Remargin Your Business Expense Management Remargin Your Business

MAIN IDEAS Course Page 5

Main Ideas Perspective on Expense Management Measure Your Market Size Your Business Cut the Fat Make the Most of What You Have The Bottom Line My Action Plan Course Page 5

PERSPECTIVE ON EXPENSE MANAGEMENT Course Page 7

Perspective on Expense Management Protect Your Margin - When the market shifts, your margin becomes your biggest issue. - Protecting your margin = saving your business. - It’s time to cut back on expenses. “Unless it is nailed down—it goes.” Gary Keller Course Page 7

Perspective on Expense Management Who Will Be Affected? Can I really thrive in a down market? No… and YES! In the short term, everyone in an affected market will feel the downturn equally. But by cutting expenses fast, anyone can thrive in the long term. Course Page 9

Perspective on Expense Management Get Your Money in Shape Phenomenal opportunities exist, but you need to be fighting fit if you want to take advantage of them. Follow these steps . . . 1. Measure your market 2. Size your business 3. Cut the fat 4. Make the most of what you have Course Page 10

Getting the Most Out of This Experience The Prisoner Has to be there, doesn’t want to be there, and doesn’t know why they’re there. The Vacationer A day in training is Better than a day on the job. The Explorer Excited and curious about the new knowledge, skills, and tools they will discover in class. Doesn’t engage Spends as much time chatting as listening Listens attentively, then participates fully in discussions and exercises Spends class time catching up on their emails There to have fun—distracts the class with irrelevant comments Asks meaningful questions and contributes compelling aha’s Escapes by spending time in the hall on their phone Returns late from break and lunch Arrives to class on time and returns promptly from breaks Holds on to limiting beliefs Not purposeful in their learning goals Adopts a posture of acceptance Multi-tasks on their computer by working on side projects OMG! Spends the day on their smartphone, texting and checking Facebook Takes notes in their manual for future reference Picks fights with trainer or other participants if they don’t agree Isn’t paying attention Respects the different learning styles and opinions of others Hopefully, you picked “The Explorer!” Course Page 11

MEASURE YOUR MARKET Course Page 12

Measure Your Market Follow the Pendulum Swing More inventory Increased days on market Fewer pendings A smaller board Lower production and/or volume Fewer leads Monitor these six market indicators carefully—if they are shifting, start making timely cuts in your expenses. Course Page 12

Measure Your Market Watch Your Pipeline Track your income for the next sixty days. Calculate how many closings you have and your projected income from those closings. “A lot of people don’t keep their eye on the ball until they go to the bank and realize their checking account is empty, so they better get to work. But I constantly watch what is 30 or 60 days ahead of me for closed income.” Martin Bouma Ann Arbor, Michigan Course Page 13

Measure Your Market Watch Your Pipeline How many closings are in the pipeline for the next two months? What is your projected income from your closed transactions? What will be your average monthly income based on your sixty-day projection? Course Page 13-14

Measure Your Market Size Your Business It is time to take a cold, hard look at your financial situation. Once you have a clear picture of your financial situation, it will be easier to see what adjustments should be made. Look at two broad categories—your personal expenses and your business. Course Page 15

Measure Your Market Size Your Business Your Personal Expenses Your lifestyle may need some adjustments—it’s not the time for extensive vacations, redecorating your home, or buying a new car. Categorize all your personal expenses so you know exactly where your money is going. Adjust your lifestyle costs to just below your projected income. That way you can be pleasantly surprised if you have extra. Course Page 15

Measure Your Market Examine Your Personal Expenses How much are you spending, and which categories are costing you the most? Course Page 16

Measure Your Market Size Your Business Your Business Follow a budget for your business. What is the best budget to follow? The one you will follow. Pinpoint how much you are spending. Complete the P&L statement in the Chart of Accounts from The Millionaire Real Estate Agent. Course Page 17

Measure Your Market Size Your Business Find Your Margin Tally up both your monthly personal and business expenses. Subtract your personal and business expenses from your monthly income. Course Page 18

