I reviewed SHIFT Tactic #1 Get Real, Get Right – Mindset & Action, so now its time to move on to Gary Keller’s #2 tactic from his new book “SHIFT”. Re-Margin Your Business – Expense Management.
Gary starts off this tactic by telling us to get ready to be uncomfortable. To change is to be uncomfortable. To shift is to change. Does this SHIFT in the real estate market feel uncomfortable to you?
Tactic #2 tells us that the first change in your business is to “re-expense” itself. Trying to “revenue” your way out is not the best strategy.
“Generating more income may be impossible in the short run and take too much time in the long run….Get your expenses lower-now!” (SHIFT page 29)
Gary shares with us what the business of profit is really about,
“To generate revenue you generate leads. To make a profit you manage expenses. This is true for all businesses. The profit you seek will always be made in the way you manage your money. So when the market shifts, you must create a budget that matches your revenue. We call this re-margining your business.” (SHIFT page 30)
(In a whisper) Psst…this is also great advice for our personal life and personal expenses.
There are two important terms that Gary uses when thinking about your business expenses. “Cost-plus” and “lead with revenue”. If you are familiar with the Millionaire Real Estate Agent book, you already are familiar with the “lead with revenue” term from the budget model.
TERMS TO KNOW:
Cost-plus: every dollar spent should return its original amount plus a reasonable profit
Lead with revenue: working from a position of profitability or, working from a position of having enough revenue already on the books so you know exactly when profitability starts.
In the next couple of posts I will explore “Protect Your Margin” and “Get Your Money Smart Again”.
Related Posts:
SHIFT Real Estate Training In Keller Williams Everett
How I See Shift Helping My Real Estate Office
Live SHIFT Real Estate Coaching With Tony DiCello
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[…] SHIFT Tactic #2 Re-Margin Your Business – Expense Management […]
[…] In a shifting real estate market, you are going to have to do more. You are going to have to work harder, be more efficient, more effective and even work longer hours; all the while you are going to have to do this while spending less money. […]