8/7/2007 --
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You Mean You Can Be Profitable?
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It's time to address something that's really a closet issue in our industry. It is so rarely mentioned in mixed circles and looked upon with such fearful consideration that you might not immediately recognize the word: profitability.
That's right -- profitability is still a major .jpg)
 problem in North American real estate. It seems we have hundreds of superstars with big grosses and no nets. Everywhere I go, I see panelists talking about amazing systems that produce amazing results and amazing amounts of buyers and sellers. There's just one problem: they're taking piddly amounts of income home in their pockets!
The more I tour this country and train agents, the more I'm convinced that the work-to-reward ratio in the real estate industry is one of the highest in the industry. Why? We get too busy to pay attention to simple business strategies.
When I say "business strategies," I'm not even referring to the hundreds of lead-generation modes and prospecting systems that I teach which are exclusive to the real estate industry. I'm talking simple, Anyone's Business School, street-smart strategies.
The following list is compiled from my own operations and some of the smartest real estate practitioners in the industry. Please review this list on a daily basis for just 30 days. After your review each morning, work to abide by its simple laws. Before the month is over, you'll begin to see noticeable, profitable differences in your business.
1. Check all office supply acquisition lists before our purchase. Believe it or not, office supplies are one of the largest cash drains in your organization. Even if you're a one-person office, ask yourself these questions honestly before making a purchase: How often will these supplies be used? Can someone provide a service outside my office that will prove less expensive than buying these supplies? Have I researched the purchase of this product with three other suppliers to assure myself that I've found the least expensive one?
2. Test all direct mail before you send substantial amounts of it out.
3. Stop doing ALL lead generation activities, unless they are at least a 4-1 ratio or cost versus gross income.
4. Eliminate credit cards and all other debts above 12%.
5. Live on 90% of your income, meaning that 10% is either saved (overdraft protection feature) or invested in safe, long-term investments. Imagine that!
6. Write your own checks. Never let anyone but pay your bills until you're worth more than $10 million (an Andrew Carnegie truism).
7. Negotiate harder. Too many of us are taking the first price from printers, sign makers, and advertising mediums. Come back with a counter offer, use someone less expensive, or get multiple bids. As an example, we just asked for bids on five products from six printers. Though we gave the very same detailed specs to all six, the bids ranged from $11,000 to $57,000! Take a couple of minutes to fax your specs to a handful of bidders.
8. Cut staff with technology or delegate to less expensive entities.
9. Cut your expenses! Usually the same response can be had with a less expensive presentation. If your ad copy is compelling, it can just as easily go on black-and-white rather than four-color. I know -- I've tested this extensively. Your listing presentation does not need to include a DVD of you nor do you need to provide a four-color brochure on yourself. Your one-page résumé and list of services that are of benefit to the seller will close the listing presentation even more forcefully. Just pay attention to their goals.
10. Do things faster. Remember, time is money! Cut the process down by using checklists or delegating certain tasks to other entities. In so doing, you will find that you have more time to make that extra h
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