Measure Your Market Size Your Business If income is lower than expenses, or if the margin is tight, you must immediately take two steps: Make cuts in your expenses. Step up your lead generation. Let’s see how to get your margin back under control . . . Course Page 19

CUT THE FAT Course Page 20

Cut the Fat Take Stock and Look for Results Keep one question uppermost in your mind: How does this expense help produce a buyer or a seller lead? If the answer is “I don’t know,” or worse, “It doesn’t,” it is an expense that must be cut. “For every dollar we invest, we expect a multiple return.” Pam Kiker Greenwood Village, Colorado Course Page 20

Cut the Fat Take Stock and Look for Results Try zero-based budgeting: Cut every expense back to zero, Reallocate funds to your justifiable expenses. Course Page 20

Cut the Fat Start Cutting Snail mail Office space Vendor contracts Print advertising Office supplies Course Page 21

Cut the Fat Find Your Margin Think of two areas where you can make cuts today. Think of three more areas where you can commit to making cuts starting next week. Course Page 22

Cut the Fat The Big Two: Payroll and Lead Generation The quickest way to cut expenses is to cut back on payroll. However, your staff is an investment. Before dehiring, try to slim down the payroll. Cut hours. Combine positions. Offer a bonus rather than salary increase. Offer a package. Listen to what your staff wants. Course Page 23

Cut the Fat The Big Two: Payroll and Lead Generation It may not be possible to keep everyone on your team. Top grade your employees; let go of those who do not perform to standard. Look first at: Part-time staff New staff members Borderline performers Course Page 24-25

Cut the Fat The Big Two: Payroll and Lead Generation In a shifting market, your lead generation should be focused on prospecting and enhanced by marketing. Prospecting Metwork! Lead generate. Prospect FSBOs and expireds. Hold more open houses. Get involved in the community. Megas—personally reengage. Marketing Market for a direct response. Drive customers to speak with you, rather than just build your brand. Follow up your marketing with personal contact. Course Page 26-28

Cut the Fat What Not to Cut Not everything must go! Think long term—some people and services are worth keeping. Don’t cut customer service. Expenses that impact your reach with customers are more important than ever. Don’t cut training and coaching. This is an investment that will actually help you make money—and can more than pay for itself. Course Page 29

MAKE THE MOST OF WHAT YOU HAVE Course Page 31

Make the Most of What You Have Use Human Energy Put your creativity and your energy into working both harder and smarter. Do the face time transactions yourself. Get more assistance, not assistants. Work with preferred partners. Course Page 31

Make the Most of What You Have Maximize Your Tools Leverage your yard signs. Use your Market Center services. Course Page 33

Make the Most of What You Have Harness KW Technology Take advantage of eEdge and upload your listings. Course Page 35

Career Growth Initiative   Listing Management Listings (Monthly) Pipeline (Buyers/Sellers) VALUE GCI Agent Trend Agent LORE Local Expert Course Page 36

Career Growth Initiative Course Page 37

THE BOTTOM LINE Course Page 38

The Bottom Line Downtrending markets are a huge opportunity to find better ways to run your business. The degree to which you need to respond will depend on the conditions in your local market. Your success will depend on how well you know and understand that market. Question every assumption you have and every dollar you spend as a result. Course Page 38

MY ACTION PLAN Course Page 39

My Action Plan Don’t put away this guide without developing a plan to put what you have learned into action! Refer to the Action Plan on pages 38-39 of the guide to assess your strengths and areas for improvement. Write down steps you will take to improve your skills—complete it, share it, and commit to it! Course Page 39

Take the other courses in the SHIFT Tactics series! Gaining Mind over Market Upshifting Your Lead Generation Seller Pricing Strategies Seller Staging Strategies Lead Capture and Conversion Internet Lead Capture and Conversion Creating Urgency to Buy Bulletproofing Transactions Effective People Leverage  Short Sales, Foreclosures, and REOs Financing Solutions

From Aha’s to Achievement Course Page 41

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