{"id":300,"date":"2008-09-04T19:25:49","date_gmt":"2008-09-04T19:25:49","guid":{"rendered":"https:\/\/bhgrealestateblog.com\/?p=300"},"modified":"2024-12-30T14:53:44","modified_gmt":"2024-12-30T19:53:44","slug":"5-ways-to-cut-costsand-still-profit","status":"publish","type":"post","link":"https:\/\/bhgrecareer.com\/bebetterblog\/5-ways-to-cut-costsand-still-profit\/","title":{"rendered":"5 Ways to Cut Costs…and Still Profit"},"content":{"rendered":"

Posted by Nicolai Kolding<\/strong><\/p>\n

Today I was invited to speak on a panel at the RISMedia Leadership Conference<\/a>.\u00a0 The topic was “5 Ways\u00a0Where You Can\u00a0Cut Costs-and Profit.”<\/a> My five suggestions were:<\/p>\n

1)\u00a0 Index Commission Plans<\/strong>.\u00a0 This is about properly resetting the thresholds at which higher commissions are paid out so that the schedule is aligned with inflation.\u00a0\u00a0This idea also works with\u00a0desk fees or other fees so you should apply it there, too.\u00a0 For a detailed explanation, see my indexing post<\/a> from earlier this year.<\/p>\n

2)\u00a0 Control Advertising Costs<\/strong>.\u00a0 Although this is by no means a new idea, we as an industry are still behind the curve moving our advertising from print to online.\u00a0 As a broker\/owner, you need to aggressively push this issue.\u00a0 Every manager should analyze (a) their advertising spend as a percentage of their company dollar (and split that further to analyze various kinds of advertising spends) along with\u00a0(b) the number of closings by source (print, online).\u00a0 From that you can calculate your advertising cost per closing, by source.<\/p>\n

3)\u00a0 Control Paper Costs<\/strong>.\u00a0 Whether it’s printers, copiers, or faxes, brokerages need to actively control these costs or they can run amok.\u00a0 There are programs available that can help you monitor and limit copy and print usage in an effective and cost-efficient way (see Print-Limit<\/a> or PaperCut<\/a>).\u00a0 Many will save costs by simply eliminating banner ads when web pages are printed.\u00a0 For faxes, make frequent use of readily-available and commonly-used tools like eFax<\/a> or myfax<\/a>.<\/p>\n

4)\u00a0 Mitigate Fraud<\/strong>.\u00a0 Most companies barely consider this a possibility but it could be a very real cost.\u00a0 Some studies would suggest that up to 3{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} of all real estate brokerages have some form of internal fraud going on and the median average cost per fraud is upwards of $200,000.\u00a0 A few simple steps could help safeguard your company from this very real possibility (see my fraud post<\/a>\u00a0from earlier this year\u00a0for more on this).<\/p>\n

5)\u00a0 Reduce Space<\/strong>.\u00a0 I have blogged about this over<\/a> and\u00a0over<\/a> but I don’t think this can be repeated enough.\u00a0 Question every last square foot of space you have and ask yourself if it is being used in the best manner possible.\u00a0 Take advantage of every opportunity to reduce your footprint.\u00a0 Try this exercise:\u00a0 calculate what your production per square foot is (simply take your company dollar or EBITDA and divide it by your square footage) and compare it to estimates of your competitors (you can probably get very close just by looking up closed sales volume through your board, extrapolating their GCI based on\u00a0your market knowledge of their rates,\u00a0estimating their splits – again based on what you know –\u00a0and then estimating\u00a0their office size).\u00a0 Although it’s an inexact measurement, you may still see something interesting when you do this.<\/p>\n

The advantage of implementing these ideas is that they’re relatively easy and provide measurable results.\u00a0 Plus, I think that positioning your company for the future includes shifting advertising dollars to online sources, eliminating faxes and excessive printing, and limiting your footprint.<\/p>\n","protected":false},"excerpt":{"rendered":"

The advantage of implementing these ideas is that they’re relatively easy and provide measurable results. Plus, I would think that positioning your company for the future would include shifting advertising dollars to online sources, eliminating faxes and excessive printing, and limiting your footprint.<\/p>\n","protected":false},"author":181,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[181],"tags":[3961,5631,9821,12761,15691,30881,33981,37031,40551],"class_list":["post-300","post","type-post","status-publish","format-standard","hentry","category-real-estate","tag-better-homes-and-gardens-real-estate","tag-broker-cost-cutting","tag-cost-controls","tag-efax","tag-fraud-mitigation","tag-papercut","tag-real-estate","tag-rismedia","tag-space-management"],"yoast_head":"\n5 Ways to Cut Costs in Real Estate Brokerages ...and Still Profit<\/title>\n<meta name=\"description\" content=\"Nicolai Kolding, COO, Better Homes and Gardens Real Estate discusses how to cut costs in real estate 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