Production is a great metric to focus on. That’s where it all starts. But at the same time, if your profit isn’t up to par, there’s no point in increasing production.
To make sure you understand your production and get more insight into the source of the problem, you should track both main components of total production volume -- units sold and average sales price. You can then set goals for each of these metrics.
Now, once you’re tracking your production and you managed to get production up to a level you’re happy with, you’ll need to look at ways to increase profit.
Here’s three good places to start:
If your production seems fine, but you’re not seeing enough money coming out of the pipeline into your bank account, your first port of call has to be your commission check.
Firstly, make sure that every commission check is calculated correctly. You’d be astounded by the number of mistakes we see in commission checks. Most brokers and agents don’t really look at the commission check properly. As long as the number is in the right ballpark, they move on.
That could cost each agent hundreds of dollars a year. Now multiply this by the number of agents you have on your team and you get the picture.
Secondly, if your commission checks are correct, you may be low-balling when it comes to the actual percentage. You may need to review you commission strategy, looking through total GCI, commission percentage and the splits and caps that you’re generally negotiating.
Next to the commission, the problem may also just be in your team. Your profit can be affected if one or more members of your team aren’t performing up to par.
The solution here would be to review your team’s key performance metrics every day or every week. What is each team members’ production? How many calls are they making? How many viewings do they have? How long do their properties stay on the market?
It could be that your team’s performance is being dragged down by a specific member so it’s important to find out whether this is the case and provide extra support where needed.
Read more: How to keep real estate agents accountable
Lastly, no matter what you do, always control your costs.
There’s tons of ways to make your business more cost-effective, such as:
- Increasing the use of technology. More technology will help you automate things, do things quicker and make better decision.
Reduce debt: If you’re in debt, that’s a monthly profit sink. See if you can pay off debt more quickly.
Renegotiate your contracts: this can go from your internet plan, phone lines and of course -- the rent for your business premises.
Cancel subscriptions your don’t need or use
Review your marketing strategy. What’s the ROI you’re getting on your marketing? Can you cut marketing through channels that don’t bring in as much business?
Zipi will help you calculate the correct commission, keep a day-to-day overview of what’s happening in your team and will help you automate processes to keep costs down. Try Zipi now for 30 days for free -- no credit card required.