Are You Running aNon-Profit Organization?Jonathan D. Nicholas, AECSVirtual CEO, The Company CEO, Inc.Toll Free: 847-881-6535
Non-Profit Organization?• Is it all about the agents, not the bottom line?• Handouts & Subsidies are daily occurrences?• A...
Famous Last Words… “I can match any compensation plan that any  of my competitors could ever throw at us!”
Famous Last Words… “Recruiting more agents into the company will  solve my profitability issues!”
Famous Last Words… “The brokerage doesn’t need to make a profit  if the ancillary services are subsidizing!”
Famous Last Words…“No need for me to pour over the numbers; my accountant will alert me if there’s an issue!”
Famous Last Words…“A good manager will increase productivity, performance and profitability – so we shouldn’t hesitate bri...
Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense               % of GCI 4-5%
Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed             % of G...
Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrati...
Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrati...
Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrati...
Talk About the Numbers & Indicators• Big Picture• Per Associate:  – Breakeven  – Revenue  – Productivity  – Expense  – % p...
Talk About the Numbers & Indicators• Net Retained %• Revenue per square foot• Days of Cash• Uncovered Expenses• Market Sha...
Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack
Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized
Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized# 3 High V...
Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized# 3 High V...
Common Pass Through Costs• Training• Technology• Communications• Postage/Courier• Advertising• Dues, E&O, MLS, Misc Fees• ...
Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized# 3 High V...
The Gold Standard• Set Up a Financial Management System  – Back Office Accounting & Software  – Financial Consultant  – Re...
The Gold Standard• Implement Performance Strategies  – Minimum Standards  – Individual Performance Plans  – Re-introduce N...
The Gold Standard• Pursue the Elusive 6+% Profitability  – Keep your Eye on the Goal  – Amongst Profitable, 2% is Average ...
Questions & Answers
Are You Running A Non Profit Organization - Century 21 Leadership Conference
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Are You Running A Non Profit Organization - Century 21 Leadership Conference

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Power Point presentation from recent breakout session at the 2009 Century 21 Leadership Conference held at the Atlantis Resort on Paradise Island, Bahamas.

Jonathan D. Nicholas, Virtual CEO, was the session presenter.

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

  1. 1. Are You Running aNon-Profit Organization?Jonathan D. Nicholas, AECSVirtual CEO, The Company CEO, Inc.Toll Free: 847-881-6535
  2. 2. 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?
  3. 3. Famous Last Words… “I can match any compensation plan that any of my competitors could ever throw at us!”
  4. 4. Famous Last Words… “Recruiting more agents into the company will solve my profitability issues!”
  5. 5. Famous Last Words… “The brokerage doesn’t need to make a profit if the ancillary services are subsidizing!”
  6. 6. Famous Last Words…“No need for me to pour over the numbers; my accountant will alert me if there’s an issue!”
  7. 7. Famous Last Words…“A good manager will increase productivity, performance and profitability – so we shouldn’t hesitate bringing another one on!”
  8. 8. Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense % of GCI 4-5%
  9. 9. Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed % of GCI 8-9%
  10. 10. Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrative Watchdog
  11. 11. Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrative Watchdog# 7 Failing to know your numbers
  12. 12. Top Ten Profitability Pitfalls to Avoid# 10 Premium Facilities – Premium Expense# 9 Too Heavily Staffed# 8 No Administrative Watchdog# 7 Failing to know your numbers# 6 Lack of budget, goals, and benchmarks
  13. 13. Talk About the Numbers & Indicators• Big Picture• Per Associate: – Breakeven – Revenue – Productivity – Expense – % per Side
  14. 14. Talk About the Numbers & Indicators• Net Retained %• Revenue per square foot• Days of Cash• Uncovered Expenses• Market Share & Agent Share• Churn Rate• Performance Strategies
  15. 15. Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack
  16. 16. Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized
  17. 17. Top Ten Profitability Pitfalls to Avoid# 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
  18. 18. Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized# 3 High Variable Cost – What’s True Cost?# 2 Failing to Pass Through All Expenses
  19. 19. Common Pass Through Costs• Training• Technology• Communications• Postage/Courier• Advertising• Dues, E&O, MLS, Misc Fees• Pass Through or Charge Flat Fee
  20. 20. Top Ten Profitability Pitfalls to Avoid# 5 Budget Line Items Out of Whack# 4 Compensation Plan is not Customized# 3 High Variable Cost – What’s True Cost?# 2 Failing to Pass Through All Expenses# 1 Company Services are not Profit Centers
  21. 21. 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
  22. 22. The Gold Standard• Implement Performance Strategies – Minimum Standards – Individual Performance Plans – Re-introduce Non-Performers to Market – Recruit Volume/Production not Agents
  23. 23. 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
  24. 24. Questions & Answers

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