Mind your Money

I have always been notoriously cheap in managing my business expenses. I guess it’s not really cheap, it’s mindful. You can ask any of my former staff, they will happily tell you. For example, I wouldn’t buy the expensive roller ball pens for them. It was the cheap BiC stick pens they used because they achieved the same goal and we went through a million of them.  We did a lot of potlucks instead of elaborately catered events. We timed our agent certification training for off meal hours so we could feed the agents Costco snacks instead of lunch. We always tried to use free facilities instead of expensive hotels. It was all by design. By saving in areas like that, I  could splurge in other areas that were more meaningful and brought greater return. If you think I was miserly before, now that it actually is my own company, I have reached new levels of penny pinching!

I always spent money at my company like it was my own. I would stop and think “it this were my company, would I be ok with this expense?” Because of that, I ran very profitable departments. Every one of them making a large profit every year. If something didn’t  make money, we retooled it or got rid of it. It may have taken several years to get to profitability, but it always did. The one exception was our Concierge program, it  was not designed to be profitable, but it covered it’s own expense and at least broke even year and often did show a profit. It’s value was measured in other ways.

I am always shocked when Relocation Directors tell me that they don’t see their financials or they don’t have a specific profit and loss statement for the business lines they manage. I am not sure where the benefit to the broker is in that. If the leader is not paying attention to expenses and revenue of something they manage, how can they be motivated to continue to improve it?

The broker may think we shouldn’t be bothered with or may not understand the financials. If there is another reason, then it is time to find out why. If we are responsible for it, we should see the financials because whether we like it or not, we are being  judged by them. If we don’t know them, we can’t defend them or honor them. If you aren’t a numbers person, worry not, every company has a CFO or Controller who will happily explain it. It’s nothing to be scared of. I can’t tell you how many times an expense had been incorrectly applied to my financials and no one else would have taken the time to review it in such detail and catch the mistake. 

Even if we run as a service center and not a profit center, we still need to do what we can to control costs and improve our return on investment (ROI). By seeing our financials and submitting an annual budget, we can remind our broker when we save money or improve revenue. It lends some comforting  predictability to our efforts. Running reports from our tracking  software is not the same as reviewing our financials. Tracking software can be fraught with human error and it only tells part of the story.

So step up and request to view your profit and loss statement monthly. It allows you to feel ownership and tells a complete story of your work and its influence on your company.

“A budget is telling your money where to go instead of wondering where it went.” ~ John C. Maxwell, Author and Speaker