If there is one thing I hear over and over again is that too many real estate broker owners are NOT running their businesses as a 'business'. What does that really mean?
From what I can tell, too many broker owners entered the world of brokerage with a track record of sales success, not necessarily business success. The skills and talents to sell real estate are considerably different from those required to run a real estate brokerage company. One of the best new skills a broker owner can acquire is the skill of analyzing everything!
Number 4 – Analyze everything – Business Intelligence Reports (BI) can shed light on new opportunities and highlight areas for improvement
Study your own data to obtain a better understanding of what is really happening in your real estate operation. Knowledge is power. Analyzing your ‘up-to-the-second’ data is a proven weapon in your arsenal of tools. Older technology is rarely flexible or accessible. Reports are ‘cast-in-stone’ and often reflect a requirement that has changed over the years.
Newer ‘open’ technology that utilizes ‘state-of-the-art’ Microsoft SQL database solutions that provide unlimited options for dissecting data in just about any manner you can think of.
Want to know the percentage of your listings your competitors have sold (and how it relates to your profitability)? How about a list of outside broker sales associates who have sold your listings (with the ability to thank them for their assistance)? Or perhaps what has each listing is really costing your firm, regardless of whether it sold or not (and who is spending the money)?
New technology that provides an ERP solution is a great approach to increasing effectiveness, providing better standards and improving awareness at a higher level. Whenever the term "ERP" (enterprise resource planning) is talked about today, it usually means how resources are to be expended rather than in the context of planning. It refers to high level enterprise view of the entire business. Or put another way, an overview of a company and all its parts as connected whole, rather than small centers of activity.
· ERP relates to the software infrastructure that holds the entire company together internally, on the one hand, and supports the external business processes the company engages in, on the other.
· ERP applications address a business process.
· ERP applications are modular.
· ERP applications are integrated.
· ERP applications include a company's reach beyond its walls—to its suppliers, customers, and partners.
· The entire ERP suite will address all areas (or the great majority) of a company's business functions.
Take hold of your data like never before and discover hidden treasures that can increase your bottom line or the mine fields that could be costing precious profits.
Friday, March 30, 2007
Thursday, March 22, 2007
Save Money and Ensure Your Best Staff Stays
It's really tough to reduce staff, especially those that have proven themselves to you and your organization. One way to ensure you keep the people you rely on is to let go of the ones that are not. Technology is a proven strategy for replacing tedious and mundane jobs (often performed by your less than stellar staff members) and using that new found profitability to ensure your valued staff members stay with you for years to come.
Number 5 – Reduce costs by increasing administrative productivity
Remove redundant and repetitive tasks from your administrative operations and streamline your administrative team. Automation is a proven method for reducing administrative costs. Older technology rarely has the new features that can really make a huge impact on day to day operations.
For example, direct pay deposit is a fantastic way to reduce bank processing fees, lower processing costs (administrative salaries, check stock and printer supplies) and provide your sales associates with ‘real-time’ payment. This one simple but powerful feature can save your firm thousands of dollars per year.
Another example is automated bank reconciliations. Manually reconciling bank activity is a long and tedious process that requires a highly paid administrator to perform. Most of the major banks can provide a data file that lists all of your company’s check activity (deposits too). Today’s newer technology can import the bank’s data file and can produce a reconciled report in minutes.
Work-a-round processes are inherent with older technology solutions. They are rarely in ‘sync’ with the main system and often create expensive administrative chores maintaining multiple solutions. Multiple non-integrated work-a-round solutions are usually the cause of costly errors. For example, Associate Accounts Receivables require close monitoring and when possible, immediate repayment. Using a non-integrated solution for agent receivables can be a nightmare for administrators and very expensive for the company.
A fully integrated solution that completely eliminates redundant data re-entry and ensures all data is always in ‘sync’ with every other piece of data in the solution. Listings, sellers, sales contracts, buyers, sales associates, escrow deposits, commissions, referrals, agent receivables, general ledger entries, checks, deposits and more are linked in a chain-like relationship that binds your business data into a cohesive business solution.
