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 money you keep after expenses are paid. I’m compelled to mention this because the real estate industry and its systems focus on turnover. Turnover is not profit.
Profit is seldom mentioned in typical real estate training.
So, are you focused on profit? If not, you should be.
There are two ways to increase your profit.
The first is to grow your business – increase income.
Without money, you have no funds to grow your business. Growth needs cash, and if you want to build a winning team, which will give you more profit and more free time, you need money to do so. It is far smarter to grow from profit than it is from borrowings.
My friend, Dave Anderson, author of Up Your Business, says, “You cannot shrink your way to Greatness”.
Building a team requires a foundation of intent and purpose. Set up attraction systems to increase your incoming hiring enquiry. Set up sorting systems to help you determine the winners and eliminate those who won’t make it. Set up training systems to bring out the best in your people, and set up induction systems to get your recruits off to a flying start.
Also set up sales management systems to keep the team focused on results over the long term.
Don’t have those systems? Pittard does. Let me know if we can give you a hand.
The second way to increase your profit is to reduce expenses.
Know your Break Even Point (BEP). How many sales do you require to break even?
Profitable businesses are built on a platform of solid financial foundations. The most fundamental of all financial foundations is to know the point at which all expenses are covered and you begin to make profit.
To maximise your profit, you should do both – increase your income and reduce expenses.
Sometimes leaders are too busy listing and selling to focus on profit. The trouble is, you can be busy bringing income into the business while large sums go out.
It’s like filling a bucket with holes in it: you pour the water in at the top, only to have it leak out at the bottom.
Think profit. May your next financial year be profitable!
PS Pittard periodically broadcasts a webcast entitled How To Make Sales In a Tough Market. This webcast is free and designed for agency principals. It is by invitation only, as we cannot accept some agents owing to contractual obligations to our current members. For more information and to check your eligibility, please follow this link.