Thursday, April 26, 2007
Self Analysis Questionnaire
I put this self analysis questionnaire together to allow you to review your real estate operation and determine for yourself whether or not adjustments are needed. Just click on this link and print it www.profitpowersystem.com/download/questionnaire.pdf.
Tuesday, April 24, 2007
Older Technology Is Costing You More Than You Think
In changing times, especially when the market slows down, it is always easy to just stay the course, don't change anything and wait for better times ahead. However staying the course could be costing you more than you think. Sure, spending moneyin tight times can be a difficult decision but are you really ahead of the game. Is it possible that existing systems are actually costing more than replacing them?
Number 1 – Remove older technology that does not provide the ‘return’ your firm demands
Maintaining older technology is often a costly proposition. Work-a-rounds to fix deficient technology solutions are fraught with human error, wasted time, redundant activities and expensive maintenance costs. Many times the older technology forces your organization to maintain older hardware. Older hardware that requires ‘rare’ parts and service can greatly increase your costs of maintaining that antiquated solution.
Modern solutions take advantage of the latest technology breakthroughs. Today’s hardware costs are low and maintaining the latest systems is far less demanding than decade old solutions. All of this leads to lower costs and more profit staying in the company.
Finding a solution that is a fully integrated and offers the ‘next generation’ of technology can have a huge positive impact on your real estate firm. Now is a great time to evaluate existing systems, and if appropriate implement the right tool for the job and reap the ‘return’ you expect on all of your investments.
Sure, “the times are a changing” and smart businesses know that they must change with the times to stay competitive and continue to grow and prosper in any market condition. You will discover what many other sophisticated business have already discovered, that is that the old ways usual cost more in the long run than the investment required to update to more profitable methods.
As the summary chart below illustrates (using the ten strategies posted over the past few months), it would take almost 1400 additional transaction sides to be generated to earn an additional $140,000.00 in PROFIT (if we assume a $100.00 per side profit as per the NAR published estimates). These examples are based on a single office with just 25 agents. Even if you divide the results in half, or a quarter the benefits are still fantastic. Play with the assumptions on your own, but no matter how you slice it, newer technology that can modify business operations is a smart investment that has real measurable returns for your technology investment.
So waiting for better times to make a change to newer technology could be costing your firm a lot more than you think.
Number 1 – Remove older technology that does not provide the ‘return’ your firm demands
Maintaining older technology is often a costly proposition. Work-a-rounds to fix deficient technology solutions are fraught with human error, wasted time, redundant activities and expensive maintenance costs. Many times the older technology forces your organization to maintain older hardware. Older hardware that requires ‘rare’ parts and service can greatly increase your costs of maintaining that antiquated solution.
Modern solutions take advantage of the latest technology breakthroughs. Today’s hardware costs are low and maintaining the latest systems is far less demanding than decade old solutions. All of this leads to lower costs and more profit staying in the company.
Finding a solution that is a fully integrated and offers the ‘next generation’ of technology can have a huge positive impact on your real estate firm. Now is a great time to evaluate existing systems, and if appropriate implement the right tool for the job and reap the ‘return’ you expect on all of your investments.
Sure, “the times are a changing” and smart businesses know that they must change with the times to stay competitive and continue to grow and prosper in any market condition. You will discover what many other sophisticated business have already discovered, that is that the old ways usual cost more in the long run than the investment required to update to more profitable methods.
As the summary chart below illustrates (using the ten strategies posted over the past few months), it would take almost 1400 additional transaction sides to be generated to earn an additional $140,000.00 in PROFIT (if we assume a $100.00 per side profit as per the NAR published estimates). These examples are based on a single office with just 25 agents. Even if you divide the results in half, or a quarter the benefits are still fantastic. Play with the assumptions on your own, but no matter how you slice it, newer technology that can modify business operations is a smart investment that has real measurable returns for your technology investment.
So waiting for better times to make a change to newer technology could be costing your firm a lot more than you think.
Saturday, April 14, 2007
Lower Costs and Keep Your Agents Happy
Sales associates are independent contractors that need a host of reports for their own record keeping. Keeping track of their own activity is often left to the 'end' when tax time arrives. As the broker owner you must keep a complete and accurate account of all transactions. This process has a cost! Why not solve you sales associates record keeping challenges and lower your cost of administration at the same time.
Number 2 – Increase revenues by improving sales associate services
Sales associates are independent contractors that need 24/7 access to their data. Technology can improve sales associate services and provide revenue making opportunities.
Solutions that offer an on-line access for your sales associate not only provides your associates with all of their data (right up-to-the-second) but if your company decides to, can increase profits.
Providing accounting and client management solutions for your agents is a snap with the latest technology solutions available today. Your firm already enters all of the data for each and every transaction. Your administrative staff must record the listing, the seller, the buyer, commissions earned and paid, deductions, dates and so much more.
