Key Changes for CRE Executives Creating 2021 Budgets
Daniel Levison | November 2, 2020
As budget season gets into full swing many CRE executives are taking a harder look at every aspect of their 2021 budgets. Typically a mundane process, but executive’s we spoke with described a more dynamic and interactive process than in years past.
With COVID-19 cases on the rise across the nation, over the past several weeks, and with a potential or partial shelter in place order for the upcoming flu season becoming more of a reality CRE executives have the health and safety of their employees and agents on their minds.
Whether or not a second shelter in place order becomes a reality or not – it’s likely only a matter of time before something will require businesses to work remotely again. The question managing principals and brokers are asking themselves is – how productive will their brokerage business truly perform in a primarily digitally environment.
Managing principals we spoke with felt somewhat overwhelmed by the number of options to digitally manage their operations. Selecting the proper vendors to adequately handle all the various aspects of their brokerage operations can be a daunting task.
No matter how successful your brokerage business has been, developing accurate budgets and strategic planning will always be an integral part of its continued success especially in environments such as we find ourselves today. A successful budgeting process today includes asking your top producing agents what tools they have researched and believe will help them and the organization increase productivity and profitability. Agents can be a valuable resource in helping your business understand what tools can improve their efficiency and be fully adopted within the organization.
Input from key back-office personnel, is critical when it comes to creating a dynamic budget for 2021.
Including the back-office is an essential element that is, at times, overlooked especially involving those individuals who actually use current systems on a daily basis. Based on our discussions with managing brokers, and back office executives we did find some similarities on where their focus is during this budget season.
These areas include:
- How their brokerages can effectively and successfully market properties digitally
- Automating back office processes to help control future desk cost
- Adding tools that provide decisions makers better insight into their future revenue, both booked and unbooked
There are numerous critical factors to consider when evaluating digital marketing solutions for your brokerage business. Although we researched over twenty-five various platforms to digitally market commercial property some of the most versatile solutions, exclusive of Costar, Loopnet and TenX we have identified are
Managing brokers also shared that one of the best ways to increase their brokerages profitability was to regularly monitor their firm’s desk costs. One of the most optimum avenues to increase productivity and profitability, is through automation of mundane and repetitive tasks which will allow your existing personnel to process more work per capita, with fewer errors and mistakes.
“I would recommend CommissionTrac because it has automated what we were doing manually, which was prone to error. Whenever you have a manual process, like spreadsheets, you can have errors… And CommissionTrac just takes all of that away! It automates calculations that can be really complex. CommissionTrac can handle it all – whatever the type of transaction it is.”
-Susan Olinsky, CPA, Senior VP of Finance Collier’s Philadelphia
With tiered splits plans being the standard by which compensation is calculated for real estate agents many industry professionals we spoke with felt the current process of using multiple excel spreadsheets was prone to continual human error. Reducing human error through automation is also an effective way of improving transparency and trust with your agents regarding how their compensation was calculated on individual transactions, and throughout the year as they pass through their potential tier commission hurdles.
“I would recommend CommissionTrac because I felt like I was in the dark before CommissionTrac and now I see everything going on. I actually see the full process start to finish. I can just see what’s going on when I need it, not when somebody has time to get it to me. I like having the information I need to run my business at my fingertips.It’s a self-service platform which is perfect.”
Todd Seamen, TenantBase, Market Lead, Atlanta, Georgia
Peter Drucker, known as the man who invented modern business management, has been quoted as saying “If you can’t measure it, you can’t improve it.” The question becomes if you aren’t effectively tracking it, how can you measure it, and if you aren’t measuring it, how can you improve it?
Agents and managing brokers that understand where their past revenue came from and have access to that “real time” data have an increased ability to market themselves and their companies to clients with more success than those who don’t. Whether you’re an agent or a managing broker, truly understanding where your historical and future revenue and commissions were derived allows you to be more effective in tailoring your prospecting and marketing efforts for future business.
Understanding whether your business historically has come from tenant representation, landlord representation assignments, sales or leasing transactions as well as where geographically the revenue was created gives principals and agents the ability to create the most accurate projections and budgets.
“I love the reports – everybody’s report is different based on what they need. So Mark is going to want a Future Revenue Receivables report. And it’s a click of a button, it’s all right there, I don’t have to do any extra work. Maybe one of the agents will ask, ‘where am I in my splits?’ and with just a click, it’s all right here at my fingertips. I can’t say that enough, that it’s all right there. It’s a huge deal. Even the home screen (dashboard), it’s just perfect, it’s exactly what Mark wants as well (with all of the graphs). We didn’t have anything like this, we used spreadsheets that I put together over the years. It’s a world of difference.”
Melissa Fernance, Office Manager, Sentry Commercial, Hartford, CT
We all know that 2020 has been a stranger year than most, but those brokerages who use what they’ve learning this year to prepare for 2021 and beyond will outperform those who keep going on with a “business as usual” mindset.
To find out why over 1,100 users and affiliates of Colliers, CBRE, Cushman Wakefield, NAI, SVN, Lee & Associates, as well as largest national ‘tech-enabled” brokerage business, TenantBase have chosen CommissionTrac as there back office CRE platform – request a demo today by visiting our website at CommissionTrac.
Authors: Daniel Levison – CRE Holdings (CommissionTrac, Commercial Property Consultants, Atlanta Investment Properties, SharedSpace) and Turner Levison, CEO, CommissionTrac