Keeping expenses in check is a must at all times for those running a successful business. But as highlighted in Gary Keller’s SHIFT (Tactic #2), a market shift is an especially important time to re-margin and focus on your business while paying extra attention to expense management.
In the first installment of our new series – KW Coaching Corner – KW MAPS Executive Director of Coaching Services Fritz Pollard shares his expertise on re-margining expenses, including an exercise that agents can put into practice now to find the biggest expense culprits.
Implement the highlighter exercise
As a coach, I sometimes come across agents with profitable businesses, but who are bankrupt at home. This leaves me eager to help them take control of the finances in their personal life just as much as the ones in their business life. Every week, I work with my clients to reassess their expenses and drill down on new areas to trim. One of the main ways I do this is through the highlighter exercise.
During this time, we look at our expenses from the past 60 days while thinking about the question: What are the areas in our personal and business life where we are spending outside of the bounds of our reality?
“There is no cut too small. You must reduce expenses to match your income plus an acceptable profit margin. Be brutal. Cut! Cut! Cut! Cut once, cut twice and then keep cutting every week until you’re there.” – SHIFT, p. 34.
We divide spendings into buckets and color-code, which generally leads to the following sections: cost of living, transportation, groceries, entertainment / food / social, and investing. Then, we take five different colored highlighters, and go through each individual item, ultimately leading to a conversation. I had one client who was regularly spending $150 per month on coffee, and sometimes up to $400. The exercise isn’t just eye-opening; it leads to a deeper look into habits, and a conversation about the changes and compromises you might need to make to re-margin your business.
Invest in education
There is spending, and then there is investing. Now is the time to double down on education, and at Keller Williams, we look at coaching as an investment in yourself. An investment in your education goes beyond the scripts and strategies – it’s a commitment to accountability. I have one client that I touch base with every day, just to check in with him and reassess his mindset. Those conversations are hugely important. This is the time you need someone in your corner.
For this reason, Gary Keller invested $20 million to cut the investment of Mastery and Breakthrough coaching in half for the months of April and May. When reducing expenses, coaching and education are the areas to hold onto.
See where you can save
Cutting costs does not have to mean eliminating altogether. As Gary shares in SHIFT Tactic #3, it’s about doing more with less. Which means taking a look at options and areas for saving. One area where our agents can save is CRM expenses. Instead of spending thousands of dollars on disconnected technology, take advantage of the tools of Command to make monthly expenditure numbers zero out.
There is spending, and then there is investing. Now is the time to double down on education.
The leads we buy are another expense to look at. Gary himself has posed the question “What are we doing buying these leads?” Essentially, we are having our own database sold back to us. Agents can pay up to thousands a month for low conversion leads. To offset this cost, KW associates should use Command as their lead generation tool.
Services such as sign installation and personal photography and videography should also be reassessed. Think about which tasks you can do yourself or with minimal assistance and go from there.
Zero in on the small expenses
When working with clients, some of the highest expenses I am seeing fall into categories that are easy to miss. These are the recurring, minuscule expenses – small enough that we don’t put attention on them, but plentiful enough that they ultimately add up to big numbers.
Another category that adds up quickly is online spending. I’ve seen clients with multiple websites, email addresses, dialers … services that cost an extra $10 – $50 per month, but when added all together can take up $200 – $300 per month. Look at these spendings through an annual lens, and you could be racking up to $3,600 per year. That’s a big deal.
When one of my clients wasn’t able to pinpoint these expenses, rather than struggling to find the culprits, she worked backward by canceling her credit card.
Ultimately, the key is to approach expense management not as a real estate agent, but as a businessperson. This mindset will make all the difference.
Introducing BOLD Pivot
In a move now known as BOLD Pivot, Keller Williams recently announced that they will discount the program from $799 to $99 – because when cutting expenses during a shift, an important investment in yourself and your business should not be on the chopping block.
BOLD Pivot was created to help you shift your mindset and adopt the tactics and scripts proven to bring success in today’s business landscape. The global digital experience begins on May 5 and is open to all professionals.Learn More
About Fritz Pollard
With nearly 50,000 coaching calls under his belt, Fritz Pollard was ahead of his time. He started learning the trade of coaching through mentors, and has been recruiting, coaching, and training since the late ’90s – before coaching emerged as a widely recognized career. In 2004, he secured a full-time coaching position, and in 2012 joined KW MAPS Coaching, where he supports coaches and guides agents to:
- Focus on solutions
- Gain awareness of unique strengths
- Identify areas for development, so bad habits, blind spots, or skill gaps don’t get in the way of their success
- Build big lives