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, call (202) 297-2393, or e-mail us at:




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Comment balloon 0 commentsSteve Kantor • August 07 2014 04:55AM
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