The name of this article reminds me of a successful quote by Benjamin Franklin.
“Beware of little expenses. A small leak will sink a great ship.”
The hidden meaning of this quote is very deep. It clearly states that taking care of several small expenses will help you to prevent a big expense.
Little expense + little expense = Big expense.
It is this big expense prevention that helps generate better revenues for your real estate business.
We are all aware that it’s not easy to run a successful venture. There are many factors that contribute to the success of a business whether it is manufacturing, real estate, or any commercial business. A few common theories include an increase in customer awareness by advertisements, promotions, and marketing of products, an increase in sales, excellent customer service, cost-cutting, etc., and the list goes on.
But the question is: why is cost-cutting or cutting down on expenses always at the bottom of the list? Most real estate business owners don’t realize the importance of curbing down on small expenses.
Real estate agents tend to wake up when these small compilations become big enough to affect business profits. This article focuses on those small but important cost-cutting expenses which go a long way in improving business gains.
Related: 10 Reasons Real Estate Agents Fail (and How to Avoid Failure in the Business)
17 Ways to Save Money in Your Real Estate Business:
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Place Bulk Orders:
Products purchased from wholesale vendors are more cost-friendly than retailers. Costs of single orders are always a bit higher than bulk orders. If your finances permit bulk orders, opt for those, since vendors tend to give discounts on these orders. You can also negotiate for more discounts and better prices, to increase revenues.
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Use Passive Solar Designs:
In passive solar designs, the natural energy of the sun is utilized for heating or cooling of buildings and workplaces. Even the installation of a solar water system can be used, which supplies you warm water on cold days. These solar systems reduce energy consumption, leading to a phenomenal decrease in total electric costs.
Even small measures like switching off the power for each workstation after your real estate team leaves, shutting down unessential overhead lights, passage lights, coolers, and air conditioners, etc. help save a huge electric bill.
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Go Green to Reduce Paper Consumption:
Prefer paperless billing/online billing as compared to physical copies. You can also opt for online real estate marketing by sending emails and using social media marketing to show off your services to homebuyers and sellers instead of printed brochures to save paper costs.
Alternatively, printing on both sides by default, usage of small readable fonts in printed forms, smaller margins, single line spacing, etc. will slowly help save paper usage.
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Support Telecommuting:
A workplace outside the real estate company premises (home, cafe, library, shop, private office or any other venue) selected by the employee for the company’s work is telecommuting. Here, the employee co-ordinates with his subordinates on mobile, telephone or emails. An increase in work productivity and a decrease in employee costs are its main advantages.
Related: 4 Secrets of a Successful Part-Time Real Estate Agent
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Purchase of Second-Hand Products:
It’s not always mandatory to buy new products required by the company. Many second-hand products with very little usage and in good condition are available in the market at nominal rates. Printers, laptops, delivery vans, company cars, furniture, etc. can be re-purchased. These used products come cheaper since sales tax is also excluded from purchase.
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Stop Recurring Subscriptions/Services:
Auto-stop recurring payments done from your bank or credit card account for subscriptions enrolled. Many times, it happens that you have forgotten certain subscriptions and are no longer interested. Check your bank and card statements monthly to stop unwanted recurring expenses. If you don’t need a service you have subscribed to, kindly cancel it. For example, any real estate business requires a lead generation service but if it does not produce leads, then it is of no use.
Alternatively, review your current subscriptions and real estate agent tools. Opt for all-in-one real estate tools that offer you multiple different services and functions for one subscription. One example is Mashboard. Learn more here.
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Save Software Expense:
Saving on software is an excellent money saver. There is ample free software available in the market.
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Save for Taxes:
There are many business owners who are in a tough financial position when tax payment needs to be done. Hence, it’s wise to keep aside monthly tax money for the final payment, so you don’t need to arrange for finances at the last moment. This will also help to avoid late payment fees and other tax penalties, thus saving funds.
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Invest in an SSL Certificate:
Cyber-attacks are a huge loss in the business world. Secure your real estate business website with an SSL (Secure Socket Layers) certificate to prevent it from cyber-criminals attacking your site, causing damages and financial losses. If you are running a real estate blog alongside your real estate business website where you post listings, each website needs an SSL certificate nowadays. SSL certificate encrypts all your business information, so hackers can’t read or access it; thus, saving your money from getting misused.
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Use Space Efficiently:
Though telecommuting is one way to use your office space wisely, also check out for wall space, and load it with shelves for folders and files. Flexible space with different departmental zones, minimum furniture, and dual-purpose common areas, will help you to utilize your space efficiently.
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Curb Employee Expenses:
Instead of limiting employees, it’s better to limit their expenses to save money. Unnecessary perks, free lunches, and free petrol allowances should have a fixed budget, so your hard-earned business money is not wasted. Reduction in health care costs of employees, with proper tie-ups with doctors and hospitals, will ensure they are healthy, and their illness is not reoccurred.
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Negotiate Rentals:
If you rent out your real estate business premises, then it’s wise to negotiate and discuss with your landlord about either extending the lease period or decreasing the rent amount by opting for a yearly contract.
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Minimize Meetings:
Though meetings are an important aspect of the business, ensure that only the most important people related to the meeting are present. Irrelevant employees attending a client meeting will hamper their work productivity and indirectly affect business. Opt for real estate team meetings in your business place, rather than other out of town destinations to save money.
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Recruit Interns/Freelancers:
It is not always necessary that your real estate company should be full of highly qualified people. Of course, I do admit, that there are certain positions that do demand employees with high qualifications, but there are certain other non-core tasks in your company, which can be done by recruiting interns or freelancers of the same field. They demand less pay than others for the same work, and hence it’s a boon in disguise.
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Outsource Work:
There may be certain tasks in your business, which can be given to an outsourcing agency. Analyze these tasks and assign the best budget-friendly agency to get your task done. This not only saves space in business premises but also saves employee costs (ranging from salary, perks, insurance, workspace, desktop, electricity).
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Reduce Maintenance Costs:
After keeping a close watch on the areas of maintenance, and their expenses, it is better if you can train your local repair personnel for certain maintenances, instead of calling standard company repair guys. This will help curb maintenance costs to a large extent. The practice of preventive maintenance by staff on a regular basis also helps save huge repair expenses, increasing the life of the equipment.
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Utilize Social Media for Job Posting:
Employees come and go, it’s a constant process. Your company will also need new recruitments when old ones leave. There are recruitment sites wherein you need to pay for posting a job. And later pay again once recruitment is made from that site. Cut down that expense by utilizing social media for a job posting. Survey shows that 69% of Americans use Facebook & 37% use Instagram.
Conclusion:
Negotiate everything– after all, you are a real estate agent! Keep track of maintenance costs and employee costs and limit them. Analyze your business to see where cost-cutting is needed and where expense needs to be made. Effectively handle these costs to grow your business and revenues. Best Wishes.
Related: How to Make Money as a Real Estate Agent: 5 Best Tips
This article has been contributed by Dan Radak.