A number of years ago, I was speaking to a high-powered group of agents in Houston, Texas.  I was sharing with them the seven key numbers in a real estate agent’s practice; the seven key numbers an agent must monitor, watch, evaluate, and, for most, change.  These seven numbers, because I controlled them well, enabled me to sell over 150 homes annually, while only working Monday through Thursday and taking Friday, Saturday, and Sunday off.  I didn’t answer the phone, fax, or e-mail on those days.  I was off with my family.  In fact, for most of those days, I was a three-hour drive away at my vacation home.  It allowed me to build a business of high net profit where I netted well over 60% of the gross revenue I created each year.  You don’t need to gross $2,400,000 in revenue to net over a million dollars in profit, as some experts will try to convince you.  A Champion will cast an evaluated eye to that model.

While I was coaching this group of agents about these seven key numbers, I was sharing with them that most agents have no idea about these numbers.  This is also true for lead agents who are either working to build large teams or already have large teams.  They also have these seven numbers way out of alignment.  The reality is they are so out of alignment that the net profit is poor.  This is especially true for many agents in the “superstar” status in real estate.  They achieve such large gross incomes but low net profit numbers that they often live, spend, and have a lifestyle as if their gross income was their net income.

I was on a “superstar” panel in the 90s where a prominent agent (one of the first to break the million dollar a year gross commission income barrier), who is now a speaker, admitted (after getting off the stage and getting real) that he was broke.  He had nothing to show for his million dollar gross income he earned that year.  I can assure you, he wasn’t projecting the image of being broke on the stage.

As I shared these concepts and stories in Houston that day, a beautiful blonde lady in back stood up.  She was the “perfect Realtor”.  You can easily picture her clean, professional suit and diamonds just dripping off her fingers, wrist, and neck.  She had the brooch as well as the hat.  She graciously raised her hand to make a statement that I will never forget.  She said, “Excuse me, Dirk.  We have a saying for that type of person here in Texas.  We call them ‘Big Hat . . . No Cattle’.”  She described the truth perfectly for many “superstar” agents or lead agents of large teams.  They are often big hat . . . no cattle.  I want to state emphatically that building a Champion Team is the way to go in the real estate business.  The problem is so few agents who have large teams currently know the steps to take and the order in which to take them.  Too many are left with a business that is worse or marginally better than before.

A Champion Lead Agent recognizes that the truth of your income, earnings, and quality of your business is contained on line 32.  The Champion’s scorecard isn’t the gross income, the production awards, sales volume, number of assistants, or name recognition.  You can achieve a number of those outcomes, especially the production awards, because you have a larger number of bodies on the team than the next guy.  One of the key measures to see the effectiveness of your team is to divide the units of production by the number of people on the team.  What is the per-staff-member production of the team?  What is the per-sales-team or per-agent average production?  If you are less than twenty units per staff member, your efficiency is pretty low.  If your per agent average is less than thirty units, you are not getting the efficiency of sales out of your salespeople and yourself.  You should be pulling that thirty agent average up with your unit production.  A Champion’s scorecard, when we are talking about money, is focused on line 32 of the 1040 form on your tax return.  To be blunt, line 32 is your adjusted gross income or AGI.  This is the number that you get to live on, save, invest, and spend.  It’s the number that any bank will look at to determine whether to loan you money on the investment property we all want to buy to build our net worth.

Reality is contained on line 32.  Jack Welch, the former CEO of GE, has six famous rules for business success.  The first is face reality as it is, not as you wish it to be.  Too often, we hedge, adjust, evade, and concoct a new reality that is more optimistic than reality is.  A Champion Lead Agent doesn’t concoct a new false reality to make themselves feel better.  They deal with the truth and change the outcome.  There is nothing more based in reality and more black and white, with regard to earned income, than line 32 of a tax return. 

A Champion Lead Agent’s scorecard is far more encompassing than just the money.  The reason I started with the money is that is what we generally recognize in real estate sales circles.  It is also easy to count and see how we are doing.  When evaluating the other areas of life, the counting is more difficult to observe and gauge.

I personally believe that making a lot of money is one of the easiest areas of life to succeed in.  It’s the easiest area of life to master:  creating or earning a large income.  Keeping that income and creating more wealth from that income are far more difficult than generating it in the first place.

The most challenging and certainly more meaningful area of development and growth is in your relationships in your life:  investing the time to have vibrant relationships with your spouse or significant other, your children, parents, and friends.  One advantage that your Champion Lead Agent business and income provides is the opportunity to earn more in less time, so you have additional time to invest in life’s more meaningful pursuits.  In order to become a Champion Performer, balancing career, money, family, health, and spiritual areas of life must be our aim.  You don’t have to be a Champion to earn a large income and bankrupt the other areas of your life while doing it.  I am not greatly impressed by people who do.  It doesn’t take any particular skill to work too many hours, earn a large income, and blow up your family in the process.  You get an A for income and an F for family.  Your GPA average is a C or less.