When a Cup of Coffee Cost $166
The following story is true. I feel like I must provide you with this disclaimer, now, before we go any further. If one waited and stated this rather simple sentence at the end of this story – few would believe it. So… hand to God, cross my heart and hope to die, pinkie swear, and however else you’d like me to attest to you in the affirmative – it is true. Better yet… the author is telling this story firsthand. Yes, I was there and I experienced parts of it. And, yes, I thought it was ridiculous even at that time. Now that I got that off my chest…here…we…go…
Most Realtors who’ve been in the business even for just a short period of time realize that a small section of our peers are responsible for a great deal of our industry’s transactions. This is typical in the great majority of sales professions. It doesn’t matter if you’re selling used cars, medical supplies, vacuum cleaners, or Tiffany’s jewelry – in sales, a select few are responsible for the majority of all the sales. It’s so prevalent that, in business, it’s come to be known as the 80-20 rule. Generally speaking, in most sales industries roughly 80% of the volume sold can be attributed to just 20% of the salespeople working in said industry. To put it another way, the best salespeople just kill it while the others…not so much.
I don’t know about you, but I’d rather be in that top 20%. So, how do they do it? What makes those “crème de la crème” so successful from the rest of their peers? Is it luck? Is it more time invested? How about more money spent on marketing?…or ancillary staff?…or their location?…etc.
Well, from my personal observations I’d answer, “Maybe” to all the above questions. Those may have some small effect on performance. None are the primary cause of successful Realtors though. One common trait that I have seen in the very best agents, however, is the ability to be unbelievably efficient. To the extreme! What am I talking about??
One must understand the value of time in order to act as efficiently as possible. Should someone ever ask me that philosophical question, “What do you think are the most valuable things in the whole wide world?” I always know what MY first two answers are:
- Health (my own and of my loved ones)
- (fill in the blank ____ ) Usually I’d say “Love,” though on many Sundays in the Fall, it’s that my beloved Browns can win just one more game! Sorry, I digress.
Time is something that we all have. Money can’t buy us more of it. When we’re out of it, all we want is just a little more. Though each of us are portioned the same amount of time each day, we all use it differently. Some of us waste it; some of us make fairly good use of what we have, yet a select few… they grab hold of it! They’re selfish with it! They give it out to others sparingly, miserly, and with great focus. Time, to them, is like gold is to a leprechaun. They value time more than money, power, fame, or even love. Think about it. If you covet any of those things, you need time, first, in order to obtain them.
I bet you’re thinking, “I thought he was going to tell me some unbelievable story too?? (We’re almost there)
Take 5 seconds now… Ponder your level of value when it comes to time. Do you think you value it? Do your actions back up your value? Ultimately, it’s not our thoughts, it’s our actions that provide us the answer to how much our time each day is worth. At the end of the story, think back on this and ask yourself these questions again.
Finally!… that story.
When I first got into the field of real estate I worked for a few years here in Ohio, cutting my teeth as a typical residential Realtor. I loved it and continue to today. A combination of sheer dumb luck, an unsolicited job offer, the impatience of youth, and the promise of warmer weather eventually led me to Florida a few years into my career. These were the boom-times to be in real estate. The early 2000’s. Fortunes were being made everywhere, especially throughout the South of the U.S. Just before the first domino fell and that historic bubble burst, I moved from the Miami area and found myself working for a small boutique commercial real estate brokerage on the Gulf Coast of the State.
This office was a new company founded by two 29- and 30-year-old hotshots who broke off from a national commercial brokerage to build their own “empire.” Over roughly a three-year period the office and its team of 6-8 employees represented investors in roughly $750 million in commercial sales. Not a paltry sum.
The two senior brokers made millions each year from our commissions. They represented rich and famous clientele. They bought things like a private plane, a yacht, fleets of exotic cars, and of course their own investment properties all over the U.S. I’ll never forget a short conversation I had with them soon after I started there. It was a Monday, and I asked that common water cooler question, “So, what did you guys do this weekend?”
At the time, I thought I had a real ‘zinger’ to add to the conversation because I had done something like attended a local concert. Before I could add that bit of spice to the conversation, the first exclaimed that he’d been snow skiing in Aspen, Colorado. With no trace of envy or braggadocios, the other said he didn’t do much – other than log a few hours flying his plane with his flight instructor. Needless to say, it was a different world than what I was accustomed to, and it took some getting used to.
We were trained by the brokers much how they were trained. Valuing time was above all else. When working, one did not waste a second. Not one. What does that really mean though? You may have your own idea. I guarantee that it’s not the same as those two guys’.
For example, those two once paid an independent advisor to come analyze both of their lives and business. This was a highly educated and respected specialist whose actual job was to follow people, like fortune 500 CEO’s, around almost 24 hours a day. He’d simply observe what and how the client worked and spent their few remaining off-hours each day. All without interacting. (When you think about it, it’s pretty weird. Anyways…) After a couple weeks of doing this, he would prepare an extensive report and deliver the findings. This was done just prior to me starting at the brokerage. Apparently, the professional advice cost the two brokers $40k. (Wow! I know.)
The entire report could essentially be boiled down to what I’m writing about today – value YOUR time more. So, they did.
