Billion Dollar Agent - Business Profit Review

Let us help you increase your net profits by analyzing your spending and find where you are overspending!

Please email accounting@bestagentbusiness.com to schedule a time to do your BDA- Profit Review.

These are questions and topics for Business Profit Review. It will likely take you 1-2 hours to provide answers. Just give your best estimates. No need to research. We will discuss the answers with you, prepare your analysis and present the results.

The cost for this service is $995

  • You can reply with written answers below each item, or discuss on phone, or dictate answers.
  • You can use our Client Dictation Service to call up and read off questions and answers. We suggest not doing more than 15 minutes per session. Many clients find this easiest method. See http://bestagentbusiness.wikispaces.com/Client-Dictation+Service.
  • Video: In some cases, we will ask for a video or you can supply a video. Please upload to YouTube and mark as private and email us the link to the video.
  • When asked a numbers question, please give best estimate exact number and not a range of numbers. Do not say 50-60 hours, say either 50 or 55 or 60 hours.
  • How many hours a week do you work and how are those organized during the week?
  • How many weeks of vacation do you take?
  • To make more net profit, do you think you need to work more, same, or fewer work hours?
  • What do you need to stop doing and/or delegate off your plate?
  • Overall, you either spend your time Meeting, Calling or doing Other work. About how many hours a week are you spending doing Meet, Call and Other? Break it out. Is that ideal and if not, what should you be doing more of and what should you be doing less of?
  • One Hour Day: If you only had one hour to work each day, what would you do during that one hour? What would be most critical or most profitable thing for you to do during that one hour?
  • Are you more of an assistant/systems person, people helper, salesperson, or businessperson?
  • Are you a Hunter or a Farmer sales personality?
  • Management Time: How many hours per day or per week do you spend 'managing' the business and doing work that could likely be done by a very competent assistant, office manager, or Director of Operations at $30,000-$80,000/year. Based on your situation and market, what would be salary you would probably pay for that position? Do you currently have someone on staff who could do that role if they had their time made available from other tasks?
  • Energy: What three things that you do in your job provides the most positive emotional/mental energy and gets you pumped up? What three things that you do is the most negative energy or saps your emotional energy?
  • If you are married or involved with a significant other, what top three suggestions would they make about you or your business? If possible, email them and connect them to us and pose that question so we can see their reply.
  • Among your fellow top agents who know you or your business, or other business advisors you have, what are most likely the top three suggestions they would make about you and your business?
  • Sleep on your answers from above and the next day share your thoughts and feelings of the most important three things you change or do differently with your personal time management going forward to increase net profits. What should you do?
  • What is your current brokerage arrangement of franchise or independent?
  • If you have been in different situations in your real estate career, describe them and strengths or weaknesses of each approach as it impacted your business and profits.
  • For financials, we need to have financials include all commission revenue BEFORE any brokerage splits paid to broker or fees. Otherwise, you may think your revenue or GCI was $400,000 but it was really $500,000 with $100,000 paid to brokerage, as an example.
  • Transaction Details and Revenue
  • Provide copies of brokerage reports of you and your agents closed deals for prior year and year-to-date separately with dates, buyer/seller, sales price, commission, and any brokerage splits or fees paid to broker.
  • Provide copy of your 1099 from brokerage to make sure numbers all match.
  • Provide export to Excel from your MLS of all deals closed for you and your agents.
  • Provide export from your database system which tracks closed deals for the same.
  • All of that information should match. If it does not, we will work with you and your staff to get in sync to compare applies and apples
  • For brokerage, breakout fee structure of split, franchise national fees if any, office rent, and any expenses charged.
  • Agent fees: If your agents have fees paid to brokerage or to you if you are broker, what is structure and who pays.
  • Provide copy of your Agent agreement showing compensation for your agents. If you have special deals with specific agents, describe that.
  • Provide copy of services provided by brokerage. For example, some brokerages provide some limited assistant services or co-marketing dollars for mailings. We want to know everything the broker will provide you for free.
  • Overall, if you are not an independent brokerage, is your current broker and situation more of an asset or liability and why?
  • Office rent: If office rent/space is not covered by your broker fees, state costs for rent/utilities/etc per month/year, number of staff the space will hold, and current number of staff. Based on that, estimate office space cost per agent per month.
  • What percent of revenue is spent on marketing?
  • What type of numbers have you heard as a suggested target percentage for real estate teams?
