Time to Break Out the Management Plan
2:21 Minute Read.
Labor Day weekend is over. Summertime has unofficially ended. It’s time for agents to shift gears during the remaining months of the year.
On Sept 3rd, Ruthie and I observed our 34th wedding anniversary. We celebrated by sailing Lake Michigan all weekend. We retired our old boat, Puff in the springtime and purchased a Catalina 30. It’s more room to stretch out in and very beamy which makes for a sturdy sail. We’ve not named her yet, so if you have any ideas, feel free to offer your opinion.
Back on land, we started clearing the vegetable patch, closing the pool and winding up garden hoses. Every fall there is work to be done. In the same way, there is a rhythm in the work real estate agents perform.
“Your bag of income may have
several leaks that you aren’t aware of.”
In the springtime, real estate agents focus on their Marketing Plan. Its all about creating income. Set goals for daily contacts, weekly appointments, monthly closings and annual income.
In the fall, effective agents give attention to their Management Plan. As the saying goes, “It’s not how much you make, but rather how much you keep that matters.” Well said. A management plan analyzes expenses, opportunities and risks factors. Its about plugging the leaks in your bag of income. Here are a few categories to consider:
Taxes. It’s amazing how many agents are surprised by the amount of taxes they owe on April 15th. I’ve watched too many agents freak out because they were not prepared for a large tax bill. Now is the time to make sure you’re on track for state and federal income taxes. It may be contrary to “good” financial planning, but we’ve always overpaid on taxes and used those big returns to pay off our mortgage or buy new vehicles. It worked for us and it can work for you too.
Mileage & office expenses. And speaking of taxes, I’m convinced the gov’t counts on you to never think like an accountant. Prove them wrong. Get out your pocket protector, sharpen your pencils and start looking for every deductible business expense. Collect every receipt and know your numbers. Paying taxes on items you could otherwise deduct is the true definition of “stupid tax.”
Cash flow. Some agents make a ton of money and still seem flat broke. In a world where making $10k one week and nothing the next two is the norm, budgeting cash flow is extremely important.
Right-size your business. It doesn’t matter if you’re a large, state-wide team of agents or a one-woman show operating out of a corner in her living room, make sure the services you use fit the needs of your business. Its easy to let telephone services, advertising and marketing systems get out of hand. Review your contracts before renewal time and decide what’s best for you.
Plan future purchases. We replace vehicles, computers, yard signs and plenty of office equipment about every 4 years. Don’t wait until things break down. Budget for them and keep your business running smoothly.
Review your brokerage. Not every brokerage fits every agent perfectly all the time – not even ours. Take the time to decide what your needs are and whether your current brokerage meets them. Need less rules or less cost? Need more training or more contacts? Most agents never think about their brokerage relationship until they are knee-deep into next years marketing plan – and then its too late. Take the time now to decide if it’s the right fit for you.
Plan your future. We’ll all retire someday. Set aside earnings for the future you. Invest in real estate or a good retirement plan. Make an exit plan along with your current operating strategy.
Invest in mental health. Good management isn’t only about money. Ever call an agent to schedule a showing and hear her break down in tears because of all the stress in her life? I have. This business can be emotionally draining. Manage your time (and time off) as well as your money. You’re human. Being available 24/7/365 is for the birds. Work to live. Don’t live to work.
Evaluate. One last function of your management plan is to honestly evaluate the results of your marketing plan. Did you meet your goals? What efforts were successful? What areas in your plan need more support when you develop next years plan?
Well, there’s nine categories to consider when managing your business. How are you doing with them? Just remember, you’re more than a real estate agent. You are a self-employed business person. It’s time to think like one.