Assumptions (multiply by your actual numbers):
0.5 full time administrative position retired
$15,000.00 annual cost saved
Using NAR $100.00 average profit per side the $15,000.00 would be like adding 150 more sides to your transaction total for your company
Number 5 – Reduce costs by increasing administrative productivity
Remove redundant and repetitive tasks from your administrative operations and streamline your administrative team. Automation is a proven method for reducing administrative costs. Older technology rarely has the new features that can really make a huge impact on day to day operations.
For example, direct pay deposit is a fantastic way to reduce bank processing fees, lower processing costs (administrative salaries, check stock and printer supplies) and provide your sales associates with ‘real-time’ payment. This one simple but powerful feature can save your firm thousands of dollars per year.
Another example is automated bank reconciliations. Manually reconciling bank activity is a long and tedious process that requires a highly paid administrator to perform. Most of the major banks can provide a data file that lists all of your company’s check activity (deposits too). Today’s newer technology can import the bank’s data file and can produce a reconciled report in minutes.
Work-a-round processes are inherent with older technology solutions. They are rarely in ‘sync’ with the main system and often create expensive administrative chores maintaining multiple solutions. Multiple non-integrated work-a-round solutions are usually the cause of costly errors. For example, Associate Accounts Receivables require close monitoring and when possible, immediate repayment. Using a non-integrated solution for agent receivables can be a nightmare for administrators and very expensive for the company.
A fully integrated solution that completely eliminates redundant data re-entry and ensures all data is always in ‘sync’ with every other piece of data in the solution. Listings, sellers, sales contracts, buyers, sales associates, escrow deposits, commissions, referrals, agent receivables, general ledger entries, checks, deposits and more are linked in a chain-like relationship that binds your business data into a cohesive business solution.
Assumptions (multiply by your actual numbers):
0.5 full time administrative position retired
$15,000.00 annual cost saved
Using NAR $100.00 average profit per side the $15,000.00 would be like adding 150 more sides to your transaction total for your company
Monday, March 5, 2007
The Small Stuff Can Add Up
When profits are soaring it's easy to let the small stuff slide. But hey, times are different and profitability at all levels is more money for your your organization. Here is just one example of how technology can help recover those hidden expenses that eat away at your bottom line.
Number 6 – Save time, money and effort on report distribution
Reports are a fact of life in all businesses. They are an important ‘tool’ at all levels of management to track, manage and analyze the firm’s activities. Compiling, printing and distributing the various reports can be an expensive administrative cost to your real estate company with no real return on the investment.
Newer technology can auto-email reports rather than printing them and will greatly reduce the effort and cost when compared to printing. A few simple clicks can complete the process and provide ‘real-time’ reporting with ‘up-to-minute’ data for all levels of management. When the cost of printing is removed, reports can be distributed more often or whenever the need arises.
On-line reporting is another reporting ‘tool’ that provides secure access to operational data whenever the need arises. Technology can greatly increase availability and reduce expensive costs related to this vital aspect of your firm. Saving money is like earning more. It just makes good sense.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
4 reports – 25 pages each per month
$50.00 cost per report (paper, ink, printer maintenance, administrative staff, distribution, etc.)
$200.00 per month savings ($2,400.00 per year)
Using NAR $100.00 average profit per side the $2,400.00 would be like adding 24 more sides to your transaction total for this branch office
Number 6 – Save time, money and effort on report distribution
Reports are a fact of life in all businesses. They are an important ‘tool’ at all levels of management to track, manage and analyze the firm’s activities. Compiling, printing and distributing the various reports can be an expensive administrative cost to your real estate company with no real return on the investment.
Newer technology can auto-email reports rather than printing them and will greatly reduce the effort and cost when compared to printing. A few simple clicks can complete the process and provide ‘real-time’ reporting with ‘up-to-minute’ data for all levels of management. When the cost of printing is removed, reports can be distributed more often or whenever the need arises.