  • Based on this do you think your marketing spending is okay or too little or too much right now?
  • What percent of leads are being wasted at some stage or another?
  • What are the top three stages where leads are being wasted?
  • Leads are at various stages when they become wasted/lost. These stages include:
  • Not Captured (never entered in DB), Never Resolved (no phone or email interaction), Email Only (some email interaction), Called (spoken to and a Seller/Buyer ABC lead), Met (Seller/Buyer A lead such as listing appointment, buyer open house, buyer consultation)
  • Which stage do you think will be the most important and easiest to focus on to stop wasting leads at that stage of the sales cycle?
  • Which few marketing expenses could be paused or decreased within a few weeks if you decide to reduce marketing and shift to sales/calling until leads are in balance? How much could be paused or reduced per month?
  • Conversion - Seller:
  • Is this an area with room for improvement?
  • What percent of listing appointments are won with listing taken (whether right away or in future months)?
  • What percent are Seller - Lost Compete (lost to competition at a listing price which you would have taken)? We will want to start to do won-loss analysis
  • What percent are Seller - Lost Price (lost to competition but at a price too high)? How are these tracked to see if they expire or close?
  • Of listings taken, what percent are sold? How does that compare with your market average?
  • Chunking of Leads: We will be chunking leads in database for tracking by New Lead (unresolved), Emailed, Called, Met.
  • Motivation: How is motivation tracked and noted in database? Let's agree upon some motivation levels for Sellers-Buyers. Some chunks suggested: Must (100% must sell/buy by X date), 50/50, Trigger Event (there may be a trigger event which moves motivation/need from 0 to 100% such as divorce proceedings, health, short sale pressure, job move relocation), No Rush (no time pressure so this may be Seller/Buyer C future business in next 1,000 days).
  • Appointments to Close: A key area we want to track down and analyze if appointments/meetings to closed deals. This is easiest to analyze because the numbers are far lower than the total number of leads. For example, for every 100 buyer web leads, you may have 5-10 appointments of first meetings. Your personal conversion rate on Sellers and Buyers is often much higher than your agents. When you add in the mix and growth of Callers/ISAs, the sales cycle becomes more complex.
  • Agents are usually not well organized with Lead Management and leads are lost even after first meetings.
  • Agents are busy with now business and will cherry-pick the hottest leads and if a meeting results in a lead going from A to BC rating then the lead may be lost.
  • Agents are not consistent and persistent with follow-up calls.
  • Buyers - Lender Relationship: Who are your lender partners? What is nature of relationship and any co-marketing money? How would you rate them ABC on their performance on leads? Do they track leads and can they send report of all leads provided for pre-approval last year and status? Can we start to send them Buyer BC leads for pre-approval even if 3-6 months out?
  • How many total agents in your MLS area?
  • Of those, how many do you think did 0 deals last year?
  • How many total deals closed in your MLS area for entire MLS?
  • Based on above, what was average number of deals per agent last year in your area?
  • Last year, about how many total full-time equivalent (FTE) agents did you have? This means equal to full-time. So if someone worked with you for 6 months, count that as .5.
  • How many deals total did agents close excluding your production?
  • Based on above, about how many deals per agent did your agents close last year?
  • How many deals did you refer to buyer's agents which were likely from your Clients/SOI, did not involve significant marketing cost, and were ready to go buyers?
  • Did you pay agents the same split for those type of deals as you paid for buyer web leads that they had to work for 3-9 months?
  • Calling: Are agents required to call leads? If so, how many hours per day and is there any system of accountability to make calls?
  • Showing:
  • For a typical buyer deal, how many hours does agent spend showing and writing up contract?
  • Do you have a Buyer System, like your current Seller System, for showing property, getting Buyer Feedback during the showing process via a 3rd party to make sure the Buyer's Agent is doing their job properly and the personality fit is a good one?
  • Do you periodically shadow agents or have them shadow you?
  • Closing: Who does the 5-10 hours of closing work on buyer deals? Is it done by the agent or the assistant?
  • For 10 buyer appointments with buyers who are pre-approved, how many would you end up closing? How many of 10 do your agents probably end up closing? How can we improve agent conversion?
  • Who is more reliable to get the job done, assistants or agents?
  • How is your current assistant staffing?
  • Do you have any assistants who are A players and they are spending too much time doing low-level tasks and they could upgrade to doing more high-level tasks?
  • Do you have any assistants who are C players and you wonder whether they should be kept, restructured, or phased out of the business?
  • Do you have any assistants who have skills and initiative to implement new systems to improve system if provided the system to implement?
  • Do you have staff who are doing mixed roles of agent, assistant, calling? If so, is that working or are they not fully performing in some area?

