Video not loading? Click here to watch it on YouTube!
You know that feeling when you check your bank account after a big commission check, feeling like you’ve made it… only to watch that money disappear faster than free cookies at an open house? Trust me, I’ve been there.
Let me share something personal. Picture this: It’s late 2017, I’m sitting at my desk staring at my profit and loss statement after closing three deals – my best month ever. On paper, I looked successful. The numbers were impressive. But something felt off. Despite the growing revenue, I wasn’t building wealth. I was just creating an expensive job for myself.
Today, I want to get real about the sneaky profit killers that might be sabotaging your real estate business – and show you exactly how to fix them.
1. The Revenue vs. Profit Confusion (It’s Not What You Think!)
Here’s a story that might sound familiar: You get a $10,000 commission check and start planning your next vacation… but hold up! Let’s break this down in a way your future self will thank you for:
– The broker needs their cut (20%): Goodbye $2,000
– Those fancy “Just Listed” signs and Facebook ads? Another $1,000 gone
– Your monthly tech stack (phone, CRM, email tools): Wave farewell to $2,000
– MLS dues and other fun fees: There goes another $1,000
Plot twist: That $10,000 just became $4,000. Feeling a bit called out? Don’t worry – I’ve got a solution that’s changed my life and the lives of hundreds of agents I’ve coached.
Create these four magical accounts:
1. Revenue Account (The “Everything Lands Here First” account)
2. Cost of Sale Account (30% – For all those selling-related expenses)
3. Operating Expense Account (30% – Your business’s monthly bills)
4. Profit Account (40% – The money that actually builds your wealth)
Think of it like meal prepping – when you portion everything out ahead of time, you’re less likely to overeat (or in this case, overspend!).
2. Flying Blind: The KPI Problem
Let me be direct: If you’re not tracking your numbers, you’re basically trying to bake a cake without measuring ingredients. Sure, something will come out of the oven, but will it be what you wanted?
Here’s what actually matters:
– Five meaningful conversations per day (Not 50 random “Hey, wanna buy a house?” calls)
– Database growth (Quality over quantity, folks!)
– Conversion rates (Because what good are leads if they’re not turning into commissions?)
– Profit margins per transaction (Remember that cake analogy? This is like measuring your ingredients)
When I started tracking these numbers, I discovered that out of 100 people added to my database monthly, about 10% went under contract. That’s predictable business, friend!
3. The Time Management Trap
You wouldn’t believe how many agents I’ve coached were working all the time but making less than someone working smart for 20 hours a week. Being busy isn’t the same as being productive. Period.
The Solution? Your calendar needs to look like this (Of course, feel free to customize this accordingly):
– 9:30 AM – 12 PM: Lead generation (Non-negotiable!)
– 1 PM – 3 PM: Follow-up and client care
– 3 PM – 5 PM: Business development and systems work
Pro tip: If you’re lead generating 15-20 hours per week consistently (and yes, I mean consistently), you should be seeing 1-2 contracts monthly minimum. That’s not just a random number – it’s based on tracking hundreds of agents’ performance.
Building Systems That Actually Work
Here’s something I keep sharing like a broken record: The biggest difference between agents who make it and those who don’t isn’t talent – it’s systems. Let me show you what I mean:
Instead of:
– Randomly calling people when you feel motivated
– Taking every client who breathes
– Working until midnight because “that’s what successful agents do”
Do this:
– Set up automated follow-up sequences
– Create clear client qualification processes
– Build boundaries that protect your time AND profit
The Money Management Game-Changer
Remember how I mentioned those four accounts? Let’s get even more practical. For every $10,000 commission:
– $3,000 goes to your Cost of Sale Account
– $3,000 goes to your Operating Account
– $4,000 stays in your Profit Account
This isn’t just about making money – it’s about keeping it. Think of it like playing Monopoly – you wouldn’t build hotels without having enough cash reserved for when people land on your properties, right?
Your Next Steps (Because Knowledge Without Action is Just Entertainment)
1. Set up those four accounts THIS WEEK (yes, really)
2. Start tracking your five daily conversations
3. Block your calendar for lead generation
4. Review your numbers weekly (not yearly, not monthly – weekly!)
Your real estate business can fund your dreams instead of draining your life. But it starts with these fundamental changes.
I’m hosting a free webinar next week, and I’d love to dive even deeper into these strategies with you. We’ll talk about:
- how I handle my finances using systems
- identifying profit-driven activities
- Tracking profit and loss effectively
- Breaking down commissions strategically
Transform your business from a money-eating machine into a wealth-building empire: Register for the webinar HERE. – it’s completely free, and yes, I’ll be sharing my actual screen to show you exactly how I set this all up.
Your future self (and bank account) will thank you.
Want more tips like these? Follow me on Instagram @CheesetteCowan for daily real estate business wisdom and the occasional dad joke (because who says business has to be boring?).
