Let the Money Pile Up!

 

I think I have said I am not a big fan of rap.  Not hating...just not into it...   Sugar Hill Gang and "Rappers Delight" is about as far as I can go.  In fact, Ole School Saturday is this week - Natalie, put on your dancing shoes...just not the ones you can only wear 2 hours please!   I digress...   The kids would always try to convert me to rap.  One day they came to me, "You have to listen to this ....it's a positive rap song."   It was Kanye West (yes...I know!) and the song was called "The Good Life".  The lyric that got me...   50 told me, go 'head, switch the style up And if they hate then let 'em hate and watch the money pile up The good life    Profit - another way of saying "let the money pile up".  You have to have some left to put in that pile and if you recall, profit is what you have left after the transactions are complete.   Sure, that was too easy of a connection to my lesson.  The more subtle revelation I want you to see;   "go 'head...switch the style up"   If your business is not profitable, then it is probably time you make some changes.  Switch the style up!  In the 3 ingredients, the first thing to review was your margins...can you make money?  I have a basic concept I need you to adopt right now...no argument;   If you can't make money...stop doing it!   I am working with a several agents who came from environments where they couldn't make money.  They took lessor contracts...that is ok.  They paid for leads...also ok.  Where the hamster wheel revolved is that the formulas for getting to positive money (profit) were so in favor of the company, that the agents not only didn't make money...they owed money!   The first area of evaluation for margin is revenue.  Top line money.  For the typical small business, there are two main things that generate revenue;   Products & Partnerships   Products are basic.  They are the widget you make and the widget you sell.  If you are selling a product or service that you make and deliver yourself, you have to be mindful of costs of production and delivery.  That is the foundation of your margin and profit potential.   Most of you are brokers...right?  You don't produce the product, but you contract with companies to distribute their products...like insurance. Partnerships are ususally formed when someone is closer to the company and has a "master" contract and then contracts downstream to the individual producers.  Your contract will spell out how much you make for selling, servicing and renewing that product.    No matter how you are aligned you have to be in a position to sell effectively and generate revenue.    Do you have 10 contracts to sell but only sell 2?  What about the other 8?   Can you learn and cross-sell those products to increase revenue?  If the answer is yes...switch your style up and engage them in your portfolio!   The next area of evaluation for margin are expenses.  What does it cost you to deliver the product to the consumer?  The computer, the printer, the gas in the car...it all adds up to subtract from your revenue.   Brandon, what advice would you give a business that is "bleeding"?   For 30 days...watch every penny (I didn't mean dollar...penny!) coming in.  Evaluate - watch how you make it, what products you sell and where your clients come from.  Get top line revenue focused for 30 days with a simple eye toward increasing it...say 10% in that 30 days.   With focus, I know you can do it... Trust me, you are missing opportunities because you are not looking for them!   The next 30 days, watch every penny going out...reduce it by 10%. (read the 2 lines above again!)   At the end of 60 days, you will have increased your margins by 20% (technically infinity but I won't take you there!).  You will have more left than you spent...it will feel like the good life.   You might even rap a verse from Kanye...    Let the Money Pile Up!   Until tomorrow, I wish you Money, Power, Success!