Is your real estate business REALLY growing?
Sometimes in our businesses it can be hard to really tell if we’re growing or not. Yes, we are doing deals and making money but are we really growing?
I wanted to share a few tips on creating a financial metrics inside your business similar to ours. If you have a metrics system in place you can show growth inside your business month over month or year over year.
We like to track leads, and ask ourselves how many opportunities did we have to work with this month or this year? We look at closed volume and closed units, then we take our gross revenue and divide it by how many deals we did and that tells us how much each deal is worth.
For example, if you made $300k in your business this year and you did 10 flips, you made $30k per flip. That’s on a gross basis, obviously you have expenses so you want to do that on a net basis as well.
We like to track these on a monthly basis and compare them to the past 12 months. This data is crucial to your business because there are so many other things you can do with it!