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Commission Confusion!
Happy New Year! As always, a new year can mean a new start to how you
operate and manage your business. To state the obvious, 2009 promises many
challenges, and the Real Estate Industry is obviously no exception.Many of your colleagues in the Real Estate industry have already experienced
significant drops in sales and are now suffering from major cash flow problems.
From the various offices I speak to it does not appear to be all doom and gloom
but the market is incredibly volatile and unpredictable.The usual seasonal lows around this time of year may be even lower than the
norm. The effect of this on your cashflow is going to hit hardest from late January
to early March.It is crunch time now!
You need to prepare for any potential cashflow shortages now! You need to
have a clear understanding of your business and prepare for the unknown now!No one can predict what the next few months will hold and none of us alone can
control the external factors impacting the market. Devote your time and attention
to what you can control.For most Real Estate offices, one of the most complicated areas of the business
is understanding the average rate of commission paid to staff. The average
rate of commission reflects the amount of profit you make on every sale that
comes through the door. This is not as easy as it sounds! You need to take into
consideration;- Commission rates
- Commission thresholds
- Staff mix
- Inclusive or exclusive of super
- Staff review dates
- Different structures for different salespeople
- Anticipated sales levelsWhich salespeople are the ones getting the sales in the current market? A change
in staff mix can dramatically impact your average rate of commission!Our advice is that the least you should do at present is to have a clear
understanding of your average rate of commission. This is not an easy calculation
when you take into consideration all of the variables. To assist we can undertake
a Commission Structure Review. The review identifies your current average
rate of commission based on your current commission structure and will identify
the impact of at least 6 possible changes in the commission structures. For
example, if thresholds were increased.Of course changing the commission structure is not the only possible strategy.
Another possible strategy would be to increase your staff numbers! But, by
undertaking a review you at least have a much clearer understanding of your
business and the impact of changes you may be considering.If you are interested in arranging for us to undertake a Commission Structure
Review on your business please do not hesitate to contact us using the below
contact details. The standard cost for a review is $1,500 (plus GST).If you have any queries, please do not hesitate to contact me.
Regards
JOHN KNIGHT
Bean Thinking About Something Else?
Past Newsletters
Bean Thinking... Tips for businesses affected by the floods Bean Thinking... Budget 2010/11 Bean Thinking... Henry Review Bean Thinking... Sustainable Competitive Advantage Bean Thinking... 7 Deadly Wastes Bean Thinking... What-ifs Bean Thinking Tax... ATO Crackdown on Tax Debts! Bean Thinking Tax... R & D Tax Concessions Bean Thinking Tax... Recovery of Land Tax Bean Thinking Tax... Last Minute Tax Planning Tips Bean Thinking Super... Avoid Excess Super Contributions Bean Thinking Real Estate... Changes to Comission Structures Bean Thinking Real Estate... Benchmarks! Bean Thinking Real Estate... Purple Cows
Past Presentations
Bean Thinking Real Estate... Good, Bad & Ugly: Real Estate Business Bean Thinking Super... Super + Borrowing = ? Bean Thinking Super... Borrowing inside Super "How does it work?" Bean Thinking... Goals & Strategies for 2010/11 Bean Thinking... Tax Time for Unit Owners
UHY Haines Norton Brisbane
Level 11, 42-60 Albert Street
GPO Box 2876 Brisbane Qld 4000
P: 07 3210 5500
F: 07 3229 6174
E: brisbane@uhyhn.com.au
www.uhyhnbrisbane.com.au
UHY Haines Norton Gold Coast
Level 9, 1 Corporate Court
Bundall QLD 4217
P: 07 5510 4836
E: goldcoast@uhyhn.com.au
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