“There is nothing so useless as doing efficiently that which should not be done at all.” ~ Peter Drucker
As a real estate agent, keeping track of your numbers is crucial to the success and growth of your business. Knowing your numbers helps you to predict your income, identify areas of improvement, and make informed decisions about your business. This blog post will discuss the importance of keeping track of the numbers that matter and how they can impact your success.
The first set of numbers you need to know are related to your sales process. For example, knowing the number of real estate-type conversations you need to have before getting a referral, and the number of referrals you need to have before you get an appointment. And then the number of appointments you have in order to get a listing or sale. This information can help you better understand your conversion rates and predict your income. Knowing your numbers can help you to refine your sales process and ensure that you are making the most of every opportunity.
If you are just starting out or this idea is new to you, you may not have been keeping track so you might ask "what should I keep track of?". You will need to keep track of Phone calls made, acutal connections, doors knocked, appointments made, presentations made, listings taken, sales made. etc. etc. We have a chart that will help you out. But you need to keep track. By Keeping track you will increase your accountability and know when to make adjustments to your activities. You might consider using a spreadsheet or customer relationship management (CRM) software for your contacts, referrals, appointments, and sales. When you have the information in one place it allows for easy tracking of your progress and enable better decisions about your business. The context of your previous conversations and interactions is available for review and you are less likely to lose a lead. For example: what you talked about on your last call and any info you have sent or promises made.
Maybe you like to think you didn't get into real estate for the money. That it was because you really like people. If you don't know where the money is coming from and where it is going, you will not be in the business for a very long time. It might seem obvious but it really isn't. A REALTOR friend of mine who had a ton of experience in real estate and in banking, once wondered aloud with great incredulity about how few REALTORS "knew how big a nut they needed to crack each month." He said it is imperative that you know your monthly household expenses, as well as your monthly business expenses. This information can help you to create a budget, set financial goals, and make informed decisions. It's important to keep in mind that these numbers vary greatly depending on your situation, so it's important to have accurate information to work with.
When keeping track of your financial numbers, consider using budgeting software or a spreadsheet to track expenses and income. It's also a good idea to regularly review your bank statements and credit card statements to ensure that all transactions are accurately recorded.
I think a rule of thumb for a ratio is your expenses should not exceed 30%. I think closer to 20 if you can. Included in this would be office fees, promotion expenses, automotive expense etc.
One of the biggest benefits of keeping track is it helps you to develop a sustainable and predictable business. When you know your numbers, you can create a plan that takes into account your goals, your expenses, and your conversion rates. Be strategic and create a roadmap for your business to ensure that you are on track to reach your goals.
There is an expense that can become a bottomless pit of spending. It is called your Sales and marketing expense. It is so easy, sometimes, to convince ourself that the newest and greatest idea are what we really need to put us over the top. One of the aguments we use is "I only need ot make one extra sale from this." That is not true. Think about the 30% we just talked about. If you are spending a $100.00 and only gettijng $100.00 back, then you will not have anything to live on. A better rule of thumb would be if you spend 100, then you should make at least 300. Many of the successful realtors have a much higher return on their Sales amd marketing expense investment.
Your ROI is a measure of the effectiveness of your advertising spend and is calculated by dividing the revenue generated from your advertising efforts by the amount of money spent on advertising. Keeping track of your ROI is important because it allows you to determine the effectiveness of each advertising dollar spent and identify the most effective advertising channels for your business.
You are in a better position to make informed decisions about where to allocate your resources in the most effective way. For example, if you find that a certain advertising channel is not generating a positive ROI, you can adjust your strategy and focus your efforts on channels that are more effective. This information can help you to maximize your advertising budget and improve your overall return on investment.
In conclusion, keeping track of your numbers is essential to the success of your real estate business. Knowing all of your numbers can help you to make better informed decisions, set goals, and create a sustainable and predictable business. Take the time to understand your numbers, be more strategic and you will be well on your way to success in the real estate industry. If you are finding you need some help in this area, feel free to book a free 30-minute call with Don. We have resources that can help.
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