Working smarter might mean making some changes.

By
Real Estate Agent with Better Homes and Gardens Real Estate Metro Brokers

Working smarter might mean making some changes.As I am desperately trying to complete my 2010 Income Tax returns, I can’t help but notice how expensive it is to run a real estate business.

It turns out that I spent nearly a half of all my income on the little things. I do not pay rent nor do I have any employees. But the cost of doing business keeps going up as commissions commensurately go down.

You don’t have to be a rocket scientist to conclude that this trend cannot continue indefinitely. There is a breaking point, or rather, an “event horizon” from which there is no return.

So I am going to reassess all of my expenses and try to pare down to the bare essentials. I really have to work smarter and make some changes.

Otherwise I will be sucked in the abyss never to be seen or heard from again.

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Rainmaker
406,336
Peter den Boer
Keller Williams Realty Partners - Woodstock, GA
MBA,GRI,ABR,SRES, Associate Broker, Realtor

Richard - I too have been dealing with this issue. I have been cutting back on non-essential costs and have found that it has not impacted my business at all.

August 31, 2011 08:41 AM #1
Rainmaker
320,788
Don MacLean
Simolari & MacLean REMAX EXECUTIVE REALTY - Franklin, MA
Realtor - Homes For Sale - Franklin MA

Richard, Pennies add up a lot faster than dollars,so to speak.

Keeping an eye on them is a different story.

I'm sure that you are now aware that the cattle are escaping the round up won't be so hard

Enjoy the day

August 31, 2011 08:42 AM #2
Rainmaker
476,250
Ken Tracy
Charles Rutenberg Realty - Naperville - Naperville, IL
Naperville Illinois Real Estate

Good morning Richard.  Hopefully you don't get sucked in too far...

I would miss your daily posts.

Certainly cutting costs in this economy is the way to go.  Hopefully we get our revenues going back in the right direction soon!

Have a great day!

Ken

August 31, 2011 08:42 AM #3
Ambassador
1,648,156
Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

Peter...

I suspected as much. There are too many carryovers from the "fat" years. It's time to get lean and mean. Thanks so much for the comment.

August 31, 2011 08:42 AM #4
Rainmaker
1,029,099
Lisa Von Domek
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Good morning Richard,

If it is any comfort, you are not alone...everyone in every industry (other than the politicians, of course) are having to re-assess their business plan and budget.  Hard to do with so little sound economic forecasting available.  Hang in there!

August 31, 2011 08:42 AM #5
Rainmaker
254,306
Connie Goodrich
Keller Williams Realty - McKinney, TX
CRS ABR (McKinney Realtor)Texas

I think we parallel each other sometimes.  I do spend 50% of my earnings on my business and just last week I got out the Quicken and looked to see where I could cut out and be more prudent in my spending choices.  Always good to do a business check and make good decisions.  Yes, there was some waste that needed to be trimmed ... I'm still cutting.  Good luck to you!

August 31, 2011 08:42 AM #6
Rainmaker
1,349,513
Andrew Mooers
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

The profit is in the expenses. New ways to do old things. With new media, backing off some of the time consuming, expensive ways that used to work and trading them in for ones that do.

August 31, 2011 08:43 AM #7
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Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

Don...

I love the allegory ... and I'm going to round-up those cattle right now! Thanks.

Ken..

I have plenty of business but I am barely getting by. It's a little hard to accept sometimes but it is what it is and I must deal with it! THX.

August 31, 2011 08:45 AM #8
Ambassador
1,648,156
Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

Lisa...

Thanks so much for the encouragement. Until you see the numbers in black and white, it's hard to grasp the big picture. Thanks so much.

Connie...

We definitely ARE on the same wavelength. Worst part is, we could have been saving the money all along. Thanks my friend and have a great day.

Andy..

And "CHEAPER" ones that "DO!" Thanks so much and I hope that you have dried out from the storm.

August 31, 2011 08:48 AM #9
Rainmaker
156,031
Suzanne Gantner
Sky Realty, Central Texas Real Estate - Round Rock, TX
GRI, E-Pro, SRES, SRS, ABR

Times have proven that I was spending money needlessly and not getting any return.  I have been trimming useless marketing costs, non seen publications, direct mail farming and other non-producing gimmicks and time wasters.  It adds up fast. 

August 31, 2011 08:49 AM #10
Rainmaker
565,341
Kathy Sheehan
Movement Mortgage 770-634-4021 - Atlanta, GA
Branch Manager

I think the changes in the real estate business over the last few years has impacted the way we all promote our business.  As I do my business planning for the next year, I make a determination on what worked and what didn't.  If it didn't work, there is no reason to continue.

August 31, 2011 08:54 AM #11
Rainmaker
765,132
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Richard,

We are doing the same thing, and making unnecessary expenses carry their weight with an ROI.  Or they get trimmed.

August 31, 2011 09:05 AM #12
Ambassador
1,321,019
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Richard,

I started that process last year, and am still working on it.

Rich

August 31, 2011 09:06 AM #13
Rainmaker
362,787
Kim Boekholder **Results Real Estate**
Results Real Estate 801.580.5624 - Sandy, UT
Broker, Selling Salt Lake Homes

A lot of people don't realize how much it cost to be in this business.  Its time for me to sit down and evaluate the year so far and see what expenses need to be cut back.  This is a great point for everyone in the business to read, actually everyone who is self employeed needs to read your blog and re-evaluate where they spend their money.

August 31, 2011 09:12 AM #14
Ambassador
536,756
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

I love your line, "event horizon" maybe you could retool the career, your posts are outstanding on a consistent basis, ever thought of blogging for others for a living....just a thought

August 31, 2011 09:18 AM #15
Rainmaker
688,251
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

Please share your information!  I find the same thing going on with me.  I am trying to scale back, but where??

August 31, 2011 09:46 AM #16
Rainmaker
126,712
Wendy Cutrufelli
Alain Pinel Realtors - Walnut Creek, CA
Contra Costa Realtor

Avoid the abyss!  It would be horrible to never hear from you again!

August 31, 2011 09:55 AM #17
Rainmaker
1,738,937
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I hate waiting to do my taxes this late, but a respected friend told me one time that it isn't the big things that will kill your business it is the little expenses.  I have found that over the years andsseveral different occupations that he was right on the money.

August 31, 2011 10:07 AM #18
Rainmaker
524,670
Dr. Stacey-Ann Baugh
Century 21 New Millennium - Upper Marlboro, MD
A doctor who makes house calls.

I started doing that earlier this year.  It's amazing how the tiny expenses really add up fast.  Good luck.

September 02, 2011 08:28 AM #19
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