Author Archives: Chris Mercer

Chris Mercer

About Chris Mercer

Chris Mercer CA is the founder of Live Bookkeeping who previously headed up the business improvement team for the Ray White Real Estate Group. Chris is considered one of the industry leading financial experts and thought leader on financial matters in real estate. You can connect with him on or on LinkedIn.

EOFY Tip #3 – Review Your Agent Packages

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Real estate businesses are all about people, ultimately the quality of your people is your major point of difference in your market place.

As the end of financial year is the close off of your payroll calendar, it is a good time to look all of your packages.

If you strive to be an employer of choice in your market, how you handle your team’s career paths and remuneration is a very strong determining factor.

It is often daunting to drive these changes, and for many business owners saying nothing and dealing with it on a case by case basis is the rule, but leadership requires direction, and efficiency requires process.

Great businesses don’t fight fires all day, they take advantage of clear communication and mutual agreement between the owners and their staff, because it’s healthy for both parties to know where they stand. What better time than the start of a new financial year.

EOFY Tip #2 – Finalise Your Budget, Completely!

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Okay, it might sound silly to add the word ‘completely’ to this EOFY tip, we all need to have a budget, but what I am referring to is this, is the budget signed off?

Factors that you need to address when preparing a comprehensive budget include; have you looked at your business costs? Does your budget take into account growth in your existing business and the organic growth available through recruitment and increases in your number of managements?

Have you looked at your businesses available capacity as it sits today, or are you bursting at the seams? All of these known factors should be reviewed and given consideration as you finalise the budget for the next Financial Year.

Finally, once the budget has been finalised and agreed has it must be entered into your accounting software (e.g. MYOB, Quickbooks etc)? If not, make sure it does otherwise it will be forgotten?

The budgeting process is a wonderful exercise to facilitate a regular review from ‘Bottom up’ or ‘Top down’ of all people, events, agreements and investments you have in place in your business. It should play a regular role in the sound management overview for any business owner that wants to achieve success. An old management truism makes the point, “if you aim for nothing, you’ll achieve it with great regularity”. I hope you aim for a little more.

If you don’t know where to start, speak to your accountant or trusted advisor. Our team at Live Business Services is also more than happy to help.

Happy budgeting.

EOFY Tip #1 – Speak To Your Tax Accountant

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Have you spoken to your Tax Accountant? For so many small business owners a tax accountant could be called a “psychic”, they hope the accountant will have a symbiotic relationship with them, and know where their business is at before they (the business owner) do.

Wrong, obviously I hope you have a strong Tax Advisor, but they only can assist you based on your information. Questions they may ask you, to help them understand your circumstances, include;

  • Is your business profitable for the current financial year?
  • If so, higher or lower than last year?
  • What is the cash flow of the business looking like?
  • What is your superannuation plan?
  • Do you have any investments outside of your business? etc.

This event should happen between April and May ideally, or when you’re aware that the performance of your business has changed from the previous years, for better or worse. Sound tax advice is absolutely critical for every business owner, make sure you are prepared for your meetings and have an agenda for the points you want to cover. Your accountant will help to the best of their abilities, but only based on the information you have supplied them, they are professionals, not psychic’s.

5 Things To Kick Off The End Of The Financial Year

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It’s the end of financial year (EOFY) and for many of you the challenge of finishing the current year is enough of a task, let alone looking at the next financial year.

Over the next few weeks give yourself some time to undertake 5 simple tasks any business should conduct at this important time of year.

So what are the 5 simple ideas? These ideas relate to the financial management of your business, and while there are many more that could be completed, I believe all of the following actions should be addressed over the coming months, June, July and August.

  • Speak to your Tax Accountant
  • Finalise your financial budget completely
  • Address agent and staff packages
  • Initiate supplier reviews and cost control systems
  • Make changes to your financial accounts As I mentioned before, these can be all actioned after the 30 June, but ideally you should speak to your tax account before the EOFY.

I hope you can all action at least one or two of these initiatives over the coming months, and to help you, I will post 5 more detailed explanations of what each idea contains.

4 Things Your Real Estate Business Can Do To Protect Cash

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Spring is ending and summer is almost upon us, so what does this mean to Real Estate Business Owners? I’ll tell you what it means, 5 weeks left to determine how much money you will have in your bank account in March 13 is what.

Every year a sizeable percentage of business owners that don’t get this right suffer the hardship of cash flow shortages coming into Easter, and they don’t need to.

The silly thing is that even if you are having moderate or weaker finish to the year, you can have a big impact, to soften the blow, by planning ahead.

Here are 4 things you can do to manage your cash flow.

1. Have a good look at your settlements and when they are anticipated, in short make sure you know how much money you have coming in after xmas and when.

2. Depending on answer above, if it looks tight, get busy listing as early as possible on the other side of xmas, if you can’t impact your pre xmas selling opportunities. Act with intent and make sure your agents are focused on preparing for January, if you log off early, so will your team, don’t make that mistake. Get creative and put some ideas and pitches together for Vendors, that get them ready for January as well.

3. Don’t splash out on unnecessary items, protect your cash flow over the Xmas period. Remember you will have BAS payable in February and April, on top of quieter settlements because of the Late December early January period, you often have poor incoming cash flow just when the Tax is due.

