During the last episode, we talked about planning your future and how that played into scaling.
That’s just one piece of the puzzle - today we are focusing on why knowing your numbers is so critical for your growth.
I want to dig deeper into the things that matter most when it comes to knowing your numbers. One of the things that separates average real estate agents from top producers is the ability to track their numbers and evaluate themselves at a high level.
In business, the thing that matters most is the net worth that it generates for you as the owner. If your mind isn’t calibrated that way, you need to stop and do a net worth calculation. Our members do it every month so that they know their net worth and how their decisions affect it.
Let’s break down ‘Knowing Your Numbers’ that we covered in the first episode of the series.
Determine Your Economic Model
When I was preparing to hire my first buyer’s agent, God was on my side. I put the right economic model in place. I knew that there was no way I could be a top producing agent and keep showing up for my kids. I envisioned how it would look, and set a goal that I would be out of production.
It takes being real with yourself to look at your business and acknowledge that you can’t do every part of it. There’s no shame in that! Simply realizing this and hiring assistants to help out with the more tedious work, increased my hourly wage calculation significantly.
Too often people set their businesses up on a model that’s unsustainable. People realize they can’t sustain the growth they are bringing, so they onboard an assistant or an administrator, grow to 1 million GCI or more, but they’ve set it up the wrong way.
Your operating expenses are:
- Other overhead
Foundational Financial Tools
Are you generating meaningful revenue on a monthly basis? Are you tracking the numbers that matter?
We track our numbers by department - with leading and lagging indicators. We generate reports that help us keep track of where we have been and see how far we have come.
Track your marketing ROI. Is every lead that is coming in able to be traced back to a specific source? We have metrics that tell us how each and every lead comes in and how much money we spent on them - which makes it helpful if we need to slice and dice in hard times.
Achieve Financial Freedom
Do you have a way of moving money around in the business so that it improves your net worth?
On the 10th of every month, I track my net worth. The only point of running a business is because you don’t want to work for someone else, right? There’s a major opportunity if you do it right - but the opportunity is lost if you can’t track your numbers.
I use a system called Profit First - it’s a book by Mike Mcalowitz. I love the guy.is mission is to end entrepreneurial poverty. I determine what my profit is going to be, instead of taking what’s left over.
The CFO of a business is the person responsible for providing meaningful data for the owner on a regular basis to use to determine what course of action to take next. Are you making the right moves for your business?