THRIVING ON A COMMISSION INCOME

INSTRUCTOR SCRIPT

By Glenn M. Race, CRB, CRS, GRI

As a result of today's demonstration you will have a simple system to budget each commission check you receive in order to ease the financial strains-and build a solid foundation for financial freedom.

1.     JOHN MULLANE STORY - Back Taxes, 3 Mortgages, Heart Attack, $4 Million Producer, My Mentor.  THERE HAS GOT TO BE

2.     MY EXPERIENCE - Hundreds come/go.  Some real good ones have been lost by our industry.  Concerned, caring, professional agents who could have had great careers in R.E. - Quit.  Financial pressures, ups and downs of R.E. Sales.

3.     EVERY SALES BOOK WRITTEN - Says we must list properly, give excellent customer service, sell with integrity and empathy, and develop long term relationships to succeed.  We can't look at clients as a "$" sign or our next car payment.  We must focus on client needs and our selling skills, not on how big our commission is going to be.  BAD LUCK to figure our commission in the middle of a transaction.  The curse is on - We're focusing on our "$" needs not on the needs of the customer. Keep in mind-SERVICE BEFORE MONEY. If you provide superior service, the money will follow.

4.     WHO GOT PAID FRIDAY? WHO DIDN'T? HOW DO YOU FEEL?  When we are under financial pressure, no matter how big our smile, or how sharply we're dressed, our friends, family, co-workers and most importantly, our clients sense it.  You can't work smart.  Either you press too hard or don't prospect effectively.  You're distracted by the "Wolf at your door."  80/20 becoming 90/10

      It's getting expensive to be in real estate sales today.

There are some great benefits to a career in R.E.

(Ask Audience)  Time Freedom, Meet New People, Self Employed, Minimal Investment, Challenging....

WE CAN ENJOY THESE BENEFITS IF THE WOLF'S NOT AT OUR DOOR.

All Successful Enterprises have systems.  That's why they're successful.  Remember, each of us is a BUSINESS  within a BUSINESS.  We have to treat ourselves as a BUSINESS.  (Profit/Loss). ______________,inc.  We are like a Fortune 500 co.—profit motivated.

We need a system that's easy and non-complicated, after all, We Are Realtors!

IT ALL BEGINS WITH FORECASTING INCOME AND EXPENSES

Setting goals & following a business plan. It used to take 3-5 years to get rolling and develop a predictable income in real estate sales. Now, It really should happen in 1-3 years.

Experienced Agents - Past Few Years, This Year, Income Tax Returns, Monthly Log, Bookkeeper.

NEW AGENTS  - Ask your manager or fellow associates.

Expenses  - What are they?  (Audience) Page 2 in workbook.  Use last years income tax.  Ask fellow associates.

CONSERVATIVE IN PLANNING - We get enough surprises in our Business.

Business planning should be done in June and November. Don't wait till January.

THE SYSTEM

Needs:  Checking Account/Savings Account/LOC or Credit Card Line - "In-Betweens"

(Ask Audience)

Preferably, these should be separate accounts, (Business).  Now the accounts are set up.  Expenses are projected and budgeted.  Your income is forecasted, the checks are ready to roll in.

Budget 100% of EACH CHECK you receive.  Whether its a $1,000  Referral fee or a $4,000. Commission.  For this system to work, EACH CHECK must be ALLOCATED.  This is the rule set in stone!

Review;          Which checks?     How much of each check?     100%.

Sadly, many agents find their commissions are already spent before they come in.  This is where discipline comes into play.  This system is not always easy....but it's simple.

Credit line - pay it off quickly - the cancerous nature of revolving debt.

CATEGORIES     (Review Each)

1.     INCOME TAX:   Quarterly Tax Estimates and April 15^th.

2.     R.E. BUSINESS:   Pays The Expenses Of Our Business & Marketing (see page 2)

3.     INVESTMENT/NEST EGG:   Savings, Nest Egg, Investments, Emergencies, Sep/ IRA Retirement.

4.     PERSONAL:   Rent, Mortgage, Utilities, Clothes, etc.

This is the frame work for SUCCESSFUL BUDGETING.  Set up a "%" for each.

                        Generic Example:  Adjust your Budget for your personal needs.  Don't adjust too often - this program works through personal discipline and consistency.

The Allocations: 

                        TAXES..............................20%

                        R.E. BUSINESS...................15%

                        INVEST/NEST EGG...... ......15%     (Write these percentages down

                        PERSONAL........................50%      on page 4.)

SAMPLE CHECK COMES IN.........

            $3,600. (Do it on Board)        (Check TAB.  Mark it right on there)

            TAXES:             $720.00..................Savings Account

            R.E.:                     540.00..................Savings Account   (Break down into categories

            INV/NEST:          540.00..................Savings Account     in your savings account)            PERSONAL:     1800.00..................Checking Account

ANNUAL BASIS - Page 3.  DO EXAMPLES....

(Walk around - check students - do examples on the board.)

As you can see, on an annual basis, the amounts in each category are growing. 

When your quarterly income tax estimates are due, just pull the amount out of  your income tax account.  When your quarterly MLS dues come in - just pull that figure out of your account.  When you want to pay your Board dues - simply write a check.  What a "Great Feeling!"  That's being in control.  Less Stress - No Sweat.  How does that make you feel?

I've learned that People will do more to void pain, than to gain pleasure

.

All year long as you're making deposits you are drawing interest and building your savings.  The phenomenon of compounding takes place.  You are on the road to controlling your finances and your career.

Here's a WHAT IF?  What if at the end of the year you've accumulated a surplus in one or more of your categories?  What would you do?  (ASK GROUP FOR IDEAS)

How about taking a portion of these unspent dollars and treating yourself to a special personal gift as a reward for being such a disciplined, organized, successful individual?

The time to start this system is today - with the very next check you receive.  It's simple, it's proven, and it's effective.

If you will use this plan consistently.....(Pause)  That Old Wolf  Won't  even be able to find your door!