Are You Running A Non Profit Organization - Century 21 Leadership Conference

Are You Running a
Non-Profit Organization?
Jonathan D. Nicholas, AECS, CRB, CRS, GRI
Virtual CEO, The Company CEO, Inc.
jonathan@TheCompanyCEO.com
Toll Free: 888-800-8991

Non-Profit Organization?
Is it all about the agents, not the bottom line?
Handouts & Subsidies are daily occurrences?
Are we really “broke-er” than everyone else?

Famous Last Words…
“I can match any compensation plan that any of my competitors could ever throw at us!”

“Recruiting more agents into the company will solve my profitability issues!”

“The brokerage doesn’t need to make a profit if the ancillary services are subsidizing!”

“No need for me to pour over the numbers; my accountant will alert me if there’s an issue!”

“A good manager will increase productivity, performance and profitability – so we shouldn’t hesitate bringing another one on!”

Top Ten Profitability Pitfalls to Avoid
# 10 Premium Facilities – Premium Expense
% of GCI 4-5%

# 9 Too Heavily Staffed
% of GCI 8-9%

# 8 No Administrative Watchdog

# 7 Failing to know your numbers

# 7 Failing to know your numbers
# 6 Lack of budget, goals, and benchmarks

Talk About the Numbers & Indicators
Big Picture
Per Associate:
Breakeven
Revenue
Productivity
Expense
% per Side

Talk About the Numbers & Indicators
Net Retained %
Revenue per square foot
Days of Cash
Uncovered Expenses
Market Share & Agent Share
Churn Rate
Performance Strategies

# 5 Budget Line Items Out of Whack

# 4 Compensation Plan is not Customized

# 3 High Variable Cost – What’s True Cost?
Fixed/Assoc – Variable = True Cost

# 2 Failing to Pass Through All Expenses

Training
Technology
Communications
Postage/Courier
Advertising
Dues, E&O, MLS, Misc Fees
Pass Through or Charge Flat Fee
Common Pass Through Costs

# 2 Failing to Pass Through All Expenses
# 1 Company Services are not Profit Centers

The Gold Standard
Set Up a Financial Management System
Back Office Accounting & Software
Financial Consultant
Review Executive Reports Monthly
Watch Dashboard Indicators Weekly
Know Cash Position Daily
Budget/Goals

The Gold Standard
Implement Performance Strategies
Minimum Standards
Individual Performance Plans
Re-introduce Non-Performers to Market
Recruit Volume/Production not Agents

The Gold Standard
Pursue the Elusive 6+% Profitability
Keep your Eye on the Goal
Amongst Profitable, 2% is Average
Compensation Plan is Key to Success

Questions & Answers