Whether you’re a business owner or sales agent running a ‘business within a business’, effectively managing cash flow and expenses is the key to success, especially when times are tough.
It was a topic recently tackled by McGrath’s Betty Ockerlander and The Agency’s Thomas McGlynn in a REINSW webinar. Together the pair provided valuable insights on how to ensure your real estate business not only survives but thrives.
McGlynn says it comes down to “understanding the importance of what you’re spending your money on – both professionally and personally.”
The importance of planning
“It doesn’t need to be a complicated plan, but you do need to have a plan around this. You need to have the CEO mindset and look at areas of your life that are not a necessity, and sometimes cutting that off and sacrificing a little means that you rebound and become a lot better at what you’re doing and how you’re dealing with clients,” says McGlynn.
“Some people have really good discipline and others don’t. I don’t want anyone to live day-to-day,” says Ockerlander, “pull back a little bit if the market is being tight.”
“Many of the best agents I work with have looked at their entire business and made adjustments, and they’re actually now performing better because they’re not stressed, they’re not waking up every day thinking ‘I need to make four sales before I break even’,” expressed McGlynn.
Ockerlander then addressed the issue of hiring an assistant and advised agents to take a cautious approach to business growth.
“I don’t want to scare anyone off hiring an assistant because I think that’s important for your own personal growth, but make sure if you’re going to do that you always have at least their wage for one year ahead in your bank account.
“If you have the salary aside for a year, then you’re ready, you know your goals, and you know they will be able to triple the leads coming into you. Having an assistant is wise, but budget effectively first.”
Ockerlander and McGlynn’s top tips on how to be financially successful:
- Use a spreadsheet to track all your expenses – including the little things!
- Have a clear financial plan and understand factors like net profit after tax
- Ensure you have both your personal and professional finances in order
- Remember that people generally don’t respond well to the ‘bad energy’ created by an agent displaying signs of financial stress or desperation
- Split money into two separate bank accounts – one to cover ongoing needs and repayments, and the other for future savings
- Budget according to your short, medium and long-term goals
Want to learn more about successfully managing cash flow and expenses? Watch the webinar: Challenging Market – managing cash flow and expenses.
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