Sustaining a Profitable Business in a Shifting Market
Sustaining a Profitable Business in a Shifting Market
Gary Keller and Tony DiCello sat down with a panel of three Keller Williams associates who had drastically changed their business financials to meet the demands of shifting market. Like any good investor, these panelists diversified quickly, staying lean and open to changes in their systems, processes and people.
Brett Tanner, associate with the Tempe – Scottsdale (Ariz.) market center
After the housing crisis in 2009, foreclosures and short sales ran rampant in Arizona. Brett Tanner jumped in capturing the REO business. As the market moves more toward a state of normalcy, those types of transactions will be less and less. “If I didn’t change with the market, I was going to be out of business,” he told the audience.
Tanner diversified, choosing to tap the investor market. Once he had a niche, he need a value proposition. He asked himself four questions:
- How can we work with investors?
- How can we make their job easier?
- How can we provide them with better information?
- How can we get their business?
Tanner was able to provide real-time data to investors based on the market. He and his team took MLS data and created reports that were delivered to the investors twice a day. Creating better and more useful data, drew investors to him because – he became a valuable resource of information – not just a sales person.
When asked about the challenges of diversifying, Tanner responded that the most difficult part was finding and maintaining the administrative support and infrastructure he needed to run such a large amount of data. “To be able to look at everything every single day and get that information out in a timely manner, was a huge undertaking,” he said.
As for staying focused on his core model, the most important thing he says to do is “build the systems and then put the right person in charge to run it and manage it. I’m always on the lookout for talent.”
The key takeaway: There is a niche in every market, what’s the next niche and how will you earn their business?
Aaron Armstrong, Greenville (Tenn.) market center
“When you only have one person doing a job and they leave, you get that job back.”
Several years ago, this was Aaron Armstrong’s biggest business challenge. He had built a successful business, but was using the wrong model creating an unstable – and unsuccessful – real estate business.
He found the answer to his problems were to narrow people’s job description. “If you provide the right leverage and administrative support, they can do more and focus on what they’re good at,” said Armstrong, later bringing up a point from The ONE Thing, “What you build today will either empower you or restrict you tomorrow.”
The key to making his business run efficiently was replacing people with the RIGHT people. “If you do this, it will be a bigger, better and more powerful business in the long run,” he said. Armstrong suggests going back to AVA validations, looking at key people and asking the question: “what do they want to achieve and how are they going to do it?”
By allowing others to succeed, you are allowing yourself to achieve more. “Once you hire another person, your goals no longer matter, theirs do,” said Anderson. Once others get what they want, it’s easier to achieve more in your own life. “When you have a strong support team, you can focus on what you do best and how to excel at that,” Armstrong concluded.
The key takeaway: Failure is a natural part of success. Learn from it and learn how to build a team that can support each other’s success.
Charlotte Savoy, Greater Howard County (Md.) market center
Charlotte Savoy’s mega team profit margin is 65 percent. How did she do this? By cutting unnecessary expenses in every way possible.
Savoy has three key habits to keep expenses in check:
1. Run lean and mean.
2. Track everything.
3. Watch the numbers daily.
Savoy had a mindset shift when the market fell out. She needed to get back in the game and this time she was going to be smarter about it. She began monitoring her business accounts closely, even switching from a credit card to a check card so that all transactions were cleared immediately and accounts were shown in real time. By keeping a close eye on accounts and where expenses were coming from, she tightened the purse strings on anything that wouldn’t provide more value than its cost.
When monitoring these expenses, Savoy found that while she used to find joy in spending money, her joy now came from saving money. “When you can see and teach other people to save money, that’s life changing,” said Savoy.
Savoy suggest several strategies to cut expenses:
1. Look at all expenses
a. Salaries, wages and commission splits
b. Automated systems – merge, change or eliminate
c. Travel, dues and education
d. Office supplies
e. Client gifts
f. Items that offer no lead generation income
g. Marketing and advertising
2. Educate the agents and team members
How do you find the money hot spots? Savoy offered a few ideas:
1. Put systems into place
2. Track money sources
3. Comparison shop
4. Verify the users
5. Investigate the purpose
6. Reallocate costs
7. Vendor money
8. Find credits
9. Online discounters, coupon codes, ebates.com, free shipping
The key takeaway: No expense is worth it unless it will generate more income than its cost.
Shifts happen. If you’re business is in jeopardy and you need to get back in the game and the competition just step back and examine your source of business, focus on what’s important and monitor your expenses closely.
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