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How many times have you heard someone brag about their $80 million in sales volume? Sounds impressive, right? But here’s the kicker – volume doesn’t always equal profit.
Focusing on profit ensures your work-life balance, and as a CEO, you should solely focus on profit – what’s left after everyone and everybody is paid because that’s what you have left to build your life with.
As a CEO if you only focus on volume, you’ll never be able to retire. Focusing on profit is what allowed me to start my ancillary businesses. This helps me have more money left (profit) to build my life with, and helps me to live my life by design.
The Volume Trap: When More Isn’t Actually More
You know the feeling. You’re at a real estate event, and everyone’s throwing around their volume numbers like confetti. “$80 million in sales!” they boast. And you’re there, nodding and smiling, maybe even sharing your own impressive figures. But let me ask you something – how much of that money is actually yours to build a life with?
I remember when I used to look at those big volume numbers with a mix of awe and confusion. Something just didn’t add up. It wasn’t until I left my team and had to figure out how to replace volume with profit that I had my big “aha” moment.
I know people selling $10 million in real estate a year who have more money in their pocket than folks boasting $200 million in volume. Crazy, right? But it’s true, and here’s why.
It’s All About the Profit, Baby!
Let’s get something straight: the only reason you start businesses is for profit. Period. The purpose of profit? To fund and build the life of your dreams. Without this fundamental understanding, you’re just chasing numbers that look good on paper but don’t translate to real wealth.
Think about it. If you sold $200 million in real estate but had $199 million in expenses, what was the point? You’re just running on a hamster wheel, exhausting yourself for pocket change.
Thinking Like a CEO: The Game-Changer
When I became the CEO of Real Estate, it wasn’t just a fancy title. It was a complete mindset shift. I started questioning every dollar spent. Is it driving profit? Or is it just bringing in revenue?
Here’s a little secret: on a $700,000 transaction, I’m not getting one check – I’m getting five. How? By diversifying:
- Real estate commission
- Mortgage fees
- Title company fees
- Moving company revenue
- Transaction management company fees
This approach means I’m making more from one client than others make from five separate transactions. That’s working smarter, not harder!
The Passive Income Dream: Make Money While You Sleep (Or Vacation!)
Remember why you got into real estate? I bet it wasn’t to work 24/7. When I was making $130,000 a year at Blue Cross Blue Shield a decade ago, I didn’t quit that job for more money. I quit because it was taking all my time to make that money. I wanted to make money in less time.
That’s why I go on vacation for a month every July. It’s not just for fun (although it is fun!). It’s to test my systems and my profitability. If I can’t go on vacation for a month, it means I’m not prepared for life circumstances as a CEO.
Here’s a real-life example: I have moving trucks. When they’re not being used for clients, I rent them out. For about $350 a month in maintenance, they bring in $1,500 a week. That’s $1,150 in profit I didn’t have to work for. That’s the power of passive income.
The Profit Formula: Your New Best Friend
Alright, let’s get practical. Here’s how you should be breaking down every commission check:
- 30% goes to the cost of the sale
- 30% goes to expenses
- 40% should be your profit
If you’re not hitting, or aiming to hit, these numbers, it’s time for a serious business review.
Your Action Plan
- Start tracking your profit, not just your volume.
- Question every expense. Is it really necessary? Is it driving profit?
- Look for ways to diversify your income streams within real estate.
- Build systems that allow you to make money even when you’re not actively working.
Remember, it’s not about how much money you make – it’s about how much you keep. That’s what you’ll use to build the life of your dreams.
It’s time to think differently, because to get better results, you’ve got to do things differently.
Remember, you’re the CEO of your real estate empire. It’s time to start acting like it!
Until next time, keep pushing for profit and building that dream life. God bless!
