for quality than mediocrity, or carelessness. I am sure you feel the same way. I have great difficulty understanding why anybody would want their name applied to anything less than excellent. MORE
I don’t claim to be the best at everything I do, but I like to think that in everything I do, I give my best. Ask me to do something, and I’ll do my best to deliver something that meets or exceeds your expectations. I regard this as an obligation – if I say I’ll do something for you, as a matter of pride and courtesy, I’m going to give you my best.
Show the way
Leaders must show the way. Whenever we commit to our teams to do something, we give it our best effort. Quality work is a fine example for leaders to set for their team members.
And when we do it, we have every right to expect the same from our team members. We do it, so they must too:
These are just examples, but you get the idea. In business, giving less than your best is a sure path to low profit. Allowing mediocre people to fester on your team sets a bad example to those team members who look to you to set and enforce standards.
Excellence is a standard that no business can afford to do without. Are you serious about building a great business? If you are, you will become the best leader you can become. And you’ll send this message to your entire team:
Be excellent or be gone!
In almost three decades as a real estate agency profit consultant™, I have worked with many leaders and interviewed many more. Over this time, I have heard many leaders say, “I can’t seem to motivate… [insert name here]”.
Leaders who say such things do not appear to understand the source of motivation: motivation comes from within. Leaders cannot motivate people – it’s a waste of time trying – we all must motivate ourselves. MORE
Inspiration is different to motivation. The dictionary definition for motivation is “enthusiasm for doing something”. The definition of inspiration is “someone or something that gives you ideas for doing something”. As leaders, we can inspire people, but each person is responsible for his or her own motivation and drive.
Prospecting is one task that leaders struggle to get some salespeople to do. Let me rephrase that: prospecting is one task that leaders struggle to get the WRONG salespeople to do. With the right ones, it’s not so hard.
People who are motivated – driven – who set goals and happily work toward achievement of those goals, are easier to lead. For these people, prospecting takes them closer to their goals; it’s a necessary task in the journey toward a successful life.
As leaders, we can help our salespeople to clarify their goals, decide what they really want and are willing to work hard to achieve. We can inspire them, acting as a sounding board. We can help them see the bigger picture, then help them to set goals and plan the actions necessary to achieve those goals.
But trying to motivate people who are not motivated, who aren’t passionate about Excellence, is draining for leaders. We can threaten and nag, but if there is no motivation, it won’t happen.
What leader in his or her right mind would keep salespeople who are not motivated? Compare the listing presentation to somebody who is driven, passionate and motivated to the listing presentation of an unmotivated plodder. Whom do you think would do the best listing presentation?
You know the answer, and so now for another question: do you want less than the best representing your company?
Yes, we can be inspiring, and we should be, but trying to inspire the unmotivated is like giving medicine to a dead person. Face the fact that you cannot do your people’s wanting for them. If they cannot bring enthusiasm and motivation to their work, find somebody who will.
Do you really want to work with the unmotivated? I don’t!
In my 25 years as a real estate agency profit consultant, I have often heard leaders complain that they can’t find good people. A second complaint is that they can’t get salespeople to do the winning actions necessary for success. Prospecting is always top of that list of actions they can’t get people to do.
When are we going to stop whinging and start acting to fix the problem?
Great leaders set standards. Great leaders have Non-Negotiables. Depart from these and you no longer work on the team. MORE
If you are willing to set standards and insist that those standards are met, you are taking firm measures to set your company culture. This can only be a good thing!
Do you have Non-Negotiables in your company? If not, what are you waiting for?
Some leaders are too strict with their teams. Others are too soft. There are problems with being at either extreme.
Soft leaders should not be in leadership positions. They seldom build excellent companies. They rate avoiding conflict higher than they rate setting standards and enforcing them. If these leaders do build excellent companies, it is often because they have deputies that have the real control. MORE
When leaders are more interested in being liked than they are in developing their people, they accomplish neither – they fail to bring out the best in their people, and while they may be liked, are usually not respected. Often, they are pitied by their teams – pitied for being too soft, for allowing people to be slack, sometimes allowing people to get away with outrageous behaviour.
These leaders are most likely to keep the wrong people and by failing to set and enforce standards, harbour mediocrity in their teams. They most often fear their teams, fearing that if they call people out on unacceptable standards, those people will leave.
Occasionally these leaders do have winners on the team, but the winners soon move on once they lose respect for their soft leaders.
Leaders can be too hard on their people, too. But strict leaders are often strict about everything and can micromanage to a point where their people are afraid to show initiative, and even more afraid to convey bad news to their leader.
These leaders often fail to celebrate results and, while they are quick to point out what people have done wrong, can feel awkward metering praise to their people. Their offices are often dour places to work, with very little fun.
One leader I know recently forbade his two salespeople to have lunch together. What did he think was going to happen – a conspiracy? I can’t even call this strict leadership – it’s downright dumb leadership. This leader has precisely ZERO salespeople now!
Some wear their strict leadership as a badge of pride, but being too strict can be as ineffective as being too soft. Strict leaders lose people, many who could have become winners had they received good leadership.
Extremes of strict and soft are not good. I am not suggesting middle ground either.
Good leaders set standards for their people and, when people fall short of those standards, they are counselled, retrained if necessary, and terminated if they continue to fall short of the standard. If termination is required, they do it swiftly, but always with kindness and compassion.
But there are times when leaders must also allow minor things to pass without comment. Teams can get under pressure and leaders must release the pressure occasionally, or good people will leave. A bit of fun does wonders.
Good leaders have range in their leadership styles. Strict when necessary, uncompromising when necessary and soft on occasions. Always we must show our people that they are important to us, and the best way to show that is to be interested in them, and work at bringing out the best in them.
Avoid the extremes, they burn good people and kill profit.
There would not be one business leader who doesn’t know that it is easier to lead the right people than it is to lead the wrong people. Despite that, many leaders continue to keep the wrong people on their teams. Why do we do this to ourselves?
I spoke with a leader recently. He has a ‘salesperson’ who has been with him for less than one year. Despite having no previous experience in real estate sales, she refuses to attend training. She is ignorant, and intends to stay that way. MORE
The issue is confused as she is making sales, but she sells her colleagues’ listings because she is low on stock and her stock is overpriced. Her stock situation is unlikely to improve because, in addition to her refusal to train, she also refuses to prospect.
What value is this person to the team? I believe none. I asked the leader what he intended to do about this person. He said, “When I get back to the office, I’m going to read her the ‘riot act’”. I said, “There’s another option. Fire her”.
I explained to the leader that there is no hope with a person like this. Without training, she will never improve. Without prospecting, she will never contribute to the company’s saleable stock. And her personal culture is not one of pursuing excellence, but one of mediocrity.
“Why do you do this to yourself?” I asked. The look on this leader’s face told me that this person was going to continue working with the agency, spreading her lessons of mediocrity to the rest of the team. Winners seldom ever positively influence the mediocre people; it’s the opposite – the mediocre infect the winners.
Leaders who tolerate mediocrity endorse it.
The death knell for a salesperson’s career is a disregard of training. Keep them and you send a message to your team that you are a weak leader who has no intention of building a great company.
Your team may feel sorry for you, they may think you are a nice person, but is pity the emotion you want when your team thinks of you?
I know why this leader will keep this person, for a little while longer at least. It is because he is not hiring. He doesn’t have a likely replacement for her.
Hiring is your insurance against mediocrity. If you won’t hire, you are stuck with the team you have. If it’s a team of winners, good luck to you. But if you are tolerating mediocrity because you have no other option, I ask you again: WHY DO YOU DO THIS TO YOURSELF?