At an event last week I asked a group of agents if they ran a monthly profit and loss statement. I was greeted by silence and blank stares as everyone shook their head. If I had asked them whether they were making money every month, only some would know.
Now this is something that really worries me about most agents. It seems like most agents haven't even heard of a profit and loss statement, never mind seen one. When you got your license or got initial training from your real estate company, were you trained on how to run one? I didn't think so.
If you don't run a profit and loss statement each month (a "P&L"), you simply are not being a good business person. By ignoring this simple report, you can go bankrupt in the next year.
Why Run A Profit and Loss
The simple is that a profit and loss statement shows you the numbers so you know if you are making money. If it shows that you're not making money, then you need to to know that so you can adjust. If you are making money, that's great, but you can always improve.
Going a little further, a P&L will show your monthly expenses so you can work on reducing or eliminating some of them (of course you need to know what your expenses are each month).
A P&L will show you how much it costs for you to work with a client. I'll go into more detail on the formula for calculating how much it costs in a later blog post, but if you don't have a P&L you won't be able to calculate whether your not you are spending your time wisely.
For more on this formula you can watch the video below at your convenience...
What To Do If You Don't Have One
If you don't have a P&L...get one!! Without it you won't understand your expenses or whether or not your are profitable.
If you don't know whether you are profitable, you probably are not, which means if you continue on that path you will go bankrupt.
I know some agents who were selling over 200 homes a year. They were also losing $225,000 a year. They didn't even know because they were not running a P&L. They were not being good business people.
An easy way to learn how to run a P&L every month and to BECOME PROFITABLE is to speak with one of our coaches for FREE.
Sign up to talk to coach who knows what it takes for you to become profitable by acting like a smart business person by clicking here ----> Schedule My Free, No Obligation Call
Please take advantage of this so you can proudly answer "yes" the next time I ask you if you have a P&L.
Dedicated to your success,