Category Archives: Control costs

Staff Numbers And Ratios What Works Best For Agencies
Control costs

Staff numbers and ratios: what works best for agencies?

One of the most important decisions you’ll make as a principal is the size of your team. For every team member, there needs to be enough income generated to cover their role.

Employ too few, and your team will burn out and work ineffectively. Employ too many without the revenue to support them and you’re not going to stay afloat financially.

My wife and I met with some of our members in Melbourne recently, and we were surprised to discover that there are almost as many styles of running an agency as there are principals running them.

We talked to one principal with a team of 12 staff who holds a meeting every Monday at 8am sharp where they hash out the week’s work and targets. Another principal, with a similarly sized team, said his staff were self-starters who were off doing their own thing most of the time, only calling in when they needed support.

But however your business runs, you need enough income-producing staff to cover operational costs, including the salaries of your administrative team. The numbers I give below are observations, not recommendations, as each principal will know what works best for their unique set-up, but they will give you some ideas for structuring your team.

Reducing Operating Costs In Your Real Estate Agency
Control costs

Reducing operating costs in your real estate agency

When you’re looking to improve the cash flow at your agency, you have two main options: increase the money coming in or decrease the money going out. However, while we might believe that we can generate more income, in reality, the market decides. The only aspect that is truly under your control is your expenses.

For many modern real estate outfits, especially those with a franchise agreement and a physical space, there are plenty of opportunities to reduce agency operating costs while still delivering the same great service to your clients.

Before you start work on reducing your costs, it pays to know exactly what you’re spending ‒ and where. Setting up a spreadsheet with all your annual outgoings (as some payments will be one-off while others may be weekly or monthly) will show you what your expenses are.

From that list, you can see at a glance what the largest outgoings are and what can be trimmed. It could be that some of the most expensive items are the most valuable and least likely to be pruned. However, when you take the time to examine all your outgoings carefully, you might find that you can make cutbacks in the most surprising areas without compromising your level of service or your productivity.

6 Steps To Managing Real Estate Cash Flow
Control costs

Money business: 6 steps to managing real estate cash flow

Cash ebbs and flows are inevitable in the real estate industry, but many of us struggle to manage these highs and lows as well as we could. So what are some strategies to put in place that will lead to better money management in your agency?  

1. Setting a budget

Putting a budget in place is crucial to ride out the ups and downs of real estate. It allows you to plan how you will keep things running when cash is tight, and will also provide some great insights into where your money is actually going ‒ so you can press pause on unnecessary outgoings if needed.

Setting up a proper financial tracking system will give you an overall view of your current cash flow at any one time, meaning you can make better, more informed business decisions.

2. Know your agency’s break-even point for better financial goals

If you don’t know what income is required to keep your agency running for a profit, then it’s time to get serious. Because once you can see what income needs to be achieved for day-to-day costs, you’ll gain greater insight into how your business is actually performing. Is it running at a loss? Or will it in six months’ time if you continue the way you are?

Some business owners may prefer to keep their ‘head in the sand’ when it comes to this type of information, but it’s about taking back the power. Understanding this figure is crucial, not just to keep your business afloat, but to also set better growth and financial goals. If you know what you want to achieve, you can work out how long it will take you to get there.

3. Save everything above your target

Many real estate agencies tend to fall into the trap of spending money when they have it, without much thought to the future. But this is dangerous territory.

It is important to set a realistic budget, stick to it, and save any surplus. This is because we can often lose sight of those ‘lulls’ when everything is going well. But it actually makes better financial sense to keep it set aside for quieter periods. Not only does it help you to cover your financial obligations, it also means you can reinvest back into the business.

During downturns, a lot of agencies close ranks ‒ reducing any marketing spending, promotions or advertising. But this is usually the time these aspects are needed most, in order to keep our business in the spotlight, and gain the confidence of potential clients.

Do You Really Need A Real Estate Office Blog
Control costs

Do you really need a real estate office?

The modern world is changing and the real estate industry is evolving along with it. Properties are listed and shared online, and automation has made keeping in touch with clients easier than ever.

As most people now search for property online first, not to mention doing more of their shopping via the internet, they’re less likely to be strolling past their local real estate agent’s office. This is especially the case in metro areas.

What’s more, busy clients have different expectations and will be happier if you can meet them at their home or close to their office, rather than taking the time to come to you.

Changes to the way real estate agents interact with their clients raises the question: do you really need a real estate office? If the thought of giving up your bricks and mortar presence is one you’d like to explore, take a look at the pros and cons.