Take control of your business!
Think Like a CEO!
Here are three ways you need to take to get on the right track.
The market is back. Your business is growing. You’ve added staff. Things seem to be going great. Everything is perfect, right? While a booming business is wonderful, profits and growth bring with them a whole new set of problems totally separate from the day-to-day running of your real estate business, and if you want to maximize profits and keep overhead down, there’s still plenty of work to be done.
Here are three simple examples you need to know to control your growing empire.
1. Understand Profit and Loss
This is the most crucial element to running a successful business, and its scary how many real estate professionals are totally clueless about it.
Do you know how much money you retain for every dollar that you earn? How about marketing costs per listing? Or money spent per agent on your team?
That needs to change now.
Without data, you can’t formulate a plan. Without a plan, you won’t have anything to guide you. That is a sure-fire recipe for unnecessary expenses to eat away at your profit margins.
Know what it takes to run your business, and review those figures at least once a month to make sure every expense is justified and you’re saving enough for a rainy day.
2. Implement Budgets
At the beginning of the year — with reviews at least quarterly — the key people in your organization need to sit down and review what you’ve spent and what you expected to spend.
It is crucial to track the metrics that allow you to assess the effectiveness of things like marketing dollars so you can make the best decisions with your money.
If you don’t have a budget, and you don’t have set times to review what you wanted to spend and actually are spending, it’s just too easy for unjustified money to fly out the door.
3. Check the Checkers
As CEO, you know by now that you’re going to need help. Hopefully, you’ve been able to delegate nonessential functions to other people. However, if all you did was delegate without creating the systems that hold those people accountable, you may be throwing money and business out the window.
I’ve made a point of keeping on top of this over the past year. So far, I’ve had great results. By staying on top of the people and companies we do business with, we are able to immediately remove unnecessary expenses, services, and personnel without wasting money for months figuring out we could have done differently. Everyone is held accountable, and we maximize the impact of our dollars spent.
It’s not enough to just sell. The best real estate pros run their businesses like CEOs, and part of being a good owner is knowing what’s going on with your company. But when your expenses are low, your profits are high, and all the details are under control, think about how many more people you can meet and how many more houses you can sell with all that extra money and insight.