This weekend, all of America will be keeping score during the big game.
Talking heads will examine every hit, every tackle and every play; sputtering off key players’ stats and trying to predict which team will take the winning title for Super Bowl XLVIII.
But what if we didn’t keep score? What if we watched the game minus Peyton Manning’s passing yards or Richard Sherman’s interceptions? What if a touchdown didn’t translate to six points on the board or a field goal to three? Not only would there be confusion, there would be a lot of anticlimactic endings.
The point we’re getting at is: can you know if you’re winning in a game if you don’t know the score? Of course not. You don’t know where you stand until you know how to keep score.
Now imagine your business is the Super Bowl and your financials are the result of your plays and your team’s talent. The numbers – the score – of your real estate business are the only way you’ll know if you’re winning.
To keep score in the big game of real estate, you need to track several key metrics, including:
- Gross commission
- Income, or gross commission income
- Volume of leads, listings, buyers, new business and other growth essentials
- Units or deals closed
- Net income
- Money in the bank
Like a football coach, real estate agents need a system to evaluate their teams’ performance on the field. It’s called a profit-and-loss statement. Your profit-and-loss statement looks like your budget, with the addition of detail to each account. It lists income, expenses and net income – what goes in, what goes out and what’s left over. As a coach, you should produce and review these figures on a monthly, quarterly and annual basis to make sure you’re on track.
Of course, these numbers need to be considered in the context of your goals. Is your net income at the level you want it to be? Are your farming activities and new business leads at levels that will lead to appropriate levels of new business? If not, it’s time to adjust business activities to get them where they need to be.
Numbers tell a story and they often don’t lie. Put the profit-and-loss statement in your real estate playbook and watch the wins roll in.
Note Well: This article first appeared on KW’s Blog at http://blog.kw.com/2014/01/30/keeping-score-a-super-bowl-approach-to-your-real-estate-business/