“The accomplishment of an aim or purpose.” That’s the dictionary definition of success. But when it comes to your business, what does that really mean? Is it whether you made more money than last year or that you sold more properties? Or could it be whether you achieved a personal goal such as spending more time with your family?
How does your business stack up against these metrics?
Number of enquiries
It will always feel like you’re doing well as a business if you’re arriving every morning to a good number of email enquiries that have come in overnight. And it’s a great sign that you are doing the right things to attract people’s attention. But enquiries don’t necessarily mean money. For that, they have to convert into sales. In fact, poor quality leads, perhaps those from people who aren’t yet committed to buying or who are not sure what they want, can actually lead to a lot of wasted time.
So perhaps it’s not all about the number of leads you are getting, more the quality of those leads. After all, one solid lead that quickly turns into a sale is worth more to you than ten terrible ones.
Once you’ve received an enquiry, your goal is to convert it to a sale. Measuring the number or percentage of enquiries that you manage to convert can be a good indicator of the success of your sales techniques. Focussing on ways to turn even more enquiries into sales can quickly lead to a boost in your turnover with no additional marketing effort required at the top of your sales funnel.
Average sale price
By tracking the sales price of the properties you sell, you’ll be able to look at patterns over time. One useful statistic is to calculate your average sale price weekly or monthly. If this is increasing, you can be confident you’re making more money even if you haven’t increased the numbers of customers that you’re selling to.
A classic indicator of business success, if your total sales figures are rising you’re obviously doing something right. But it’s worth digging a little deeper into the numbers to find out what’s driving the increase. Are you selling more properties? Or are you selling at higher price points? Are you seeing a sustained increase across time or have you just had one particularly busy month?
The thing to be mindful of, when you’re looking at your total sales figures, is that this doesn’t necessarily represent the money going into your back pocket. Without some careful calculations it is perfectly possible to sell more but end up less well off.
Following on from the last point, to determine how much money you’re actually making on a sale you need to calculate your profit margins. That is, the money that’s left over once you’ve accounted for all outgoing payments and expenses. One indicator of success could be increasing those profit margins, perhaps by reducing your expenses. That way for each sale you make, your share of the money will be greater.
Being aware of your profit margins is vital when it comes to negotiating sales commissions as you must be sure you’re working for an amount of money you’re happy with. Allowing those profit margins to fall too far will eventually result in an unprofitable business.
New markets won
If you’ve been following our market insight you’ll have seen that our data shows some emerging international markets that are worth investing time in. The Dutch, for example, are the fastest rising nationality in terms of house sales in the last year. So, perhaps your aim for 2018 was to enter new markets in an attempt to spread your interests and not rely so heavily on British buyers. If so, how did it go? How many different nationalities of customer did you work with and how was the experience?
There are plenty of different ways that you can choose to measure your business success. In the end, the right ones for you might well depend on what it was you set out to achieve in the first place.