It's time for growth
But the MOST important figure in any Letting Agency Business, is the NET number of properties under management after you calculate the number of Fully Managed Move In, less the Fully Managed Vacates… this will solely determine whether your business is GROWING or DECLINING, and yet so many agents NEVER look at this figure…
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When we start working with a new Agency Partner, we would always encourage you to create a new business plan, as your business will change as a result of outsourcing your management, you will have much more time and your staff will need to be refocused on new areas, such as marketing and business development, this may mean more training required for your team but definitely more focus on business generation.
The challenge with running letting agencies is the fact that it is a very complex and high volume business, trading on small numbers, that collectively when added up can make or break a business, so it is absolutely KEY, that the most important numbers that drive the success of your business are managed carefully.
We will furnish you with a Branch Performance Report, which is a monthly report of the key number you can use this to track each month and compare to previous performance, which tells you whether the business is growing, stalling or going backwards and in what areas, what you will find is that in most months, there will be a collection of increases, decreases and neutral movements, dependent on the staffing levels, training levels but most of all due to the FOCUS of the team.
Many business owners, judge the performance of their business on the turnover or income of the business, but this is dangerous, if used in isolation, because, much of the income we receive is delayed, this means that it may be months before you discover that a Lister stopped listing, or was cutting fees to win instructions.
When we start working with a new Agency Partner, we would always encourage you to create a new business plan, as your business will change as a result of outsourcing your management, you will have much more time and your staff will need to be refocused on new areas, such as marketing and business development, this may mean more training required for your team but definitely more focus on business generation.
The challenge with running letting agencies is the fact that it is a very complex and high volume business, trading on small numbers, that collectively when added up can make or break a business, so it is absolutely KEY, that the most important numbers that drive the success of your business are managed carefully.
We will furnish you with a Branch Performance Report, which is a monthly report of the key number you can use this to track each month and compare to previous performance, which tells you whether the business is growing, stalling or going backwards and in what areas, what you will find is that in most months, there will be a collection of increases, decreases and neutral movements, dependent on the staffing levels, training levels but most of all due to the FOCUS of the team.
Many business owners, judge the performance of their business on the turnover or income of the business, but this is dangerous, if used in isolation, because, much of the income we receive is delayed, this means that it may be months before you discover that a Lister stopped listing, or was cutting fees to win instructions.
Once you have tracked these key numbers for a while, you will work out your average numbers you expect and key conversions to, so if you know you normally get 20 valuations each month, and from these you get normally 15 take ons, then you know your conversion rate is 75%, this gives you a benchmark to measure performance in the future and these conversion expectations, should become part of the figures you check.
Next, if you know that 65% of the take on instructions you get from your best lister (or when the owner used to do valuations) are Fully Managed Instructions, then you now have this figure as a bench mark to work on too. The number of fully managed take ons is a very important figure, to make sure you maintain your fully managed stock or grow your business.
But the MOST important figure in any Letting Agency Business, is the NET number of properties under management after you calculate the number of Fully Managed Move In, less the Fully Managed Vacates… this will solely determine whether your business is GROWING or DECLINING, and yet so many agents NEVER look at this figure…
Once you have tracked these key numbers for a while, you will work out your average numbers you expect and key conversions to, so if you know you normally get 20 valuations each month, and from these you get normally 15 take ons, then you know your conversion rate is 75%, this gives you a benchmark to measure performance in the future and these conversion expectations, should become part of the figures you check.
Next, if you know that 65% of the take on instructions you get from your best lister (or when the owner used to do valuations) are Fully Managed Instructions, then you now have this figure as a bench mark to work on too. The number of fully managed take ons is a very important figure, to make sure you maintain your fully managed stock or grow your business.
But the MOST important figure in any Letting Agency Business, is the NET number of properties under management after you calculate the number of Fully Managed Move In, less the Fully Managed Vacates… this will solely determine whether your business is GROWING or DECLINING, and yet so many agents NEVER look at this figure…
Example
If you have 300 properties under management, on average around 3% of these will vacate each month so lets say 9 vacate this month, If you move in 9 fully managed property (but you also let 6 let only’s) you have not moved up or down in your number of fully managed properties… but if you move in 9 and 12 vacate you have reduced by 3…
So if you want to GROW your agency, you need to SQUEEZE each of the numbers, so for example, do more marketing to get a few more valuations booked, get training on converting more into FM instructions and then make sure your negotiators are FOCUSED and BONUSED on letting more of the Fully Managed properties, meaning we achieve what the business needs.
Make sure you make it fun too, set GOALS, targets for the team, both for individual and group and strive to get those numbers higher and higher, because once those HIGH numbers have been achieved, your team can never say they cannot achieve them in the future… also consider have a “BEST EVER” bonus or reward, you will be surprised what a difference that can make.
This is the first step to building your business plan and taking back control, and our team with work with you on this, but the key to remember that whilst you are focusing on leaky taps and arrears, its difficult to focus on the numbers and performance of your team.