Realtors who never track their numbers will never know…
What it will truly take to hit their goals.
What created success in the past.
How to track their real expenses.
What their true ROI is.
Every single successful entrepreneur knows his/her numbers.
Tracking does not need to be difficult, and you do not need some elaborate system. Google Drive Sheets, Word documents, or whiteboards will all do the job, and are FREE!
I recommend you track three different parts of your business. In the end, it all ties together and will tell you the exact story you need to know to grow your business and make smart, strategic decisions.
The 3 Parts Of Your Business To Track:
#1: Activities and Actions
#2: Closing Data
#3: Income and Expenses
#1: Activities and Actions: I recommend you track these per lead source. Track the number of leads received. Track the number of reach outs (calls, text messages, etc.). Track the number of conversations. Track the number of appointments set. And track the number of closings.
You can always track more items, of course, but the more basic you make your system, the higher the likelihood is that you will execute on it. Eventually, the above tracking information will tell you: how many leads = one closing for that lead source, as well as how many reach outs, conversations, and appointments set = one closing.
#2: Closing Data: I recommend that you track the lead source tied to each closing, buyer/seller, commission earned, and final sales price. This data, combined with the above data in item one, tells you so much information about your business. What lead sources are best, where your time is best spent, etc.
#3: Income and Expenses: I recommend you track all your gross income received (commissions earned) per lead source, and break it up between buyer and seller. Then track all your expenses. NOT just your overall total expenses, but break it down by each individual expense, each individual lead source, etc. You should know how much of your expenses are from your systems, lead generation, rent, open house signs, professional listing photos, and so on. Do this every single month as you will be forced to know where your money is going and also given the opportunity to evaluate your expenses each month and determine if all are necessary.
Again, this data allows you to grow your business and make smart, strategic decisions. Maybe you discover one lead source is bringing you a 700% return and the other is bringing you a 400% return. 400% ROI is a good return, but it may make more sense, if you are able to do so, to take that money, and invest into the lead source giving you a 700% return.
Watching the numbers will help you tremendously in your yearly goal setting and business planning as well. Maybe you want to increase your income by 30% this year from last. This data shows you exactly what you must increase to do so. Just imagine if you had concrete information like this: 10% of your Leads turn into appointments set, 76% of your appointments set get conduction, 26% of your appointment conductions turn into a closing. You discover you close one out of 47 of your leads, and your average lead cost is $6. That breaks down to one closing per $282 per closed home. Then, you discover it takes 500 Dials to get 100 conversations and 100 Conversations equals 1 Closing. You then know EXACTLY how many leads you need daily, how much you must spend, how many dials and conversations you must have daily, etc. to ensure your yearly goal becomes a reality. Powerful stuff!
I know tracking numbers is not fun and is something most of us dread doing, but there is not much that is more important inside your business!
Remember, your tracking system does not need to be fancy, it just needs to be in place. So start tracking and start EXPLODING your real estate business!
Thanks for reading!
Joshua Smith, Realtor/Mentor/Entrepreneur
-Voted 30th Top Realtor in America by The Wall Street Journal
-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily