How Clean is the Data Upon Which You are Basing Decisions?
In order to run a profitable Real Estate Brokerage, one needs to know and truly understand the metrics involved in running one’s business.
At the Profit Centre, we strongly believe that THE most important metric in the brokerage business is Gross Profit Per Realtor® (GPPR). It is instrumental in defining your Gross Profit per Realtor® Objective (GPPRO), a fundamental business metric.
Through my experience working with over a thousand brokerages in varying capacities over the last ten years, the ability to access key information and more importantly clean information is critical in making sound financial and operational decisions.
As part of our service offering, we often recommend complementary services that are necessary in order to operate at a high level. One of these is iBroker by GryphTech, a powerful back office management solution. We highly recommend iBroker to provide the clean foundation necessary to create profitability.
Over the years I have come across several glaring errors and erroneous methods in other back office management software that have derailed a broker's ability to manage and operate his/her business effectively. The risks are high, and it is important to have a solid foundation to work from to be successful and profitable.
Brokerage Profit Analysis
The above mentioned experience is one of the reasons we created the “Brokerage Profit Analysis”. It is imperative to interpret information correctly. The Brokerage Profit Analysis normalizes data to create an operational view of the business. I also call this “The View of the Buyer”.
It provides a true apples to apples comparison of information in order to clearly compare key metrics in order to make sound financial and operational decisions.
The Profit Analysis also forecasts the “Future State”. What would the outcome be if we stayed the course?
We also forecast another view called the Target Operating Model (TOM). This is a “What if” view. What if your business made certain financial and operational changes. The “What if” view motivates us to the right activities because when you have a clear goal, you are typically more inspired to do the hard work knowing the potential outcome of those activities.
The bottom line is simply this - stop operating blind. Knowing your numbers is more than just reviewing reports. Interpreting reports with a proper analysis is essential and powerful in creating a profitable organization.
Peter Mueller is the founder and CEO of The Profit Centre. The Profit Centre and iBroker have partnered to offer North American brokerages a one-of-a-kind back office management solution designed to streamline operations and increase profitability.