Take the 20X test!

Do you own a real estate business that’s NOT making money. Take the 20X test!

Written by John McTavish – Specialist Real Estate Business Coach

Here’s a quick test to diagnose the problem.  Take your yearly rent and multiply it by 20. Now compare that figure to your gross income. If the income is greater you have an expense problem. If the income is less then you have a production problem.  Now this might not be a perfect analysis 100% of the time and its always wise to get an outside expert in to help if you’re losing money but you would be amazed how accurate this rule of thumb is.  And while we are on the subject of profitability did you know that the majority of real estate business owners who concentrate on controlling costs go out of business WHY? – because what we focus on is what gets our time and energy and so by focusing on NOT spending money the business spirals down and down until there is nothing left.  Smart owners focus their attention on their team and making sure the attitude in the organisation is positive and happy.

A good business coach can show you how to make this happen while putting into place procedures which automatically restrict expenditure to predetermined levels. Take the temperature of your business right now.  Is it a happy place to be – are your people smiling all the time and giving generously to all around them.  If not then maybe you need to take a quick look in the mirror. Without exception every problem I have seen in the hundreds of offices I have worked comes down to leadership.