On-line reporting is another reporting ‘tool’ that provides secure access to operational data whenever the need arises. Technology can greatly increase availability and reduce expensive costs related to this vital aspect of your firm. Saving money is like earning more. It just makes good sense.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
4 reports – 25 pages each per month
$50.00 cost per report (paper, ink, printer maintenance, administrative staff, distribution, etc.)
$200.00 per month savings ($2,400.00 per year)
Using NAR $100.00 average profit per side the $2,400.00 would be like adding 24 more sides to your transaction total for this branch office
Friday, March 2, 2007
Protect your investment when it comes to leads
This one is a no-brainer. You spend thousands on your web site, collecting leads and even scrubbing them for your agents. Make sure you get your just rewards at the end of the day!
Number 7 – Ensure your relocation and web leads provide the return you expect
The real estate world is a connected place where leads come from multiple sources. In many cases, these leads require your organization to spend money to enroll in one or more relocation networks or implement sophisticated web sites to attract potential buyers and sellers.
Web based ‘methods’ are a relatively new phenomenon in the real estate world and many real estate organizations have not yet created the infrastructure to ensure their investments are providing the return they expect.
Leads are like irons in a fire. Some provide immediate results making them easy to track. A majority of the leads require a long-term relationship that can take months to mature into a sales transaction. If your firm does not have a integrated technology solution, the longer it takes to convert a lead into a sale, the more likely it is that your real estate organization will not be paid for the ‘lead’ your firm generated in the first place.
A non-integrated technology solution often see real estate firms spending extra resources manually matching leads to transactions (which is costing the firm even more money) and through human error, missing deals where a ‘lead’ matured and the company did not get paid for it.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
$200,000.00 average sale price
3% gross commission rate per side
25% off-the-top referral fee ($1,500.00)
1 referral fee not paid to company per month
Result - $18,000.00 annual lost
Using NAR $100.00 average profit per side the $18,000.00 would be like adding 180 more sides to your transaction total for this branch office
With leading edge technology leads are recorded, tracked, monitored and when the lead turns into a sale an auto-link feature automates the process of linking the lead to the sale and ensuring that the company is paid on closing regardless of when the initial lead was distributed to your sales associate.
Even if 1% of your leads are not providing the revenues your firm deserves the result is considerable lower profits. Implementing newer technology can provide the assurance that all revenue opportunities from leads are being received.
Number 7 – Ensure your relocation and web leads provide the return you expect
The real estate world is a connected place where leads come from multiple sources. In many cases, these leads require your organization to spend money to enroll in one or more relocation networks or implement sophisticated web sites to attract potential buyers and sellers.
Web based ‘methods’ are a relatively new phenomenon in the real estate world and many real estate organizations have not yet created the infrastructure to ensure their investments are providing the return they expect.
Leads are like irons in a fire. Some provide immediate results making them easy to track. A majority of the leads require a long-term relationship that can take months to mature into a sales transaction. If your firm does not have a integrated technology solution, the longer it takes to convert a lead into a sale, the more likely it is that your real estate organization will not be paid for the ‘lead’ your firm generated in the first place.
A non-integrated technology solution often see real estate firms spending extra resources manually matching leads to transactions (which is costing the firm even more money) and through human error, missing deals where a ‘lead’ matured and the company did not get paid for it.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
$200,000.00 average sale price
3% gross commission rate per side
25% off-the-top referral fee ($1,500.00)
1 referral fee not paid to company per month
Result - $18,000.00 annual lost
Using NAR $100.00 average profit per side the $18,000.00 would be like adding 180 more sides to your transaction total for this branch office
With leading edge technology leads are recorded, tracked, monitored and when the lead turns into a sale an auto-link feature automates the process of linking the lead to the sale and ensuring that the company is paid on closing regardless of when the initial lead was distributed to your sales associate.
Even if 1% of your leads are not providing the revenues your firm deserves the result is considerable lower profits. Implementing newer technology can provide the assurance that all revenue opportunities from leads are being received.
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