Profit Problems for Top Teams

There are common problems that we see across all teams that often are internally invisible. You’d be amazed at what I see. Here are afew of those problems that may sound familiar:

Big Ego Brad

Big Ego Brad is always crushing it and killing it. It is someone who grows deals/GCI but not profits. Do you happen to know top agents who run growing teams of $500,000 plus in GCI? They focus on growing 50 to 100 percent per year, but the focus is solely on growing deals, sales volume, or GCI. They focus on revenue growth and they ignore net profit.

After a few years, without the clarity of basic profit models, they may have doubled their GCI, but they worked the same hours with more stress and bigger monthly expenses. Their net profit is sometimes the same as when they were half the size. Did you catch that?

We have seen many top teams that went from $500,000 in GCI to $1,000,000 in GCI. The problem is their business is actually worth less money but they do not know it. A lower percentage of business is coming from client marketing of repeat/referral business.

Brad is sometimes a Hyper Harry and loves to go to conferences and brag about the growing size of his business. In private, Brad will usually tell me the details of his true net profit situation. In real estate, people talk about how many deals they did, their sales volume, or GCI. People rarely talk about net profit.

My company, Best Agent Business, works closely with growing agents and top teams to increase their net profit with the Billion Dollar Agent Profit Model. Brad is always looking for more deals. He will spend thousands of dollars per month on buyer web leads, and hiring more buyers’ agents. He may not realize that based on his business model, he is actually making no profit on a buyer web lead deal. There are hundreds of teams in the country that are closing ten to 50 Buyer web lead deals per year. They do not realize they are making zero profit when you add up brokerage fees, marketing costs, ISA-caller costs, buyer’s agent splits, assistants, and general administrative costs.

Big Ego Brad loves to have the latest and greatest marketing stuff. Brad likes to find shiny new squirrels. He may switch from one database to another database because the new database looks cool. Hemay have a perfectly fine buyer web lead system, but decides to switch to a newer buyer web lead system. Every single time a database or marketing system is changed or abandoned, Brad is losing tens of thousands of dollars but he does not know it.

No Clue Carol

No Clue Carol does not have a clue about her financials and net profit. Once a year, she panics and throws a pile of statements and receipts at her accountant. Her business may be doing great, growing fast, and be over $1,000,000 in GCI, but she wonders if she should be making more than her current $150,000 net profit per year.

Vivid Vicki Vision

We want all of you to have a Vivid Vicki vision. Vicki has vivid clarity about her business and financials. She does monthly financials and achieves a Billion Dollar Agent profit margin of better than 50 percent. In fact, Vicki often makes more net profit than teams that did two times as much sales volume and GCI.

What is My Net Profit Goal?

Based on your business size, here are the Billion Dollar Agent Profit Model numbers. Low means you have a problem. Medium means that you are doing okay, but it could be higher. Target-High is your ultimate goal. This is for a team which is $500,000 or more in GCI.The numbers may be higher or lower based on the average sales price.

Low                     Medium             Target-High

Net Profit           20-30%               40%                     50%

If your net profit is 30 percent or lower, you should give me a call or reply to this blog tosee how we can help.

Like this blog? Do us a favor and “like” us on Facebook. Would you like help identifying ways you can improve your Net Profit or Time Management Strategies? Reply to this blog and we can get started. For more information on how Best Agent Business can help you streamline your marketing, time management and many other aspects of your Real Estate Business, subscribe to our videos, visit us at www.bestagentbusiness.com, call (202) 297-2393, or e-mail us at: sales@bestagentbusiness.com.

 

 

line

logo Best Agent Business

Part Time Virtual Assistants

Steve Kantor, President 

Schedule a call with Steve Kantor at

 http://www.bestagentbusiness.com/schedule-a-call.htm

 

Comment balloon 0 commentsSteve Kantor • August 07 2014 04:55AM
Profit Problems for Top Teams
share
There are common problems that we see across all teams that often are internally invisible. You’d be amazed at what I see. Here are afew of those problems that may sound familiar: Big Ego Brad Big Ego Brad is always crushing it… more
Zillow Lead vs. Open House Lead and Tom Ferry Summit
share
What is worth more, a Zillow or an Open House lead? How much are you spending per Zillow lead? One Open House lead is worth how many Zillow leads? Based on that, each Open House lead is worth how much? Reply to this blog and tell me. See… more
Increase Net Profits and an Easy Extra $50-$100K
share
Do you want to increase the net profit of your business? Of course you do. Do you want to do accounting and finances and monthly financials of income statements and budgets and balance sheets? Of course you likely CRINGE at the mention of… more
Analysis of a Top Brokerage
share
I’d like to continue on from my last blog and explain why it’s not crazy that the Billion Dollar Agent profit model is 50% net profit. Let’s analyze an independent brokerage which evolved from a top team to a good brokerage. The… more
The Billion Dollar Agent Model is 50% Net Profit
share
How much do you make in your business? How much should you be making? Do you know how much you are making? For simplicity, we will define your net profit as your salary equivalent. This is the amo unt of money you earn after expenses and… more
Keep in Touch and Get Some Door-Knockers
share
Do you ever use that evil phrase, “Past Clients” Never use that word. Call them Clients. I spoke to a Client who last worked with us in 2008. We had “kept in touch” over the years with monthly emails, periodic mailings, a hand-written note… more
Open House Analysis – Wildly Profitable
share
I’d like to continue talking about Open Houses this week since it’s such a big topic and everyone seems to have an opinion. Your first question right now is, ‘Does it make sense for me to do an Open House? ’ To decide, it would help to then… more
Open House Management Depends On Your Personality
share
Real estate, like most small businesses, makes it easy to become overwhelmed with the wide variety of marketing tactics and operational details needed to run the business and close a deal. The sooner you narrow marketing tactics to just a few… more
A Reminder of Why You Should Do Open House Marketing
share
I know I’ve written on this before and love them or hate them, Open Houses are a controversial topic in the community for sure. I’m strongly in the ‘love em’ camp and want to write more about why. Open house marketing is often an… more
Stop Buyer Agent Madness
share
Why would you expect that a Buyer's Agent is good at calling buyer web leads for 2-3 hours per day, showing homes to buyers, and doing closing management paperwork? Out of ten buyer's agents you have hired, how many have been really good at all… more