Want to know more?   Contact us today.

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 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.

Saving

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.

Low debt

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.

Investments

The sooner you start investing, the sooner you become wealthy. Save and invest in quality real estate and blue chip shares.

Winning Team

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.

Profit Systems

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?

Gary Pittard
Recent Articles

Marketing

When the market turns down many agency leaders wisely cut expenses. But there is a right way and a wrong way to do this. Cut the wrong expenses and yo...

The Forgotten Rookie Syndrome

Many salespeople either become sales managers or move into a leadership role as owners of their own real estate businesses. Gary Pittard, CEO of t...

Hard Tasks Pay

In 30 years I have interviewed countless winners, and have noticed one big difference between winners and their mediocre counterparts: ...

Make the Most of a Golden Opportunity

"This is truly a great career. I wonder how many real estate salespeople actually appreciate the golden opportunity their real estate career offer...

Think Profit

With another financial year behind us, it's a good time to ponder: "Are you happy with your profit?" Stating the obvious: Profit is the mo...

Succession Planning All Talk or All Action

In this short leadership session, real estate agency profit consultant, Gary Pittard, discusses Succession Planning. Many agency leaders talk abou...

Short Attention Spans

A common complaint from leaders is that their salespeople lack focus. It has a been constant theme in my 30 years as a real estate agency profit consu...

Ask for Price Feedback

Property sellers need accurate information from the market if they are to develop an understanding of the correct market price at which their prop...

Hiring Do's and Don'ts (Part 2)

This is a two-part article on the Do's and Dont's of hiring. Last month, we discussed the Hiring Don'ts. This month we look at the Hir...

Sharpen The Saw

Real estate agency profit consultant, Gary Pittard, recommends that leaders give their salespeople knowledge tests, yearly at least. If you think ...

A Foundation of Honesty

Below are snippets are from surveys conducted by Roy Morgan over a 17-year period. I have been following these surveys for 25 years and note the posit...

Happiness Is Relative

In this short sales session, real estate agency profit consultant, Gary Pittard, discusses happiness and its relevance to real estate sales. Happine...

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