Client

  • Confirm and verify the financials we have in the DB
  • Is your Business an LLC, Corp, Sole Proprietor?
  • Is it the only Business? Design? Property Management?
  • Do you own a Brokerage?
  • What Franchise? What do they cover?
  • How many Agents? How are they paid? Amount? Split? Hours they work? Who pays, you or Franchise?
  • Accountant/Tax Person? How are they paid? How much? Rating? A,B,C
    Ask for priory tax Returns to do Audit with Books?
  • Bookkeeper? Duties? onsite? Paid? number of hours? Rating? A,B,C
  • Quickbooks? Which Version? Can we get R/O Access?
  • How many Staff?
    How are they paid? Amount? Hours they work?
  • Do you have a payroll company?
  • How many Bank Accounts?
  • Do you or Employees use Company Credit Cards?
  • How many Credit Card Accounts?
  • Do you have Debt? Loans?
  • Do you pay Rent? Own building?
  • Ask for Copy of P&L if we don't have it yet, If we do have it then go over it and analyze
  • Income - Is it Gross? Before Franchise Splits? Describe Splits?
  • Make sure income categories split out
  • Franchise/Brokerage fees need to be split out and categorized.
  • Expenses - How much is spent on Marketing? What percentage? Make sure expenses make sense.
  • What are your expectations? What are you trying to accomplish?

Bookkeeper/Admin

  • How long have you worked there?
  • What is your job description/role ? What do you do?
  • Break down your hours? and Tasks
  • Do you work onsite? Virtual? Both?
  • What type of software do you use? Quickbooks?
  • P & L Current and Last year comparison
  • Balance Sheet
  • Chart of Accounts


Action Items

Agent

  • Connect with other brokerages to share information about financials and learn
  • Decide about Business Model and make sure set and known (Splits, fees, etc)
  • Work with BAB to clean Balance Sheet - Makse sure loans are accurately reflected on Balance Sheet
  • Make sure Interest expense is reflected properly
  • Consider Goals: What do you want or expect Net Profit to be in 2017,2018?
  • Consider Marketing budget % to spend here - separate from recruiting
  • Decide on version of Quickbooks to use and get rolling


BAB

  • Send Job costing report to Steve and Client to help decide if needed and which version of Quickbooks to use
  • Work with Agent to clean up Balance Sheet and Chart of Accounts


__

BAB Assistant Question:

  • Marketing Income Negative? Possible that this should be in Expense - Look at
  • Broker Fee 0 in 2016? It is a lump sum and 7 are included - Agents have own and in 2017 its about $250/mth - Agents pay but flows through brokerage
  • Marketing Exp 11K? This should be split out into what it is for
  • Payroll Decrease? No longer have Admin Employee


Steve:

  • Our Focus is Net Profit not GCI
  • Differes from most other Coaching Methods
  1. Business Model - Develop this, What does yours look like? What should it look like?
  2. Agent should connect with other Brokers to share financials and see how others are doing it and learn.
  3. Revise Financials
  4. What the Balance Sheet reflects is important


Agent asked about what Steve meant about Business Model - Determining how things are set up:

  • How are splits done (Current 90-10, varies by agent)
  • Commissions
  • Transaction Fees
  • Revenue - Mortgage and Title - none
  • Rents
  • Loans set up


Balance Sheet

  • Work with BAB to clean up
  • Make sure loans are accounted for and accurate


Expense Side

  • Can split Variable and Fixed
  • Fixed (Rent, Core Internet, Etc)
  • Variable (Marketing, Labor)
  • Steve asked about Recruiting $100 - Probably mixed in with other things - need to clean up
  • Steve asked about Agent C Pierce - Why 92K in GCI but paid only $52K on the books?
  • Some is paid directly to Agent at settlement
  • Steve suggested finding out how to best account for this - Ask Accountant?
  • Is Interest Expense reflected correctly?
  • Marketing Budget? - Separate from Recruiting - Consider this and the amount % to spend here
  • Current Bookkeepr has it 80-90% there - Clean up Chart of Accounts and mis catagorized expenses etc.


Assistance/Staffing

  • Steve asked about Admin help:
  • Currently have 3 that are International Interns - working well
  • J1 Visa
  • 2 short term $500/mth
  • 1 longer term $800/mth
  • Agent Needs Listing Assistance to get some stuff off his plate
  • Steve suggested Interns, BAB or someone else?
  • Possibley getting another Agent to assist for $20-$30/hr
  • Good Call
  • services/accounting/billion_dollar_agent_-_business_profit_review.txt
  • Last modified: 2018/06/28 16:58
  • by traceybujaki