By Melissa Krchnak
We often get asked, “What’s the return on investment on this or that?” And most times, we can quantify our answer. Although if it’s about Facebook, we might respond the way Gary Vaynerchuk would: “What’s the ROI of your mother?”
But do you know the difference between something being an expense versus asking about its ROI? As REALTORS®, we all probably have those inevitable monthly expenses: sign storage, database management software, and digital signature services. Have you ever taken the time to really think about these things and what they mean—and cost—for your business?
I was having this conversation with a colleague and here is how he described the difference: An expense is something in which we’ve yet to find the value. That was a big BOOM moment for me! I see the value in those “expenses” just listed and yet I’ve never questioned their ROI.
Go check your bank statement and see if there’s something on there you’re not finding valuable. That, my friend, is an expense. My advice is to pull out your income statement and clear your books of these “expenses” so you can better invest in items with an “ROI”. Don’t have an income statement handy? Here’s a sample chart to peruse.
Melissa Krchnak is the team leader for Keller Williams in Pikesville, MD. Connect with her on Twitter @mkrchnak.
By Rob Reuter, YPN Manager
It’s official: 2012 has kicked into full gear. If you haven’t already, now is the time to start your business planning. Elizabeth Mendenhall, 2012 chair of NAR’s Strategic Planning Committee, recently asked YPN members what kind of statistics they consider when forming their annual business plan. From my former selling days, I focused mainly on two statistics:
- Absorption Rate: Focus marketing in areas/neighborhoods/price ranges that have high turnover rates and low time on the market.
- Frequency of Income-Producing Activities: Where does my business come from and how much time/energy do I put in these areas?
Several other YPN members have great ideas as well:
Dollars/Hour Earned (Brian Copeland): How much are you earning per hour? Take your gross annual income and divide it by the number of hours you worked. Increasing this number means you are making more and working less!
Months Supply/Inventory (Nobu Hata): Communicating this information to the consumer effectively will help ensure more accurate pricing.
80/20 Rule (Tiffany Curry & Kate Koplinka): Are you part of the minority doing the majority of the business?
Market Share (Lena Williams): Increase the percentage of your market share if geographical farming is part of your plan.
Average Sales Price (Kenny Parcell): Continue reading »