3 Practical Profitability Hacks For Brokerage Leaders
By optimizing day-to-day operations and eliminating redundancies, brokerage and team leaders can create a more efficient company and increase profits. Here’s how to get started.
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Talk of efficiency driving margins has increasingly been the subject of conversation. As Pete Flint pointed out during his March Connect Now interview with Brad Inman, “Businesses all across the country do not fit with an environment where it’s about efficiency and driving margins.”
But if efficiency is the name of the game, the question for more traditional real estate companies becomes one of how to incorporate success principles of efficiency and optimization into their day-to-day operations to drive profitability and margins.
Here are three suggestions on what to look for to get started and build on your organizational strengths while leveraging who you are and what you stand for.
Identify and eliminate redundancies
As is the case in many fast-paced environments, there are too many balls in the air, and needs are addressed quickly and on the fly, rather than proactively. On top of that, all too frequently “solutions” are put in place without thoroughly thinking them through.
Furthermore, employees come and go, and leave a trace of systems, processes and initiatives that are too often left in place or go unnoticed because of lack of time or fear that eliminating them would have an undesired effect on agents and operations in general. While different in nature, they all have one thing in common: They lead to hasty efforts, and often redundancies.
In order to address these challenges, we don’t need to move to the other extreme of having layers of cost controls in place or managing expenses in a way that appears to be a drill exercise for everyone involved.
Finding a good balance between the two that includes evaluating the nature of expenses across functions — marketing is often one of the largest expense centers for a traditional brokerage — as well as the impact of existing expenses on the brokerage operations are key here.
Doing a profit and loss analysis for expenses with an open mind, and free of judgement is a great starting place to get redundancies identified and eliminated.
Thrive for efficiencies across the board
Along the lines of redundancies yet deserving of its own bullet point are efficiencies across all levels of your brokerage.
How often have we heard from employees or agents about ineffective organizational processes or outdated structures that hinder effectiveness and not only lead to frustrations, but often delays and issues urging to be addressed? Unfortunately, more often than one would want to admit to.
What might have worked when there were less people, fewer initiatives and less complex operations no longer makes practical sense. Keeping up with the times also means identifying solutions for workflow and processes that systematically eradicate inefficiencies and have a purpose that’s aligned with running the brokerage efficiently and effectively.
And keep in mind here, when systems are aligned with people, they are not only more effective, but so are the people.
Clarity and focus on what moves the needle
While the current market certainly keeps agents and staff extremely busy, the question becomes one of what everyone is actually spending their time and resources on, and whether or not these activities make a difference and move the needle in the right direction.
When you ask and closely listen to your staff and agents, do you hear that there are too many things going on and not enough time? Are there initiatives in place nobody remembers why they were started in the first place? If the answer is yes, then it’s time to evaluate what’s going on and what tasks and initiatives take up time and resources, and making sure they deliver the desired results.
Shedding light on what activities are aligned with goals and needs, and as a second step, naming deliverables that go along with such activities, is one way to be more effective and intentional.
And being intentional not only breaks the reactionary cycle of frantically and often aimlessly drifting through the day, but it also allows for more meaningful activities that drive results while fueling purpose, motivation and performance. Not a bad place to get to, don’t you think?
Marion Weiler is a senior business management executive, leadership & business consultant and president at Weiler International LLC, advising brokerage executive teams and real estate professionals during times of business growth as well as crisis. Connect with Marion on Linkedin.