The Top 5 Ways Money is Leaking Out of Your Business

Most Realtor's suffer from the same money leaks in their business and do not even know it.  

This episode of Agents in Action recap of the most common money leaks or “gaps” I noticed among the agents I have been coaching or met at speaking events this year. It was interesting to me to see these same patterns repeating themselves across the board. It was so consistent, that I wanted to go through these with you so you can take a look at what you’re currently doing in your business.  If you can, grab a pen and paper so you can write a few things down as we go through a few exercises during this episode. 

You have gaps that are allowing money to leak out of your business. Imagine this scenario; The Bank Manager calls and has some news to share with you…Think about who you currently bank with...you get a call from the branch manager, and he/she says...I needed to alert you to something that we noticed when we came in this morning...it must have happened overnight.  It appears you have a leak in your account.  Money is leaking out of your account, and we are making every attempt to stop it. However, nothing has worked yet.

What would you do?  You would probably get to the bank right away to withdraw your money and stop the money leak. 

It wouldn’t be anything we’d just “get to” when we had a chance.  It would be urgent.

 So let’s use that example and look how it relates to our business. When is the last time you took a close look at your business and did an audit for money leaks it may be experiencing?  For this purpose, we will define a money leak as lost opportunity income in one or many locations in your business, that when stopped, would significantly increase your income and overall profitability. So, I thought I would bring these up today so you can take a look at your business, where they may be money leaking, how much, and with a new awareness, begin to take steps on some or all of these areas and put an end to the thousands and thousands of dollars being lost every month.

 

These are the top 5 areas I noticed agents are losing the most money. As we go through them together, remember to have a pen and paper ready so you can determine what might be leaking from your business each month, and over the course of the year.

 

Lacking clearly defined goals/objectives - I would say of all the agents I’ve come in contact with, only 10-15% (being a bit generous too) of them have clearly defined, time-bound, measurable goals that they are REALLY excited about and that are in writing.  That’s very important that they are in writing. We can’t overlook the power that comes from being connected to our life purpose and having clarity here is absolute power!  It’s time we get back to this basic success principle of having goals and dreams that fuel our engines each day to go out and make it happen.  Without them, we often find ourselves “drifting” through each day that passes and end up living quiet lives of desperation. For this one, I want to suggest you ask yourself, how many sales are you missing out on each year stemming from a lack of powerful, compelling goals that you haven’t yet clearly established...don’t forget in writing. Take that number and multiply it by your average commission check and that will be the “money leak” for this one area.  By the way, be brutally honest when coming up with these numbers.

 

Lead Follow Up - This money leak comes from our inability to organized, we’re unsure what to say and how long to stay the course when tracking and following up with our leads. If we take an honest look at how we’re following up with our leads, the majority of us wouldn’t say we’re losing business because we’re calling them too much...it’s because we don’t call them enough and worse, many times we don’t ever call.  This is contributing to a tremendous amount of lost opportunity income.  Over the years, both in my personal real estate practice and my observation when coaching agents, the vast majority of your appointments will come as a result of your lead follow up calls, not the initial call made with the prospect.  It’s like an assembly line, suspects, prospects, leads, appointments, close sales.  So, if you don’t have as many appointments as you’re hoping for, it may not just be needing to kick up your lead generation, it’s also directly tied to your ability to effectively follow up with you leads, remain organized and have the perseverance to stick to it. You need to be “sticky.”

 

In 25 years in the real estate business, here is one of the biggest things you’ve learned about lead follow-up;

We never know what is going on in people's lives. I’ve learned not to let someone’s lack of response stop me from following up.  Instead of assuming the worst, it’s possible to catch someone preoccupied with other things.You will be amazed how much business you will convert by remaining “professionally persistent” stay organized and stay the course; it will pay off for you.

