Learning the Finances Behind Runnng a Succesful Business! BUDGET WORKSHOP

KELLER WILLIAMS CULTURE Turn cell phones off - if it rings, be prepared to donate to KW Cares Respect your classmates, no side bars All questions are important; parking lot questions if outside of the scope of the training will be answered outside of class in the interest of covering all the material. Respect the time constraints of the class

THE STARTING POINT Are you an agent at a company? Or, do you own a BUSINESS? What are you working towards? What does your business look like? Begin with the end in mind The Checkbook and Capitalization Capitalization is - The sum of a corporation's stock, long-term debt and retained earnings. Also known as "invested capital".

SETTING-UP YOUR BUSINESS Operating account, Reserve account, Retirement account! The BIG THREE Operating Account - what is it used for? what do you deposit? why? When do transfer? Reserve Account - why do you need reserves? Retirement Account - SEP vs IRA

REVENUE BUDGET What is your revenue budget? How many sales? How many listings? Is the goal realistic? Does it meet basic expense requirements?

EXPENSE BUDGET What are your expenses? Fixed cost vs Variable cost Red Light vs Green Light Keep your fixed costs as low as possible

FIXED COSTS These are the costs you incur for being in business: MLS Dues; Office Dues; Licenses; Vehicle Operations; Accounting; Communications; Office Supplies; Legal Expenses; Designation Expenses; Domain Names(?); Salaries What is your monthly fixed cost? $$$$

VARIABLE COSTS Variable costs should have a strategy and plan. Marketing Domain Names; Mailers; Contact Programs; Websites; Print; Flyers; Signage; Associations Can marketing programs create a fixed cost? Do you know the difference? What you have to have vs what you want!

RED LIGHT VS GREEN LIGHT How do you detrmine when you can spend money? What should be your target expenses? Source Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecTotals Print $ - Seminars $ - Radio $ - Internet and Mailers $ - Mailers $ - Flyers $ - Total Marketing $ - Training $ - Accounting $ - Auto Maintenance $ - Client Entertainment $ - Computer Support $ - Dues & Associations $ - Fuel $ - Legal $ - Networking $ - Office Equipment $ - Office Supples $ - Phone Expense $ - Shipping $ - Travel $ - Total Expenses $ - Month total $ -

DID YOU MAKE A PROFIT What is a P/L? How do you set one up? How often should you run one?

WHAT IS NET WORTH What is an Assest? What is a liability? What is considered equity? Do you know your net worth?