We love the holidays and the season of gifts, getting together with family and friends and frankly just kicking back. But as you un-plug for a few weeks this is a great time to think about the new year and making positive changes for your business. Here’s our top tips for changes you can make to start the new year off on the right foot.
Utilize Technology To Automate
Find your self doing the same tasks over and over again? Look into automating those with tools like Zapier and others. I’m not saying to take the human out of where it counts, but updating email lists etc.
Setup A Budget
Creating a budget is the first step in planning to make sure you meet goals. Setting up thresholds and goals will help you measure your progress throughout the year. It can even be easily done in your accounting softwar like Xero or QuickBooks Online.
Beyond tracking the income and expenses, it forces you to think about what you plan to do and set goals. That act is alone is a lot more than what a lot of business owners
Implement Some Tax Planning
Now, you have probably heard lots about taxes this past year and rightfully so, 2018 has seen some of the most extensive tax reform laws in decades! Knowing why they mean and translate for you in your business is no small feat but that doesn’t mean you should keep your head in the sand. Planning now can save you tons of tax if you play your cards right. For example, IRS section 199 outlines hefty tax savings for small business owners under a certain income threshold. This translates into huge tax savings for a lot of businesses.
Fortunately for you, if you’re reading this blog you’re in the right place to get help if you don’t understand or know how to apply it to you. There are also tons more opportunities to save tax so it may be worth your while to schedule some time with your tax planning expert. Or, give us a call if you don’t have one.
Get Your Books In Order
I call ‘net income’ the magic tax number because it’s what drives most of the tax liability when you operate a business. But you’re never going to know what that is unless you keep good records of your income and expenses. Let’s face the hard truth, the days of paper and spreadsheets for tracking this should be over. Online accounting software like Xero is so easy to use and so cheap that it’s a no-brainer. Plus, using something like Xero is a great way to get ALL of your business on one place for invoicing, bills, document storage, etc.
Level Your Business Up
During this time when you’re taking some time off or away from the desk think about waysin you can make small changes to improve the quality of life. Think in terms of plenty and ditch the scarcity mindset. When you do you’ll see big changes at how you handle stress and how you visualize success. For example take implementing a CRM like Active Campaign or Hubspot costs a monthly fee, but did you think about how much time you can save with automation and how you can better serve your customers by having a system in place to put them in?
When you’re able to spend a little you make big gains in your mentality for growth. Remember, unless you invest and work on your business there is huge rewards.
In closing I hope you’re able to use some or all of these points to have successful new year going into 2019! Don’t forget, growing your business is like steering a large ship, you do it with small course corrections and in time you will get where you want to go!Read More
Guess what? We’ve been busy since tax season ended making things more efficient so we can better serve our clients. We’ve upgraded our practice management to Karbon. Karbon allows us to do a number of things we couldn’t do before, but what we’re really excited about is how it allows us to communicate with our clients more efficiently.
In the coming months, you may see us ask you questions or for statements through Karbon. They will come to you in an email as “Client Tasks”. To demonstrate how this works I’ve made a quick tutorial on how this works.
We’re looking forward to working with you in this new system that we’re sure will make things easier in getting us information. Please leave a comment or shoot us a message if you have any questions!Read More
Whether you’re just starting your journey in real estate or a seasoned veteran, you’ll want to continue reading for some valuable tips to help you control your money and not let your money control you!
Planning around commissions
Its feast or famine for a lot of agents starting out. Or, if you’ve been around for awhile and have a steady pipeline of listings then your income may be more steady. Either way, you need to plan and budget around your commissions.
One of the best ways we’ve helped agents do this is by following the 80/20 rule. The rule is simple: take 20% right off the top of your commissions and use the rest for business expenses and to pay yourself. If you save 20% of your income then you’ll have a decent chunk set aside for taxes and anything unexpected that comes up. Just remember, taxes can be the #1 expense for the real estate professional so do some planning ahead of time.
Taxes can be the #1 expense for the real estate professional so do some planning ahead of time!
The next step in the process is to follow a 3-month rolling budget. We know the commissions don’t happen every month when you’re first starting out. And some months you may be “feasting” while others are a “famine”. But over the course of 3 months, you should be able to have a good idea of what your income and expenses are. Setting up a budget can be as simple as using a spreadsheet, or our preferred method is to use easy to use financial software like Xero.
Check out how easy it is to setup and use a budget in Xero:
Following Up and Being Held Accountable
Following a budget means nothing if you don’t ever review it! If you’re going to be successful at controlling your money then you have to review and look at your actual and budgeted income and expenses. We’ve seen professionals be the most successful at this when they have an outside person holding them accountable to their plan. Or, if you don’t want someone else helping, you should calendar a time and place (preferable somewhere different from where you normally work!) and stick to your budget review appointment. Remember, if you don’t treat it like a normal business meeting, it probably won’t happen! We like to mix food and drink in this meeting–that seems to always make something that can be grueling a bit more exciting.
There’s no time like the present
Decide to take control now by following these simple steps:
- Gather your bank statements for the past 3 months so you can see how much you made and spent
- Tally up all your income, and then expenses into categories or “buckets” so you know where your money was spent
- Setup a spreadsheet or budget in finance software. Set realistic goals in your budget so that you can acheive your budget goals.
- Record your business income and expenses from setting up your budget and see how you did for the past 3 months.
- Record your income and expenses often and review every 3 months. Setup a calendar event and stick to your meeting.
- Adjust your budget as necessary for changing costs like advertising, staging, open houses, etc.
If you follow those steps then you’re well on your way to being in control of your finances.
We’ve worked with many real estate professionals so we know what works, and what doesn’t. Feel free to reach out, we’re happy to answer simple questions and be a resource for you. Here’s to your financial freedom and listing lots of properties!Read More