Principals – Stop Training

Yes, that’s right – Stop your current training. Stop learning how to make more sales and attending Property Management seminars and start learning more about running your business. Real Estate industry training seems to be more heavily focused on Sales skills like negotiating, listing presentations, achieving a higher fee or Property Management skills. As a business owner, you need to be a great CEO.

Thanks for thinking of us but Real Estate Agency Sales will be ok, we will still make sales. We just don’t want to see you and your business in severe financial hardship. We most certainly don’t want to talk to your bank or the receivers that have been appointed. Sadly, I’m receiving too many of those phone calls.

This recent article http://tinyurl.com/74dycn6 explains 2700 businesses went broke in 3 months prior to Christmas. In a different article from external administrator reports supplied to the Australian Securities and Investments Commission, it says “too much failure is self-inflicted”.

“Poor financial control including lack of records” and “poor strategic management of business” are the most common causes of business failures. Poor strategic management is easily the highest cause of business failure, featuring in about 43 per cent of all external administrator reports and remaining fairly constant over the past six years.

Robert Bevan from Best Practice (www.bestpractice.com.au) states that when an agency is sold:

60% of Businesses produce minimal profits and Principals retire with no real assets.

30% have reasonable profits but the Principals still leave with negligible net assets.

Only 10% leave the industry financially secure.

We have to get better at business!

More sales and more managements are not the answer. Without the right business plans and infrastructure more income will be absorbed in costs. Adding more business to a mediocre business is just adding to mediocrity.

It is interesting that 10% leave the industry financially secure because I’ll bet it’s the same 10% of Principals that have a clear, appropriate business plan and review that plan regularly.

My suggestions:

The next training, conference or seminar you attend, make it one that will improve your skills to make you a better Strategic Manager.

Employ a business Coach. (Not a real estate coach, a business coach) Talk to Mark Creedon at Red Monkey Coaching www.redmonkeycoaching.com.

Read, search and research. There are so many great books and online videos that can help you improve.  If you haven’t read the E-Myth by Michael Gerber, buy it today.