It’s important to track your business vitals.
If you don’t track, you don’t know when things aren’t going right -- except maybe by looking at your bank account at the end of every month.
The Importance of Tracking
So what are the most important things to track in your business? How much should you track? How do you avoid tracking too much?
Generally, the more you track the better, because you’ll have a more robust overview of your business.
At the same time, you should always aim to keep an overview of what you track, by implementing a system that makes sense to you. There’s different ways to do this, but it’s crucial to collect and organize metrics in a way that makes sense to you. If you don’t, you’ll drown in numbers and probably worse off than when you started.
Key Performance Indicators
To help you get going, we looked for the best metrics for any real estate business to track -- we’ll tell you what they are, and why they’re important.
1. Appointments: Before you track anything, track appointments. More appointments means more business. It’s as simple as that.
2. Contracts: A deal isn’t a deal until you have a signature. Check how many contracts your team has actually completed over the last months. Are they increasing the number of finalized contracts? Is the number stable? What can you do to improve this?
3. Source of Business: How does business come to you? Through what channels? If you can answer these questions, you can ramp up your efforts in channels that work – and reconsider your investment in areas that don’t.
4. Average Sales Price: You’ll probably have a good idea of what properties in your area sell for. How do your sales match up? Are you able to exceed average price in the area? If not, you could set as a goal for your team to focus on finding higher-value properties.
5. Net Income: This is what really counts: Calculating the correct commission, what goes into splits, agent salary, taxes and other costs. You’ll know exactly how much will flow back to you over the coming months and years. You can also track progress -- are you managing to increase your net income month by month?
That’s it! Track these five metrics and you’re already way ahead of most of your competitors. Coupled with some clever goal-setting, these metrics will help you improve your team’s performance and profitability.