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REVISED EDITION
Remargin Your Business
An Agents Guide toExpense Management
Breakthrough to Mastery
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An Agents Guide to Expense Management
Main Ideas
1. Perspective on Expense Management
2. Measure Your Market
3.Size Your Business
4. Cut the Fat
5. Make the Most of What You Have
6. The Bottom Line7. My Action Plan
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Perspective on Expense Management
Protect Your Margin
When the market shifts, your margin becomes
your biggest issue.
Protecting your margin = saving your business.
Its time to cut back on expenses.
Unless it is nailed downit goes.Gary Keller
Pages 7-9
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An Agents Guide to Expense Management
Perspective on Expense Management
(continued)Who Will Be Affected?
Question
Can I really thrive in a down market?
Answer
No . . . and YES
In the short term, everyonein an affected marketwill feel the downturn equally. But by cutting
expenses fast, anyonecan thrive in the long term.
Page 10
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An Agents Guide to Expense Management
Perspective on Expense Management
(continued)Get Your Money in Shape
Phenomenal opportunities exist, but you need
to be fighting fit if you want to take advantageof them.
Fol low these s teps . . .
1. Measure your market2. Size your business
3. Cut the fat
4. Make the most of what you have
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An Agents Guide to Expense Management
Measure Your Market
Follow the Pendulum Swing
Monitor these six market
indicators carefullyifthey are shifting, start
making timely cuts in
your expenses.
1. More inventory
2. Increased days on
market3. Fewer pendings
4. A smaller board
5. Lower production
and/or volume
6. Fewer leads
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7An Agents Guide to Expense Management
Measure Your Market(continued)
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 dont keep their eye on the ball until
they go to the bank and real ize their check ing
accoun t is emp ty, so they better get to work. But Icon stant ly watch what is 30 or 60 days ahead o f me
for closed income.Martin Bouma
Ann Arbor, Michigan
Page 13
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Measure Your Market(continued)
Watch Your Pipeline
Pages 13-14
1. How many closings are in the pipeline for the next two
months?
2. What is your projected income from your closed
transactions?
3. What will be your average monthly income based on
your sixty-day projection?
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9An Agents Guide to Expense Management
Measure Your Market(continued)
Size Your BusinessIt is time to take a cold, hard look at your financial
situation.
Once you have a clear picture of your financialsituation, it will be easier to see what
adjustments should be made.
Look at two broad categoriesyour personal
expenses and your business.
Pages 15-18
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Measure Your Market(continued)
Size Your BusinessYour Personal Expenses
Your lifestyle may need some adjustmentsits 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 yourpro jected inc ome. That way you can be pleasantly
surprised if you have extra. Dave JenksKeller Williams Realty International
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11An Agents Guide to Expense Management
Measure Your Market(continued)
Examine Your Personal Expenses
Page 16
1. How much are you spending, and which categories
are costing you the most?
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12An Agents Guide to Expense Management
Measure Your Market(continued)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.
Download the Excel spreadsheet from
kwu.kw.com/expensemanagement.
Pages 17-18
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Measure Your Market(continued)
Size Your Business
Page 19
1. Tally up both your monthly personal and business
expenses.
2. Subtract your personal and business expenses fromyour monthly income.
Find Your Margin
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Measure Your Market(continued)
Size Your Business
If income is lower than expenses, or if the margin
is tight, you must immediately take two steps:
1. Make cuts in your expenses.
2. Step up your lead generation.
Lets see how to get your marginback under contro l . . .
Page 19
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15An Agents Guide to Expense Management
Cut the Fat
Take Stock and Look for ResultsKeep one question uppermost in your mind:
How does this expense help produce a buyer or a
seller lead?
If the answer is I dont know, or worse, It
doesnt, it is an expense that must be cut.
For every dollar we invest, we expect a
multiple return.Pam Kiker
Greenwood Village, Colorado
Page 20
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Take Stock and Look for Results
Page 20
Try zero-based budgeting:
Cut every expense back to zero,Reallocate funds to your justifiable expenses.
Cut the Fat(continued)
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17An Agents Guide to Expense Management
Cut the Fat(continued)
Start Cutting Snail mail
Office space
Vendor contracts Print advertising
Office supplies
Pages 21-22
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18An Agents Guide to Expense Management
Find Your Margin
Page 23
1. Think of two areas where you can make cuts today.
2. Think of three more areas where you can commit to
making cuts starting next week.
Cut the Fat(continued)
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19An Agents Guide to Expense Management
Cut the Fat(continued)
The Big Two: Payroll and Lead GenerationThe 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.
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Cut the Fat(continued)
The Big Two: Payroll and Lead GenerationIt 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
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Cut the Fat(continued)
The Big Two: Payroll and Lead GenerationIn 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.
Megaspersonally 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.
Pages 26-28
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22An Agents Guide to Expense Management
Cut the Fat(continued)
What Not to CutNot everything must go! Think long termsome
people and services are worth keeping.
Dont cut customer service.Expenses that impact your reach with customers
are more important than ever.
Dont cut training and coaching.This is an investment that will actually help you
make moneyand can more than pay for itself.
Pages 29-30
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23An Agents Guide to Expense Management
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.
Pages 31-33
A A G id E M
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Make the Most of What You Have
(continued)
Maximize Your Tools
Leverage your yard signs.
Use your Market Center services.
Pages 34-35
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Make the Most of What You Have
(continued)
Harness KW Technology
Take advantage of eAgentC.
Upload your listings on the KWLS.
Pages 35-36
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26An Agents Guide to Expense Management
The Bottom Line
Downtrending markets are a huge opportunityto 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.
Dave JenksKeller Williams Realty International
Question every assumption you haveand every do l lar you spend as a
result.
Page 38
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27An Agents Guide to Expense Management
Productivity Boosters
Track Closing Details
Build Trust Relationships
Use Premade Marketing Content
Automate Your Mailing
Page 39
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28An Agents Guide to Expense Management
My Action Plan
Dont put away this guide without developinga plan to put what you have learned intoaction!
Refer to the Action Plan on pages 40-41 ofthe guide to assess your strengths andareas for improvement.
Write down steps you will take to improveyour skillscomplete it, share it, andcommit to it!
Pages 40-41
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29An Agents Guide to Expense Management
Take the other courses in the
Breakthrough to Mastery Guide 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
30
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30An Agent s Guide to Expense Management
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