Category Archives: Profit Improvement

10 Actions Points for your Business to be the Big Fish in your Real Estate Market?

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Want to be the dominant business in your market and have a profit to show for it? Here’s a word of advice, don’t rely how today’s successful businesses got there, that can’t be replicated ever again, but if you have the ambition to match them, if not topple them, then adopt these action points and if you want it bad enough, there is nothing stopping you. 

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I am currently working on my book, and in preparation for its completion I was asked how I would run an agency if I was to do so. It got me to think about what I have learned from successful businesses I have analysed from the inside out, across all markets.

So here are the actions points you must complete if you are to become the market leading agency no matter where you are.

  1. Work hard! Your best competitors are. If you want to be the best business, you have to beat the best business.
  2. Focus on innovative ways to get an edge, but on the important factors first. Which ones you might ask? no surprise here: “LISTINGS , LISTINGS, LISTINGS” or “PRODUCTIVE AGENTS, PRODUCTIVE AGENTS…..!“
  3. You can’t become invincible in your first year, but you can become insolvent. Keep cash flow flowing.
  4. You can always pay your best agents more, if they do more.
  5. If a good business in your market comes up for sale, buy it, but do your homework
  6. Property Management is small in cash flow, but big in value. It’s not a complaint line, it’s a golden egg.
  7. Profit is the goal, not income. Business is about spending a $1.00 to make $1.16, not 85c. Income is great, but margin is what you keep.
  8. Measure everything and review it. Learn from your successes and failures.
  9. Don’t limit your potential, but minimise your risks. Always know when to stop a bad decision and don’t apologise.
  10. Listen to experts, not naysayers. If you have good people, your business will fly and remember to look after them.

If you are thinking about getting into agency business and want to know how it all works, speak to people you either trust or who you know have had success in real estate business. It makes it so much easier when you get things right from the start, rather than the all to familiar “learning the hard way” mentality.

We are always available to help any agent who wants to get their books in order and their business plan finished, just contact us at info@live-bookkeeping.com.au . The rest is all about hard work and results.

Happy listing and selling,

Chris

How do you increase profit when everyone is ‘Discounting’?

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When Gerry Harvey was answering a question during the toughest moments of the retail ‘recession’, if Sales had become a permanent feature of all retail outlets. He answered, and I paraphrase:

“The secret to successful retailing is not just discounting, anyone can do that, but getting the customers into your store with discounted products and selling them the benefits of the better products with higher margins in store.”

So how does this apply to today’s property sales market?

Property is all the rage in the media, headline grabbing results in Sydney, are setting the tone for the country, but not everyone is enjoying the stronger selling conditions of Sydney, why?

Two Factors: 1) Low numbers of Stock, and 2) Discounting in the market by agents trying to get a listing.

Inexperienced operators, or the more tired operators are justifying their discounting because properties are selling quickly and not requiring a lot of time. Their thinking is “I’ll do it for 1.5%+GST because it will still be $10,000.”

Smart agents realised, that by showing the vendors they were willing to meet the market for an average result, they could ask for an incentive or “kicker” if a better than expected result was achieved. So rather than “just discounting” their fee to 1.5% +GST they pick a price point and ask for a higher%. The vendors are happy to agree to it, because they know they will have achieved their minimum expectations, and the rest is upside.

This is what Gerry Harvey was referring to when he pointed out the difference in retailers, providing a service to the customer, rather than flogging old stock at a discount.

I could mention a number of my customers that have enjoyed great commissions for great sales results, where everyone was happy with the outcomes. In fact, they have increased their average % commission fee as a result, even though they agree to “discount” and get the business. That’s smart business operating. The Live Bookkeeping Way.