One of the concepts that I have been preaching for the last couple of years is knowing exactly what your value or profit per hour is. Having the answer and building strategy around it is essential for agents at all production levels.
Value (or Profit) per Hour = Your Gross Commission Earned over a period of time/hours worked.
This simple calculation tells you the amount of money that you make from each hour of effort you put in. Since you’re not punching the clock, you’ve got to do the calculation yourself and be honest with yourself about the number of hours you do (or don’t) work.
The average agent who has a mature business works at least 2,600 hours per year. The average salaried employee works about 2,200 hours.
I’ve found that I have to really push this concept when an agent starts verbalizing that they just don’t have enough time to live their life. What’s the solution? I have that agent take an inventory of all of the things that they are doing that can be outsourced for less than their value or profit per hour.
Normally, the list is long. So I challenge that agent to hire others that can take some of these things off of their plate. What might that include?
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- Personal Assistant
- Showing Agent
- House Manager at home
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Whether you are a new agent or have a mature, high-performing business, you have to stay focused on lead generation and relationship management. It’s where you earn the most for the time you spend.
Once you’ve committed to outsourcing tasks that don’t meet the threshold of your per hour value, you can spend more time on what is important:
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- Initial Consultations
- Listing Presentations
- Negotiating Contracts
- Second Showings
- Networking Lunches and Dinners
- Prospecting
- Contacting Past Clients
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These are your revenue generating activities.
Calculating your value or profit per hour helps different types of agents at all production levels.
If you are new to the business and not making a lot of money, you can be valuable help and learn valuable lessons from a top agent that needs to outsource some tasks.
If you want to really limit the number of hours you work, you can refer out leads that are non-essential to your business (e.g. below a certain price point or not a key client).
…and of course, for the agents where your business to-do list is growing beyond your individual capacity, your first step is to hire a personal assistant.
Understand your reality and don’t be afraid to do what you need to do to live your life the way you want to live it.
