Brokers: Teach Your Team About Business Profitability
Revenue and expense management classes are the gift that keeps on giving. Agents who know how to keep an eye on the bottom line also maximize profits for their broker.
NEW YORK – The vast majority of agents are essentially small business owners. Helping them maximize their income through the skillful management of revenue and expenses is vital for generating the most net profit.
Brokers can assist agents by providing annual profitability training, either scheduled as a group session or one-on-one. Ideally, it should be completed by the end of February, along with individual profit and loss (P&L) statement assessments that each agent can use in their business. The statements typically feature revenue (gross commissions) as well as expenses (personal marketing expenses, automobile expense, dues, subscriptions, and so on).
Brokers should also highlight how more leads results in more sales or pays better splits compared to alternatives – and how agents’ revenue can increase through the broker’s absorption of certain expenses such as marketing, administrative services or rent.
Teams should consider inviting their CPA or financial planner to evaluate P&L statements and introduce other helpful topics such as tax or retirement planning.
Profitability training creates an understanding about the financial structure of an agent’s overall real estate activities, and often helps them identify disproportionate or overlooked expenses.
It may also serve as inspiration. It can focus agents on achieving a higher net income figure, and it demonstrates the value of a broker’s leadership.
Source: RISMedia (01/11/21) Johnson, Sherri
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