Knowing your numbers is fundamental to understanding the Health of your Business, and to being able to make good decisions. It’s even more important as you scale and become less involved in all areas, so that you can keep a beady little eye out for if things change / stop working, so that you can take quick remedial action.
BGI’s are different to KPI’s. Generally BGI’s will be numbers that get larger over time, where as KPI’s are more likely to be a static number. In fact a BGI can actually become a KPI over time…
Some examples of BGI’s could be…
1 – Size of portfolio 2 – Monthly net profit 3 – No of viewings this month 4 – No of deals analysed this month 5 – No of offers this month 6 – No of deals in the pipeline 7 – No of deals agreed this month 8 – No of investor meetings this month 9 – Amount of investment raised to date
…Just examples and will really vary depending on what your business model is and where you are at in the life-cycle of scaling this up. It might be at the moment that you don’t have enough deals, because you aren’t doing enough viewings or analysing enough deals… so you could have ‘No of Viewings this month’ or ‘No of deals analysed this month’ as a BGI. Over time doing the right number of viewings or deal analysis becomes normal. Then it can become a KPI. This could be a KPI for you or another team member.
The more you step back from the business the more important it is to know your numbers (and ensure you have systems in place that regularly deliver these numbers to you). These numbers will indicate where the business is either running smoothly or not, so that you can take decisive action to sort it out.
We’ve recently started measuring Actual Monthly Turnover (AMTO), compared to what we’ve called ‘Max Available Turnover’ (MATO). So that we can see how much rental income came in, compared with what we know is the maximum available income that we could generate from those properties. So essentially this gives you the cost of your inefficiencies – sometimes it’s easier to streamline the costs of your inefficiencies rather than just do more deals!
So it’s all about the AMTO vs. the MATO in the Tomes Homes world right now (I never said we were cool!!)
So what are the key numbers for you to measure?
Pop your details in below to receive our Property Strategy Insights