Whether you are doing well financially or not in real estate, it's time to re-analyze your business.
What's working and what's not?
You need to look at your expenses.
Now you may be thinking "Oh, Dan's going to say to cut out all of my expenses."
Wrong!
But I am going to say to review your expenses and cut out those that aren't giving you an acceptable R-O-I (return on your investment).
What many agents do is spend money on marketing and advertising their listings and themselves without even considering if it's really worth it.
Or you over-promote your marketing plan to a seller and say that you'll do everything under the sun (because they said "XYZ Realty will do it."), when in reality, you can waste a lot of money and get zero results.
Are you spending money on items that are part of your business plan?
"Uhhh, I'm not sure" or "I don't know."
Don't just put an ad in the newspaper to appease a seller, who's not getting any showings. That's not the most effective use of your precious resources.
You need to implement the strategies that you designed in your marketing plan for each listing.
If you haven't done that, then start right now.
Before you take another listing, decide what you're going to spend your money on to help get that listing sold.
You need to determine when and how you're going to market your listing in the first week, the first month, after 3 months, etc.
That way you'll be in control and the seller can't tell you what to do in marketing their property.
There are 3 areas to consider when cutting your wasteful expenses:
1) Marketing & Advertising
Figure out how much you've spent so far this year and break it down into categories, i.e. newspaper advertising, real estate magazine, color brochures, internet marketing, lead generation systems, etc. Then look at which strategies are effectively working for you.
The purpose of this exercise is NOT to get rid of all of your expenses. That's crazy and is not in your best interest. All businesses have expenses, but you need to minimize them to focus only on those that are working and helping you increase your income.
2) Delegation
Do you have a full or part-time assistant?
What's working and what's not?
You need to look at your expenses.
Now you may be thinking "Oh, Dan's going to say to cut out all of my expenses."
Wrong!
But I am going to say to review your expenses and cut out those that aren't giving you an acceptable R-O-I (return on your investment).
What many agents do is spend money on marketing and advertising their listings and themselves without even considering if it's really worth it.
Or you over-promote your marketing plan to a seller and say that you'll do everything under the sun (because they said "XYZ Realty will do it."), when in reality, you can waste a lot of money and get zero results.
Are you spending money on items that are part of your business plan?
"Uhhh, I'm not sure" or "I don't know."
Don't just put an ad in the newspaper to appease a seller, who's not getting any showings. That's not the most effective use of your precious resources.
You need to implement the strategies that you designed in your marketing plan for each listing.
If you haven't done that, then start right now.
Before you take another listing, decide what you're going to spend your money on to help get that listing sold.
You need to determine when and how you're going to market your listing in the first week, the first month, after 3 months, etc.
That way you'll be in control and the seller can't tell you what to do in marketing their property.
There are 3 areas to consider when cutting your wasteful expenses:
1) Marketing & Advertising
Figure out how much you've spent so far this year and break it down into categories, i.e. newspaper advertising, real estate magazine, color brochures, internet marketing, lead generation systems, etc. Then look at which strategies are effectively working for you.
The purpose of this exercise is NOT to get rid of all of your expenses. That's crazy and is not in your best interest. All businesses have expenses, but you need to minimize them to focus only on those that are working and helping you increase your income.
2) Delegation
Do you have a full or part-time assistant?
Are they increasing your income by 5 or more times compared to what you're paying them? Do they have a lot of wasted time on their hands? I'm not saying whether or not you need them, but determine if they are increasing your profits or draining your pocketbook.
There are independent contractors out there who can be paid by the project or by a minimum number of hours per week or month. There are virtual assistants around the country, who get paid an hourly rate and only charge you when they've completed tasks for you. There may be services in your office that you can things for you. Take advantage of them. You can't do it all alone. You need to delegate. If you'd like more info on virtual assistants, just email me at dan@danweis.com.
3) Personal Expenses
How is your personal financial situation?
Really think about that for a moment.
Are you where you want to be today financially? Do you save money from each commission check to pay your quarterly taxes and save for retirement? Or do you just pay everything on a credit card and deal with it when the monthly statement comes in?
I know it can be scary out there.
A couple of weeks ago I saw Dave Ramsey at Xavier's Cintas Center. There was a traffic jam on the highway exit going to see him. He's written Total Money Makeover and Financial Peace University.
Here are 3 quotes from his materials:
Wall Street Journal ~ " 70% of consumers live paycheck to paycheck." For some of us, we can replace 'paycheck' with 'commission check'.
Bankrate.com ~ Only 32% of Americans would be able to cover a $5,000 emergency with cash, without going into debt for it.