 

Pre-Qualifying - Almost no one is doing this...and if they were, it was being done inconsistently and without a real plan to do it intentionally each time. All we are talking about is having a series of predetermined questions you are going ask of every seller and buyer before you agree to set an appointment to meet up.  It’s something I made a standard in my business many years ago. I didn’t always, so I understand why an agent may not be doing this right now.  If they “pass” your standards test (if you will) you move forward and if they don’t you move on.  What doesn't make sense is why once you know better, why anyone would continue going out to meet with prospects without first making sure they’re qualified, or let’s be frank about it, that it’s worth your time to meet with this particular buyer or seller.  To that point, there’s part of the issue...we don’t value our time enough, know exactly what our time is worth and would rather fill that time with movement instead of making sure we’re achieving. Don’t mistake movement for achievement. How many transactions can you estimate are being lost each year due to not working with the right people or spinning your wheels?  That takes you out of the game to find the right prospects. Write it down... 

Practice - Role Playing/Accountability - Again, this was one of the areas as an industry we are (for whatever reason) falling short of what is necessary to be able to have any sort of consistency of success.  I’ve mentioned it before; we need to approach our business no different that other professionals that work an ongoing basis to improve their skills, systems and approach to various situations that present themselves regularly.  I want to suggest we look at ourselves as just as a professional athlete would.  We don’t play, for example, baseball, basketball or golf...our sport is “real estate sales” that’s how we make a living.  When we adopt a similar approach to taking steps each day/week as an athletes do to master their skills, we will find our incomes increasing, efficiency growing and overall quality of life improving.  Take a close look at what you are now doing when it comes to practicing and role-playing.  How many sales could you estimate you’ve had “leak” out of your business because you aren’t preparing to win often enough? Write down a number now. 

Post Close systems - I noticed that roughly 75% of the agents had little to no communication or system to stay in touch with clients after the closing. What I am talking about here is just have a plan in place (in writing...not top of mind) that lays out how you are going to maintain the existing relationship so you can retain your client and also earn their referrals.  We all work so hard to acquire the client and then, something odd happens...we’ve spoken with them multiple times a week, often over a period of several months and then “poof” we close the deal and all communication comes to a halt.  I will be the first one to tell you I was guilty of this myself, not because I didn’t care or didn’t want to continue speaking with them.  It was two reasons, I was too focused on the next sale AND didn’t really have someone who came along and pointed out what it was costing me until it had already cost me A LOT of money.  $100’s of thousands of dollars.  In hindsight, many years ago...had I understood that if I had better post close systems in place I would have earned even more referrals and not had to be as focused or concerned about where the next sale was going to come from, I’d been able to have saved a lot of time and not had to work as hard.  So looking back over your time in real estate, how many sales can you estimate are being lost each year due to not having a solid post close system in place? 

Take your the total of the projected L.O.I (lost opportunity income) the transactions and multiply that by your average commission. (10 x 6K = 60K) 15 x $8,000= $120K) I just had an event this week where one agent had $60K, one was $120K and another at $138K) That is life changing money!  Now, this is important; this isn’t meant to depress you...actually, the opposite.  When we realize how with a new awareness around these parts of our business (and others), we have a tremendous opportunity for growth. 

What are some ways agents can work on fixing these money leaks?

 Action Step #1  Determine which you want to work on first. Pick one, sit down and think through a plan you want to implement to stop that leak. 1-3-5 Goal, priority, strategy. Keeping in mind when you do, the money that you will now have coming in vs. the lost opportunity income. Taking that one step further, connect the newly realized opportunity with the result and all the benefits that will also show up in your life. Never underestimate the power of your WHY.  This is the fuel that will keep you moving forward in the absence of immediate tangible results.  The stronger the connection, the better. In fact, I’d even say getting it to the level of PASSION!  This is when it actually moves you emotionally/spiritually. Once you get one dialed in, then select the next most important and repeat the process until you have done all the areas or those you want to address.  Keep in mind; your biggest opportunities may not be listed in these top 5, that’s fine, figure out which it is and take action.

 

Step #2 - Identify who you can get to help you in the process.  At your office, a broker, manager or productivity coach, an associate...someone who you can turn to for guidance, accountability and can be a sounding board for you to run ideas past. I think you would agree, when all is said and done, no one succeeds alone. Surround yourself with support and it wouldn’t hurt to get someone to be accountable to as well. :)

 

Step #3 - Time block for this new activity and make it happen.  I recommend you strongly consider using the 66-day challenge tool from the ONE Thing book to use as your leverage to make sure you successfully develop this new habit.