To each and every sales associate in your company this data is vital, even if only at the end of each taxation year. Entering and managing this data has a cost. Why not consider charging a nominal fee to pay for work that your firm has no choice in doing and provide a real service that your sales associates can find immediate benefit from.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
$10.00 per agent per month service fee ($120.00 per year)
$3,000.00 additional annual revenue
Using NAR $100.00 average profit per side the $3,000.00 would be like adding 30 more sides to your transaction total for this branch office
Number 2 – Increase revenues by improving sales associate services
Sales associates are independent contractors that need 24/7 access to their data. Technology can improve sales associate services and provide revenue making opportunities.
Solutions that offer an on-line access for your sales associate not only provides your associates with all of their data (right up-to-the-second) but if your company decides to, can increase profits.
Providing accounting and client management solutions for your agents is a snap with the latest technology solutions available today. Your firm already enters all of the data for each and every transaction. Your administrative staff must record the listing, the seller, the buyer, commissions earned and paid, deductions, dates and so much more.
To each and every sales associate in your company this data is vital, even if only at the end of each taxation year. Entering and managing this data has a cost. Why not consider charging a nominal fee to pay for work that your firm has no choice in doing and provide a real service that your sales associates can find immediate benefit from.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
$10.00 per agent per month service fee ($120.00 per year)
$3,000.00 additional annual revenue
Using NAR $100.00 average profit per side the $3,000.00 would be like adding 30 more sides to your transaction total for this branch office
Saturday, April 7, 2007
Changing Compensation Plans
When it comes to changing compensation plans for sales associates, it is all too often that the broker owner or his branch managers will think that this is a 'kiss of death' leading to a mass exit of their sales force. Although care and planning is the only way to make changes to your compensation plans, it is also something that senior management should review on a regular basis to stay in step with the ever changing market.
Number 3 – Fine tune sales associate compensation plans to make profitability a reality
Even small adjustments to your associate compensation plans can have a positive bottom-line result. Older systems are usually ridged and incapable of tweaking. Newer technology on the other hand is so flexible that even the slightest adjustment is quick and easy with potential upside results.
Compensation plans are not just about commission rates. Off-the-top and off-the-bottom deductions can play an important role in a compensation plan. Accounts receivable balances can have interest and late charges applied. Rolling back compensation plans to reflect a previous year of activity is another great way to make minor adjustments to reflect actual production and reward. Modern solutions fully automates this process to eliminate administrative effort and reduce human error.
Full service brokerage operations are often in a fight with ‘discount’ brokers and your sales associates are the foot soldiers in this war. When one of your sales associates discounts a sales commission, they are not just giving up a part of their commission, but a part of the company’s too! It usually means the company actually lost money on the deal. State-of-the-art technology can provide an automated solution that would see more of the ‘discount’ come from the agent’s portion of the transaction and ensure the company’s profitability on the sale was maintained.
Profit opportunities are everywhere when the right technology is properly used and making small adjustments to your compensation plans is quick and easy when you have the right tool in hand.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
25 transactions per month (300 sides per year)
$200,000.00 sale price
3% gross commission per side ($1,800,000.00)
2.5% recovery on gross commission income ($45,000.00)
Using NAR $100.00 average profit per side the $45,000.00 would be like adding 450 more sides to your transaction total for this branch office
Number 3 – Fine tune sales associate compensation plans to make profitability a reality
Even small adjustments to your associate compensation plans can have a positive bottom-line result. Older systems are usually ridged and incapable of tweaking. Newer technology on the other hand is so flexible that even the slightest adjustment is quick and easy with potential upside results.
Compensation plans are not just about commission rates. Off-the-top and off-the-bottom deductions can play an important role in a compensation plan. Accounts receivable balances can have interest and late charges applied. Rolling back compensation plans to reflect a previous year of activity is another great way to make minor adjustments to reflect actual production and reward. Modern solutions fully automates this process to eliminate administrative effort and reduce human error.
Full service brokerage operations are often in a fight with ‘discount’ brokers and your sales associates are the foot soldiers in this war. When one of your sales associates discounts a sales commission, they are not just giving up a part of their commission, but a part of the company’s too! It usually means the company actually lost money on the deal. State-of-the-art technology can provide an automated solution that would see more of the ‘discount’ come from the agent’s portion of the transaction and ensure the company’s profitability on the sale was maintained.
Profit opportunities are everywhere when the right technology is properly used and making small adjustments to your compensation plans is quick and easy when you have the right tool in hand.
Assumptions (multiply by your actual numbers):
1 branch office
25 agents
25 transactions per month (300 sides per year)
$200,000.00 sale price
3% gross commission per side ($1,800,000.00)
2.5% recovery on gross commission income ($45,000.00)
Using NAR $100.00 average profit per side the $45,000.00 would be like adding 450 more sides to your transaction total for this branch office
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