01 Nov 2018
10:00 am - 2:00 pm
Real Estate Academy Amphitheatre
Real Estate Academy
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Paul Siderovski can handle the truth about running a business.
Everyday around Australia, founder and managing director of SiDCOR Chartered Accountants, Paul sees small business owners regularly use money set aside for GST and payroll as their personal bank. He says, “It's not just real estate agent businesses, it's truly 80 per cent of small business owners around the country. They use them as a bank and they don't even know they are.”
Paul says, “The best way to manage the GST and wages tax and then actual tax is to work out an amount from every commission that comes in. Set a break-even point in the cost of your business and then work out how much to put away.”
In this session, Paul advises putting the money aside in a separate account. He says, “Don't get in there and start dipping because once you fall back, it's very hard to make back.”
The way to prevent falling into trouble of course is to plan and develop a budget.
Paul suggests, “Take the proactive approach of doing a plan. Budget in advance going, ‘Here's what we're going to do over the next six to twelve months. What does it mean? What are the costs going to be of this business?’ If you've got that plan, things won't sneak up. That's the point of difference you can have to most other real estate business owners and other small to medium business owners around the country. Just do that budget and plan.”
To turn your business around, Paul suggests developing a plan. The first stage of the planning process is to be really rigorous about every expense for three months and to question every spend. Most of us are complacent - we’re too busy to question the phone bill or electricity provider. He says, “For the next three months, 90 days, every bill that comes into the office, every bill, I want you to question it. From electricity to telephone to ... I don't care what it is, just 90 days and you go, ‘Can we do better than what they're providing us now?’ I promise you, if you ask the question for the next 90 days, you'll put 20% to your bottom line, profit, and just it hits the bottom line.”
Marketing is one area, for example where it is easy to blow a lot of money without monitoring the impact of the spend. Having beautiful brochures makes you feel good but does it provide a return on the investment? Paul is adamant that marketing spending must be considered within the context of the whole budget and plan for the business.
He says, “Marketing is probably the largest expense that I see blow out and it's the first expense that I look at and when I ask a client the question, ‘How did you measure the marketing to the reward you got?’, they don't ever measure. They’ve assessed its impact on their own feeling. They didn't do a part of the business plan. For me, it's wise to have set contexts. Many clients are just content going, ‘Oh so all this looks really good. I'm just going to copy it’. In light of what? What was the plan? Was it a part of a three-month plan to get market share or was it to get an actual listing?”
Once you have monitored spending and developed a business plan, Paul suggests having a few meetings to measure progress then check in every quarter. Of course, you must have someone in the business who can do that, who you actually listen to. Paul says, “You've got to have someone in that accounts area who is actually checking the budget and going, ‘We budgeted this, we have already spent this’. You've got someone to have your back on that.”
Paul believes that every business in fact needs someone who is not afraid of the truth. He says, “You need a big thinker who's actually pulling the reins in to go, ‘Hang on, hang on’. That's what I love with real estate businesses who have a General Manager in place who is a thinker because think about sales agents - they're knowers and feelers. They know what they want. Oh they're feeling great, but we want someone who is a thinker and they think and go, ‘Hang on, hang on. How does this fit in with the plan?’. It's just one question.” A question which could determine if the business succeeds or fails.
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