The Market has Shifted, What are you going to do about it?
Up Markets Conceal and Tough Markets Reveal
The market is shifting, so what are you going to do about it?
There are three types of business people in this world:
The type that will pivot and make adjustments and that have the ability to innovate and try new things, they may work or they may not. Point is, they are failing forward.
The type that will watch the innovator, determine what will work for them and then try to implement into their business. Still willing to take a shot but perhaps a more measured approach.
The type that will watch and do nothing.
Which one are you?
That question isn't meant to define you, it's to identify you, who you are right now.
You know what's cool? You have the ability to go from #3 to #2 or even to #1. You just need to decide to do it.
The most successful business people I have talked to in my career are the ones that can identify the shift in a market and begin to look at their business from a strategic point of view.
If you understand your real estate business then you should understand your budget, you should understand your margins, you should understand your revenue, you should understand when and where to cut and when and where to invest.
There are a lot of real estate agents that don’t operate with a budget, so it’s impossible for them to understand their profit margins.
The very real and sobering reality is that those agents may not be in business when this pandemic is over.
If you continue to spend the way you were when the market was ‘normal’, and that’s your normal not mine, then you could be looking to shutter your doors.
The most intense part (for me) of the book Shift: How Top Real Estate Agents Tackle Tough Times is the chapter on ‘Re-Margining Your Business’.
It forces you to understand the economics of your business.
It will open your eyes to the who, the what and the why of spending money on your business.
What are the three W’s?
Who are you writing checks to? Meaning staff or vendors?
What are you spending your money on? Meaning systems, lead gen, technology etc…
Why are you spending on what you’ve identified as your expenses?
If you can identify the three W’s and get a good understanding of the dollars going out the door right now, it will be important for you to begin to reallocate those funds or cut them off directly.
Remember that you are running a business, understanding your revenue and what your margins are will help to better align you to your expenses.
You are not the government and do not have the ability to print money, that means you won’t be able to spend your way out of this.
Making cuts where needed with a drop in revenue will help to realign your profit margins and may help you to run leaner and meaner when times get better.