NBC News ~ Only 3% of US citizens are saving in any type of an IRA.
You and I both know how real estate sales can come in cycles. You work hard to get 4 listings 'under contract' and 2 buyers sold. Then for the next 30 - 45 days you're handling inspection and closing issues and you're not working on new business. So the roller coaster goes!
You need to look at your personal and family expenses at home. Are living within your means or are you trying to keep up with the Joneses? Don't do that. On the surface, the Joneses look like they're doing great, but what you don't know is they've mortgaged their home to the max with a home equity loan to pay off their credit cards (not great to do in this market) and they still don't stop using their credit cards.
Review your monthly personal expenses. Which ones are necessities and which ones are purely optional? How are you living? Do you need the Super-Duper cable package? Can you make some changes? Do you want to make some changes? It's up to you.
Do you have any big-ticket items that you haven't used in years, but if you sold them, you could pay down or pay off some other bills?
I know this can be a deeply personal subject that most people won't talk about to their friends, family and, sometimes, even their spouse.
Financial indebtedness causes a lot of worry in many people. Yet, you see commercials on TV about how VISA and MASTERCARD want you to use your credit card for everything. Even the game of MONOPOLY is now using a credit card and NO CASH! We are being brainwashed!
CASH is bad...credit GOOD! Hogwash!!!
Take some time to sit down and look at all of your expenses. Analyze what you should continue doing and what you can stop doing and save some money.
Read some good, common-sense books on money management...Dave Ramsey's "Total Money Makeover", David Bach's "Automatic Millionaire", Robert Kiyosaki's "Rich Dad, Poor Dad", just to name a couple.
Changes won't happen overnight. They take time, but your decision to change can happen in an instant.
There are independent contractors out there who can be paid by the project or by a minimum number of hours per week or month. There are virtual assistants around the country, who get paid an hourly rate and only charge you when they've completed tasks for you. There may be services in your office that you can things for you. Take advantage of them. You can't do it all alone. You need to delegate. If you'd like more info on virtual assistants, just email me at dan@danweis.com.
3) Personal Expenses
How is your personal financial situation?
Really think about that for a moment.
Are you where you want to be today financially? Do you save money from each commission check to pay your quarterly taxes and save for retirement? Or do you just pay everything on a credit card and deal with it when the monthly statement comes in?
I know it can be scary out there.
A couple of weeks ago I saw Dave Ramsey at Xavier's Cintas Center. There was a traffic jam on the highway exit going to see him. He's written Total Money Makeover and Financial Peace University.
Here are 3 quotes from his materials:
Wall Street Journal ~ " 70% of consumers live paycheck to paycheck." For some of us, we can replace 'paycheck' with 'commission check'.
Bankrate.com ~ Only 32% of Americans would be able to cover a $5,000 emergency with cash, without going into debt for it.
NBC News ~ Only 3% of US citizens are saving in any type of an IRA.
You and I both know how real estate sales can come in cycles. You work hard to get 4 listings 'under contract' and 2 buyers sold. Then for the next 30 - 45 days you're handling inspection and closing issues and you're not working on new business. So the roller coaster goes!
You need to look at your personal and family expenses at home. Are living within your means or are you trying to keep up with the Joneses? Don't do that. On the surface, the Joneses look like they're doing great, but what you don't know is they've mortgaged their home to the max with a home equity loan to pay off their credit cards (not great to do in this market) and they still don't stop using their credit cards.
Review your monthly personal expenses. Which ones are necessities and which ones are purely optional? How are you living? Do you need the Super-Duper cable package? Can you make some changes? Do you want to make some changes? It's up to you.
Do you have any big-ticket items that you haven't used in years, but if you sold them, you could pay down or pay off some other bills?
I know this can be a deeply personal subject that most people won't talk about to their friends, family and, sometimes, even their spouse.
Financial indebtedness causes a lot of worry in many people. Yet, you see commercials on TV about how VISA and MASTERCARD want you to use your credit card for everything. Even the game of MONOPOLY is now using a credit card and NO CASH! We are being brainwashed!
CASH is bad...credit GOOD! Hogwash!!!
Take some time to sit down and look at all of your expenses. Analyze what you should continue doing and what you can stop doing and save some money.
Read some good, common-sense books on money management...Dave Ramsey's "Total Money Makeover", David Bach's "Automatic Millionaire", Robert Kiyosaki's "Rich Dad, Poor Dad", just to name a couple.
Changes won't happen overnight. They take time, but your decision to change can happen in an instant.
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