How to tighten your team’s belt right now

The coronavirus has already significantly affected the economy, and chances are, it’ll have an impact on your team, too. Here are a few things you can do to get your financial commitments in shape, adapt your team and soften the blow

Change isn’t easy. In fact, sometimes it can be downright unpleasant.  However, in uncertain times like these, more than ever you’ve got to be willing to be a leader and accepting of change.  Especially when it comes to your team’s financial commitments.

Tim Ferriss wrote in his best-selling book The Four Hour Work Week, that “Many a false step was made by standing still.” and I have to tell you I know this to be true.  Especially in times like we’re experiencing right now. 

The past decade or so has been good to so many in our industry.  And if you look back at most of the podcasts, classes, coaching programs,  talks etc… in the industry It’s been all about growth, selling more homes, hiring more agents, more more more. I get it. We’re a part of it all. But the reality is there some serious financial stress going on behind the scenes for so many. Maybe even for you, too.  And if you don’t act now, there might not be a tomorrow for your business.   So here are my 3 steps for tightening your team’s belt right now! 

Step 1 – Know what to cut and take immediate action. 

I know it’s easy to overspend. Especially when times are good. But do this little exercise this week.  Take account of all business expenses over the last 180 days. I mean, every single expense. Hopefully, you run all of your business expenses through a business account and this is easily accessible. In my business, my business partner and I log into our business bank and credit card accounts and literally review every dollar that went out the door the previous week. Notice I didn’t say get out your P&L statement, I want to see the line items for each expense.  We ask ourselves, is this out of the ordinary? Is this a one time charge? Could we live without it? Would production go down if we didn’t have this? And so on.

I was talking to a friend of mine, Leo Pareja a few days ago. Leo, who is not only the former number one kW agent in the world but is also the co-founder and  CEO of Remine, is no stranger to recessions. He’s also no stranger to making tough choices. His advice to me (and all agents around the world was simply, “Figure out what you need to cut. Then cut fast and Cut Deep.”  Now let’s get out the marker and look for fat to trim. 

Step 2  – Consider going virtual. 

Often times a real estate team spends a lot of money on physical space. Especially in up markets, and when the team is growing in size, it’s easy to justify more office space than is needed.  But let’s get real for a moment. Do we really need all that space? Does everyone on the team need a desk? My gut and my experience tell me the answer to that question is no. If you’re subleasing from your broker, it’s likely that you can get out of your lease with 30 days or less notice. My suggestion is to give it a try. With so many tools out there like Zoom for video conferencing, Slack for messaging, Facebook Workplace and so many other tools, there is no reason to take up so much space in an office. 

Step 3.  People.

Time to have the talk with your people. When I say your people, I mean the people employed by you both via w2 and the agents who aren’t technically employed by you. 

Its time to get more from what you have.  I suggest you sit down with your team. Be honest and open with them (by the way, I suggest doing this in good times and tough times) and tell them what is going on.  Don’t leave it to them to guess. Make sure they know where the business stands and where they stand. If you have team members who aren’t clear on what their job is, what the mission is, now is the time to get crystal clear.  If someone isn’t pulling their weight, the time for them fix that or go elsewhere is now. You can not afford to have too much staff on payroll or have independent contracts/agents who aren’t giving their full effort. 

I was reading a blog post from my friend Brandon Green the other day and something he wrote stuck out to me and I really resonated with it. He wrote, “ Entrepreneurs who are moving quickly right now to lead by right-sizing expenses, adjusting their model, changing their offerings will be rewarded and take serious market share in 2021 and beyond.”

I know times are hard right now, but you have to know this is actually an opportunity for you. It most likely doesn’t feel that way, but it is. If you can and do take these steps and then take these same steps again and again, what you’ll find is that you are capable of so much more than you ever realized.

You’ll look back and realize not only did you survive the tough times, and trust me, the tough times are coming, but you’ll realize you have a much more secure and stable businesses, with more market share than you ever knew possible. And here is the kicker, it is actually these tough times that make that possible, it just isn’t pleasant in the interim.