For as far back as any of us can remember estate agency has been a business that requires more people in order to scale up. You open a branch fill it with the usual suspects and then if successful move to another area and repeat demonstrating our success by talking about how many branches or staff we employ. Whilst that model has worked in the past, investors and modern business no longer work this way and have no interest in that type of business but instead specifically look at a company’s Revenue Per Employee metrics (RPE).
Not understanding and constantly measuring the RPE metric is the main reason that a business owner may shrug their shoulders at technology or invest in the wrong tech and continually tell themselves it is a people business but equally stay in the endless loop detailed above.
Of course, currently estate agency is a people business for most of the really important aspects of it. Talking to new sellers and landlords, helping buyers and tenants and having empathy etc. But why do we take our employees away from these human based tasks in order to give them admin tasks? The key metric you are missing in your company in order to break this loop is Revenue Per Employee (RPE) and it is the way off of the hamster wheel you are currently on.
Let me give you an example to explain... Imagine your current revenue is 800k pa and you have 10 staff - your RPE is 80k. You may feel you are working effectively but imagine for a moment that you had to do all forms of your accounting by hand on paper. All property matching became a manual process done by post and all properties needed to be uploaded to your website and portals one by one - would you be more or less productive? Would you need more staff to cope? Would you miss out on more opportunities due to the increased workload and not being able to do as many meaningful tasks? All of this would result in less revenue and more employees. Therefore, when you divided your revenue by number of employees it would be lower. So instead of 800k your revenue falls to 600k but your staff numbers go up from 8 to 12. Your new RPE would only be 67k. Making you far less profitable.
Now bring yourself back to how things are today and your currently RPE of 80k and imagine for a moment that you could find a system that would take care of significant amounts of administration work which you currently just see as ‘normal’ for instance, automatically qualifying all of your enquiries. Automatically sending out your newsletter each month. Automatically letting your team know who to call and when, based on their web activity and so on... Now in the reverse of what we looked at before your team should be able to work more efficiently and, on more revenue based tasks. Therefore, your revenue not only goes up from 800k to £1m but your staff numbers drop from 8 to 6. Giving you a new RPE of 167k!! Over double what it was to start with. This is the key metric you need to focus on in order to break your vicious cycle.
Improving this critical metric in a business is what Lifesycle was built for and it is having a profound effect on estate agents all over the country. Regardless of the size of your business from one office upwards, if you are interested in having a chat to see how, please book in for a discovery call and we would be happy to show you.