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Article Takeaways 

• Focus on activities that generate the most leads 
• Cultivate past clients and your network for referrals 
• Cut costs on marketing, supplies, and commuting
• Know your clients wants and needs 

The first step to earning more is understanding your hourly earnings after taxes. Do this by dividing your net income by the number of hours worked per year. For example, a 40-hour week, 50 weeks a year is 2,000 hours. 

Once you know you’re per-hour earnings, it’s easy to calculate the cost of doing business and your return on investment. 

Next, we’ll explore some ways to put that number to work. 

Assess which activities generate the most leads 

Let’s say you netted $50,000 last year. Based on a 40-hour week, that means you’re earning about $25 an hour. Every minute you spend trying to generate income for your business should be measured by this rate. 

So, if you spent four hours doing cold calls this week, you racked up an “opportunity cost” of $100. Did it generate any leads? Great! It was productive. If not, then it was nonproductive, and you should evaluate if the activity is worth continuing. Knowing your hourly rate helps you easily determine the return on investment of any activity.  

Go through your activities one by one and determine if those opportunity costs bring in leads. You’ll soon get a clear picture of what works best for you. Whether it’s open houses, social media, emails, or working your network for referrals, pick the winners and invest your time there. 

The most reliable source of new business is from old clients you successfully served. Develop a well-managed CRM and regularly keep in touch. Those satisfied customers can provide one of the most powerful—and low cost—forms of marketing when they recommend you to friends and loved ones. 

Don’t overlook the people in your sphere of influence, from friends and neighbors to former colleagues from your life before real estate. They are all good-will emissaries who can connect you with people who want to buy or sell a home. 

Learn, plan, and experiment 

Markets change. Buying and selling patterns shift. Modes of communication evolve. Keep a close eye on all of it and always be willing to try new ideas, processes, and technologies. Budget at least 1 – 5% of your gross revenues for educating yourself, creating a strategic plan, and tactically implementing your innovations. Some things you try will hit the mark, others will fizzle and fade. But to reap the rewards, you’ve got to keep it fresh and stay in the game. It’s also important to carve out time each month for experimenting – perhaps it’s a half day every other month.  

Facebook ads, billboards, radio spots, and direct-mail blitzes. It’s easy to run your marketing budget into the stratosphere. But costs can quickly outrun benefits. That’s why it’s best to reign in marketing spend to no more than 10% of gross revenue. And remember, low-cost tools like social media, emails, videos, and Zoom calls can be just as—if not more—effective than that high-price-tag lead-generation software you’ve been eyeing. Real estate is all about people. The more personal you make your connections, the bigger an impact you’ll make. 

Why buy one pack of pens when they’re so much cheaper by the case? Same goes for all your other office and marketing supplies, everything from reams of paper to door hangers and postcards. Track your consumption patterns and project what you’ll need over the next six months to a year. Then head over to Sam’s Club, Costco or other discount store and stock up. Not only will you save on per-unit costs, you can eliminate wasteful shopping trips. 

Ever since Henry Ford rolled out the Model T, we Americans have been driving everywhere for everything. By forcing us off the open road, the pandemic opened our minds to a whole new way of living and doing business. Much of what we thought required a car can be done with a keyboard and a mouse. By working from home as much as possible, you’ll save precious hours of commute time, and a whole lot of wear and tear. 

Even in a competitive seller’s market, homes move faster when they’re priced in the “sweet spot.” Keep close tabs on your local market and set prices that reflect it. You’ll spend less time, effort and cash promoting them, and reach the closing table much faster. 

That young couple you’re serving needs a four-bedroom near good schools for their growing family. But they want a charming Victorian with a big bay window and a flowering orchard in the backyard. Knowing the difference between needs and wants will make the road to offer and closing much faster and smoother for all concerned. 

Invest some time upfront exploring all the items your clients must have for a purchase to go forward. Knowing what they want—or would like to have—is important, too, and will help narrow the list of prospects closer to your clients’ ideal home. 

Your clients are the best arbiters of your performance, and most valuable source of insights for improving your professionalism and service. Be sure to check in with them through every step of the transaction, from signing the representation contract to closing and beyond. Doing so will reveal any potential problems, letting you quickly and efficiently nip them in the bud. 

After closing, survey them about what you could have done better. Not only will this provide actionable intel for your career, it will also reinforce your clients’ loyalty and trust. You can even use some of their testimonials in your marketing efforts (with their permission of course). And that is the foundation for the kind of long-term relationships that spawn referrals and increase profits for years to come. 

Learn more about this topic by reading Inman’s 10 Strategies for Being More Profitable in 2021.