Time is ethereal. One can’t hold it or see it. It can be hard to visualize it enough to weigh it or compare it against real world, tangible, things. To overcome this, what we did was assign time a value that we were very familiar with. We equated it to actual dollars mathematically. How? It’s not that hard actually.
On the wall right above my little cubicle was a handmade poster. It read something like…
It was a very direct reminder. Don’t screw around. Time is money! We’ve all heard that saying. The top 20% in sales have stopped to truly think about it. Now, to explain that equation….
The first number represents the amount of money that just one of the brokers made annually in commission, $4 million. Nice, right? Take that $4,000,000 income and divide it by the number of weeks worked in a year, 50. Why not 52, one may ask? Don’t short yourself those two weeks of “vay-cay” that you certainly deserve.
- So far that’s $4M ÷ 50 weeks = $80,000 (Avg. weekly income for those weeks, sans 2 weeks’ vacation).
Next, you divide that $80k weekly income by 40. What’s 40? The number of hours you work per week.
- $80,000 ÷ 40hrs per week = $2,000 earned per hour.
I bet you know what 60 represents now. Yes, minutes in an hour. Thus, you take the hourly wage and divide it by minutes.
- $2,000 ÷ 60 = $33.33 per minute.
Earning $33 per minute sounds awesome, right? Those at the very pinnacle of our industry earn sums like this and do so at similar astounding rates per hour, or week, or annually. It’s enough to be envious of no matter how you break it down. It isn’t an exercise to stroke their ego though. The exercise is done primarily for two reasons:
1) To motivate you to continue to grind through those long stretches where you feel like you’re not generating any real business.
2) To provide you with a measure of time that’s easier to grasp, compute, and compare other choices to.
That brings me to the last number on the handmade poster: 5. That number represented the amount of time it took one of us in the office to get up from our tiny cubicles, make our way done the short hallway, and to pee. That’s right. To pee.
Should one of us ever stop making phone calls to get up and visit the bathroom, our bosses literally perceived that as LOSING $166 in income. If one did that more than once before lunch, let me tell you, there’d be hell to pay! You think I’m joking? Being hyperbolic? Nope…sorry.
Time was so important (and bathroom breaks were so frowned upon) that the office policy was to have no more than one cup of coffee in the mornings. Why? That cup of coffee would cost us $166 at some point later in the day. Unfortunately for me, the bathroom example wasn’t the only policy built around valuing time.
As a junior broker in commercial real estate, you essentially are a cold calling machine. We tried to make 100-150+ calls each day in an attempt to reach and talk with commercial investors. Time was so important that we were specifically trained to not use the receiver connected to phones, but rather a headset. Using a headset allowed us to hang up around 2-3 seconds faster each call because I could hold a finger above a button rather than pick the receiver up to talk and place it down when done.
“2-3 seconds mean nothing!”
Not exactly. Multiply that out 100 times, (one day’s worth). That’s a possible 300 secs a day I could save!
“What!?! Even so… ???” I can just hear you laughing at such a silly thing.
Let me use time math – Those 300 seconds are $166.66 per day. Yep, another 5 minutes. Over a week, that’s $833! What many Americans make working 40 hours!
There were a hundred more examples I could list. Most as ridiculous, or worse, than these. However, I’m sure you already get it. The point of my whole narrative here isn’t to provide examples that are extreme for almost all of us. Rather, it’s to remind us all that we often DO lose sight of what’s actually important and what’s not quite so imperative. Successful people know how to differentiate between imperative and the rest.
Those top 20% in sales who sell 80% of the product, are EFFICIENT. They get more done in an hour than the bottom 80%. Much of that stems from valuing their time correctly. They know how to say “NO” to people and things. They are thinking, “is this water cooler conversation I’m in right now really worth $100 to me? Is it worth $25? $10, or even $5?) Those agents set a to-do list that has nothing in it that isn’t vital. How do you tell what’s imperative and what isn’t? Use your own time math. Take the amount the YOU want to earn this year and insert that amount into the first number in the equation. When you do: Facebook check-ins, lunch out of the office, picking up the dry cleaning (while we’re supposed to working), etc. may no longer seem so important. Much could wait until later… or be eliminated altogether. Ask yourself, do instances such as these bring in any revenue for you? It’s OK if they don’t, as long as you realize what they are actually costing you in lost opportunity costs (aka – time) and that price is acceptable to you.
Focus on what things DO earn you money. Then, use the time equation to prioritize that list even further. What is worth $33 per minute? Better yet, what’s worth $2 per minute? Much of what we think we “have to get to today” can be washed away with a clearer personal outlook. What that is, is different for everybody. Watching my Browns win is worth $240 to me. (2hrs of game time @ $2 per min.) Watching them lose?….Nope.
Apparently, today, I felt it was worth the time to pen such a lengthy diatribe. Time will tell. I’d argue it was worth my effort, should just one of you change your perception of time and alter HOW you work as a result. Even if you are in the top 20, 10, or 5% you can always reassess HOW you work and HOW you view your daily tasks. Efficiency can always be improved – even if it’s to the point that a cup o’ joe costs you $166.