This is very common mistake which Realtors® make on daily basis. Sometimes we fail to understand a basic calculation. Sorry I shouldn’t say fail to understand, I would rather say, we don’t even do that calculations. It could be just a matter of ignorance of facts.
Let’s have some eye opener today and ask a question to yourself. If given an option, would you choose 100% of 50,000 or 50% of 200,000? I think it’s very complicated to understand and I made you confused. You might be thinking why I said it’s very complicated to understand where as it’s a very simple calculations.
The simple reason that why this simple calculation is complicated because in this calculation our human nature comes in between. As it’s a common thought process that we are not much concerned about what we are making, our more concern is what others are taking. And this too we do without understanding the complexity of business.
Last time I wrote an article about the myth for 50/50 split and I clearly mentioned it’s not a split, it’s rather an expense sharing model.
Now let me throw a challenge for those Realtors® who are in business for almost 5 years or more. Please pick up your last 5 years income and do some simple calculations. Count all your expense which you have incurred to generate and complete that business. Please count advertisement , staging , sign boards , flyers , lock boxes , cash back , office split , office expense, manpower of your family , printing , stationary and so on . You will find you were left with almost 40% of what you have earned in total, 60% is your expenses. On top you have to make investment from your pocket for many things like staging, Sign Boards, ad and so on. Just imagine that someone has taken those troubles from you and have established an economy of scale model by negotiating the best deals based on volume and passing those benefits to you by bringing your cost down by another 10% and also taking the risk of spending money on his own. Isn’t it justifiable to have a 50/50 Expense sharing model. I can understand that there might be some exception of those people who are really not doing anything in terms of the ad or other expense. But did you ever realize that how much money you are losing by not earning up to your full potential in absence of proper mentorship.
I have come across hundreds of Realtors® who are successful but just working like Realtors® from last 5 to 10 years. They are making good money but did you ever think what will happen when you are not there. Their business is totally dependent upon their presence. If they are out, their business is zero. The agony of situation is they have no proper guidance to build a system in their so called big name brokerage. If their big name brokerages build a system for them, their own business model will fail. As their model is to hire more and more people, take out monthly fees, keep them under the false influence of their brand name which merely gets them any business.
It’s time to give a wakeup call and make some calculations. Stop seeing what gross you are making, calculate your expense and see what you are getting. But more important than that also see what is the future scope of building your system which should work for you in your absence. Just do a small
Experiment and leave your business for 1 month and see how much you can earn without your presence, you will realize what I am talking.
Friends, I have been in business for little more than a decade and understood the real challenges of the industry. I overcome those challenges for my people and build systems for them which keep working day and night without too much involvement. We have created success for many and our business model Fits all, either it’s a new Realtor® or someone who wants to build his team. Also for those who has high aspirations to become entrepreneurs and also for those who just want to incorporate for tax savings.
Think twice, if you have been in a system more than 5 years and don’t see any future growth, give it a thought and it might change your life.