4. If you think you may need to, get busy talking to your bank, because your spring period is often a good time to show your profitability, and arrange for some extra cash flow by discussing OD extensions, if you wait until March, it could look a lot worse. Be prepared.

I hope you have a great finish to the year, and I know that 2012 won’t be looked upon fondly, but the reality is looking ahead, maybe this 2012 are the market conditions that will be in place for the foreseeable future. Opportunities are there for the people facing reality and getting busy, the Victims are the businesses pining for the past. I hope you are getting busy.

Principal Interview: Steve Devine, Devine Real Estate

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Our series of principal interviews is about successful principles, independent or franchise, large or small to share their, philosophies, key insights and thoughts about running a successful real estate business and current market conditions and trends; enjoy!

Steve Devine, Devine Real Estate

Since the 1950’s, Devine Real Estate has had it’s roots in Sydney’s Inner West, a market leader, fiercely independent and proud to remain so, here are Steve’s thoughts on the current state of the real estate market.

Q. Chris Mercer (CM): Steve, what is your view of the market today?

A. Steve Devine (SD):

In 27 years I have never seen the market as difficult or tricky as today. In the past there were external factors that could clearly be pointed to for the difficulties of the market, for example the ’87 crash and government policy changes, ’98 Asian bank crisis and the 2008 GFC. The problem at the moment is that without an obvious catalyst for the uncertainty being felt by Vendors and Buyers, it is harder to plan ahead with confidence. The market conditions are unreliable and building momentum is more difficult .

Q. CM: What is the biggest challenge facing your business today?

A. SD: Redefining the business model based on the current conditions of uncertainty. While the nature of the sales agency and property management divisions have not changed the market environment has. Cashflow management is more important than ever. The business owner that takes their eye of their business will suffer. Cash is King in the business today.

Q. CM: What is the biggest opportunity for your business today?

A. SD: With all the trouble, the opportunities for consolidation or acquisition are out in the market. Where you see experience business operators discounting heavily, you know people are hurting and looking for cash flow. Therefore today there are more opportunities to gain efficiencies by merger or acquisition of business than there have been in recent times, especially where the business owner is lacking the confidence to turn the business around, or no longer has the spare capital or cash to do so.

Q. CM: Print advertising vs Internet advertising only. How do you see this issue in real estate sales businesses?

A. SD: Don’t get me started on this? I am a proud professional sales person and I have built up a strong business by successfully marketing property through a range of marketing avenues, and print advertising has been a important part of this. The internet is here to stay and is a great tool, but it is not and will never be the only means of marketing to bring buyers into the frame.

What has happen however, is the vendors have been scared into thinking that the Print Marketing only benefits the Agent and not their interests, the agents who or as I call them, “Saboteurs”, will make a point of conveniently saying to the vendors “look they send out all these Marketing Products to letterboxes and newspaper and 99% of people will throw them away, and any active buyer will go to the internet anyway, which is where I will place your property.” Of course the vendor wants to hear and believe this. What the vendor forgets is that 1% of 30,000 home is 300 interested parties and if 1 of them is coming forward to look to buy your property that wasn’t on the internet, then the marketing has worked properly and as a full service professional agency that rightly, leaves no opportunity to chance, our Agency over many years will get the best buyer in the market to consider your property.

These Saboteurs are quick win, short term thinkers and the internet is their playing field, and it has caused some agents to doubt the benefits of a layered approach to marketing a property. Well I can show from my office stats that the source of enquiries come from our marketing on a much higher percentage than internet only. I feel sorry for the vendors that don’t receive the opportunity to have the most buyers possible submitting offers on their property. The markets rule of supply and demand, is always true, the more demand the higher the price, full stop.

CM: Thanks Steve we really appreciate you sharing your thoughts with us today. And I hope everyone who reads them gains a little insight or clarity for their business.

Are All Bookkeepers The Same? Definitely Not!

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Bookkeepers are all the same – they make sure the numbers add up and the petty cash balances, right? Wrong.


Bookkeeping is a skill beyond being able to turn a calculator on – and real estate bookkeeping is more specialised again. The average real estate business owner is more than likely a great sales person, not an experienced bookkeeper. So it makes sense for them to spend their time driving new business and leave the accounting and reconciliation to business professionals.
 
 
Live Bookkeeping was born to provide a solution to this problem for Real Estate business owners across Australia. I have seen and heard almost every scenario, from the bare basics of bookkeeping to a highly qualified accountant on-site full-time. Like any business decision, your individual agencies needs must be met. It can seem costly to pay this “backoffice” task, when you are trying to build a business, but be wary of unwittingly walking into a disaster because you wished away responsibility for your accounts.
 
A qualified bookkeeper will tell you how to organize your financial accounts, and keep on top of BAS, Superannuation and PAYG requirements. They will reconcile your accounts and provide peace of mind.  But that is where bookkeeping ends, bookkeepers are not accountants.  
 
Preparing profit and losses, making changes to your chart of accounts, preparing budgets are not the mandate of bookkeepers. Running your trust account and settling property sales and property management accounts are also not bookkeeping skill sets. If you want these to be combined, you are looking for industry experience and expertise, and they are both scarce and costly.
Outsourcing is a sound option, and can provide solutions to all of the above tasks, and even better provide greater capacity for the same overall costs.
 
If you need to review how you currently operate your “back-office”, contact Live Bookkeeping to have a free assessment done, today.