Wendy Papasan of the Papasan Properties Group, says increasing profitability can be as simple as managing expenses and picking a specialty.
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Wendy Papasan, founder of the Papasan Properties Group and cohost of the Empire Builder podcast, revealed five key ways agents can boost their profitability during an Inman Connect session Wednesday entitled, “Top Tips and Tricks for Boosting Your Profitability.”
1. Know the numbers
Agents should look at profit and loss statements for both their business and personal expenses, Papasan advised.
“I started out as a stay-at-home mom making, basically, no income,” she said. “Within five years my business was making a million dollars in revenue. And when you grow that quickly, I can tell you, you often don’t know your numbers.”
To get a grip on the money that was coming in and going out, Papasan hired a bookkeeper who helped her create a profit and loss statement.
“A profit and loss statement is something you need to look at every single month,” she said.
2. Operate off of 50 percent of every commission check
The reason saving 50 percent of each commission check is important, Papasan explained, is because agents need to make sure they have enough money to pay their taxes.
“I’ve seen so many agents literally go broke because they didn’t pay their taxes,” she continued.
To be safe, 50 percent of every commission check should be put away. Any extra money from what was set aside, she added, should be invested back into the agent’s business.
3. Manage expenses
“Don’t get me wrong, generating revenue is important, but managing expenses is more important,” Papasan said.
One way she does this is by going over her quarterly bank and credit card statements with her Operations Director.
“We literally go through every single line, expense by expense, so I really understand what I’m spending my money on,” she said.
4. Raise the sales price
Agents can raise their sales price, Papasan explained, by making sure their marketing reflects the price range they want to serve.
“If you can even raise your sales price by $50,000, it would dramatically affect your bottom line,”she said.
5. The riches are in the niches
An agent shouldn’t stretch themselves too thin. Find a specialty and become an expert at it.
That specialty, Papasan explained, could be anything from prospecting for expired listings to working with a certain age group.
“I see a lot of new agents who go out there and they try a lot of lead generation techniques and basically become the master of none,” she said.