For any real estate agent, the cost of doing business can start to feel overwhelming. Between all of the mandatory fees and dues, brokerage costs, operating expenses, tech and follow up systems and advertising dollars, if you don’t track and adjust spending as needed, profits will start to shrink.
So what should we do to make sure we get the most out of the money we put into our business?
Track your expenses.
Seems simple right – but how can we start cutting costs if we don’t have a detailed record of what costs are? There are several pieces of software out there just for RE – but this can be as simple as keeping a spreadsheet. Start by tracking all of your expenses so you can figure out what’s really paying off for you. As in any budget, give it 2-3 months of tracking to see exactly where your money is going.
Barter for Goods and Services.
Throughout my career owning and managing multiple businesses, I’ve often found that bartering or trading for goods and services saved us a huge amount of money. Sometimes we ended up receiving services we never would have otherwise. A great example of this is inside our Service for Life! marketing program and newsletter, where you can include a monthly insert with your recommended local service providers, ask for an ad contribution from those providers, and in many cases cover your printing and mailing costs.
The “Tech Stack” and Advertising
In Real Estate it feels like every week there’s a new shiny penny or silver bullet for you to spend your money on and many of them can and will work if they’re adopted correctly into your business as a system. However, there are some great free resources we wanted to recommend as some options for you to save costs in your business if you’re already spending a lot of money in these areas.
Here are some free and low-cost options:
- Social Media (check out this article for more!)
- Google Drive -> G-Suite. Manage calendars, emails, documents, storage all together.
- Hubspot CRM. Free and simple CRM, with lots of tools to help you manage your leads.
- Trello -> Project Management. Help organize your work-life and your systems!
Use Your Time Efficiently.
As a Realtor, or any type of salesperson- you feel like you’re always ‘on’- and that can be exhausting. It’s easy to let time get away from you, sitting at your desk, clearing out stacks of paper – but fixing this means setting up systems, tracking activities, and measuring your results. What’s your highest and best use?
You shouldn’t be wasting lots of time on the little things. Your first priority is what’s bringing in money: devote the largest amount of time to that. Don’t get sucked into endless email checking and response. Schedule your day around the most important items on your to-do list. Read this article for more about how to set up systems in your practice, so it becomes second nature to focus your energies: (https://agentinnercircle.com/seven-figure-systems)
Budget for an Emergency Fund and Borrow Wisely.
Last but not least – make sure you budget for an emergency and if you absolutely need to borrow money for your business, do it wisely. If you’re new in real estate, most brokerages and professional coaches will recommend that you have 6 months of both personal and business expenses saved in the bank before making the leap into Real Estate as a full time career.
Many times, your business will take off a lot quicker than that but you’d much rather be safe than sorry. If you’ve been in the business for a while, it’s still incredibly important to make sure you have an emergency fund. You never know when business might be slow for a little bit, or you may need to adjust to a market shift.
If you’re not paying close attention to your expenses, they can add up quickly. However, tracking your expenses correctly, saving money where you can and using your money efficiently is the perfect recipe for a great income in your Real Estate practice.
2 thoughts on “Cutting Costs in Your Real Estate Business”
Good comments. But also advise any agent, especially a new agent to take at least 20% of each closing and pay IRS taxes….nothing is worse than being behind on those.
Great comment Mary! You never want to be short for Uncle Sam!