managing with metrics – what numbers can tell you about your business eric wetherington...
TRANSCRIPT
Managing with Metrics – What Numbers Can Tell You
About Your Business
Eric WetheringtonDirector/Broker
Carolina One Property Management
Are You Measuring Your Business?
• Budget• Basic Tracking• Advanced
Tracking
“The great majority of people are ‘wandering generalities’ rather than ‘meaningful
specifics’.
The fact is that you can't hit a target that you can't see.
If you don't know where you are going, you will probably end up somewhere else.
You have to have goals.”
― Zig Ziglar
Objectives
1. What Are Metrics?2. Why Should I Measure Anything in My
Business?3. What Should I Measure in My Business?4. What Can I Do With Numbers Once I Am
Measuring?
What Are Metrics?
Standards of measurement by which efficiency, performance and progress
can be assessed.
Businessdictionary.com
Performance
$3,000,000,000
50%
Progress
Why Measure?
“Measuring business performance will keep you focused on the strengths and weaknesses of your business.
When you know where to focus your attention, you can use specific problem solving techniques and decision
making tips to help minimize areas of weakness.”
Kris Bovay
What Should I Measure?
Actionable
AccessibleAuditable
The Basics
• Applications Received• Applications Approved• Move Ins• Move Outs• New Managed Units
• Total Units• Occupied Units• Occupancy Rate• Vacant Units• Rent Collected• Average Rent
What Can I Do With Basic Numbers?
30% decline in net income
4.1% decline in US same store sales
• Simplify menu• Drop low-selling items• Give more regional control to add menu items
Big City Property ManagementRent Collected 2013
The Basics
• Applications Received• Applications Approved• Move Ins• Move Outs• New Managed Units
• Total Units• Occupied Units• Occupancy Rate• Vacant Units• Rent Collected• Average Rent
Avg. Monthly Rent$1,308.53
Total Monthly Rent$1,461,630.07
Portfolio Name Unit Name
1829-602 Dogwood Rd 1829-602 Dogwood Rd
183 Decatur LLC 183 Decatur Drive
186 Smith Street LLC 186B Smith Street
186 Smith Street LLC 186A Smith St
186 Smith Street LLC 186C Smith Street
197 Decatur LLC 197 Decatur Drive
233 Little Oak LLC c/o Michael Oshaughnessy
2393-2L Folly Rd
318 Deep River, LLC. 318 Deep River Road
414 Decatur Dr LLC 414 Decatur Dr
6794 Amberlake Dr LLC 6794 Amberlake Dr
Showing Rows: 1-10 of 1117 •
Edit Del Go to Report
Advanced
• Revenue Per Unit• Compensation Per Unit• FTE’s Per Unit• Marketing Expenses Per
New Unit• Operating Expenses Per
Unit• Profit Per Unit
What Can I Do With Advanced Numbers?
2014 2013 2012 2011 2010Revenue Per Unit 159.10$ 154.22$ 163.31$ 145.10$ 138.13$
Compensation Per Unit 61.50$ 54.25$ 49.90$ 49.03$ 51.26$
Operating Exp Per Unit 24.78$ 23.72$ 24.14$ 18.68$ 20.93$
Profit Per Unit 28.17$ 31.43$ 31.82$ 19.71$ 5.55$
Project
Big City Property Management has an opportunity to take on a new customer and add
100 units to its portfolio.
Should you take on this new customer?
Why or Why Not?
Project
Average Metrics of Big City Property Management
400 Units Managed
• Rent $1,000• Revenue per unit $150• Compensation per unit $75• Operating Cost per unit $65• Profit per unit $10
Big Name Investor, Inc
• 100 units (avg rent $750)• 25% discount off
management fee• Expect weekly calls and daily
reports• Maintenance performed by
their crew only
What we trackCompany Frequency Why We Track How We Track
Revenue every 5th business day compare trends over previous month and year and real-time decisions input revenue into '5 day' reportTotal units managed monthly build growth trends and budgets for following years CountTotal Occupied Units monthly build trends for occupancy rates CountTotal Vacant Units monthly keep awareness and take action if to many CountAverage Rent monthly compare new units against average Take average of rents of all unitsRevenue per unit managed quarterly looking for increasing trend year over year Total managed units over period then divide by revenue over same periodOperating Expenses per unit managed quarterly looking for decreasing trend year over year Total managed units over period then divide by operating exp over same period
Compensation per unit quarterly looking for steady or decreasing trend year over year Total managed units over period then divide by compensation exp over same period
Profit per unit quarterly looking for increasing trend year over year Total managed units over period then divide by profit over same periodNew managed units monthly See if goals being met CountNew Applications monthly Goals and revenue forcasting CountMove Ins monthly Forecast revenue and staffing needs CountLost units monthly See how many/why owner left us Count and report reason
MarketingAvg days on market monthly Compare our success to competitors and market MLS dataNew units per Business Dev Mgr monthly To verify individual performance CountNew leases per Leasing Agent monthly To verify individual performance CountReal Estate agent who referred client monthly To reward agents for referrals and give property back to agent at sale Notate referring agent in system
Property ManagementDeliquency per PM monthly Effective collection by PM Report from systemEvictions per PM monthly Effective dealing with problems Report from systemLost units per PM monthly Customer satisfaction with assigned PM CountNew Applications monthly Goals and revenue forcasting CountApproved Applications monthly Application process refinement CountLease Renewals monthly Tenant satisfaction and rent increases Count
01/14 02/14 03/14 04/14 05/14 06/14 07/14 08/14 09/14 10/14 11/14 12/14 TOTALGross Real Estate Commission
Total Income 192,710 201,536 214,248 219,358 228,729 228,377 235,973 236,786 222,768 219,268 213,047 218,452
Commission Paid to AssociatesTotal Commission Expense 34,316 36,026 39,025 40,023 40,906 41,521 42,389 43,263 40,550 39,654 38,137 39,291 475,103
Company Dollar 158,394 165,510 175,223 179,335 187,822 186,855 193,584 193,522 182,217 179,613 174,911 179,161
Office Marketing Subtotal: Office Marketing 1170 1170 1170 1170 1170 1170 1170 1170 1170 1170 1170 1170 14,040
Company Marketing (Allocated) Subtotal: Company Marketing 1,761 1,761 1,761 1,761 1,761 1,761 1,761 1,761 1,761 1,761 1,761 1,761 21,132
Total Marketing 2,931 2,931 2,931 2,931 2,931 2,931 2,931 2,931 2,931 2,931 2,931 2,931 35,172
Information TechnologyTotal Information Technology 2,018 2,018 2,018 2,068 2,068 2,068 2,118 2,118 2,118 2,168 2,168 2,168 25,117
CompensationTotal Compensation 85,841 87,485 90,466 92,028 93,963 94,652 96,423 97,237 95,761 95,691 95,278 96,899
Operating CostsTotal Operating 19,648 21,665 20,086 20,162 22,725 21,094 21,218 20,703 20,043 20,923 21,066 20,059 249,391
Total Selling & Operating 110,438 114,100 115,501 117,189 121,687 120,744 122,690 122,989 120,853 121,713 121,443 122,057 1,431,403
Preliminary NOI 47,957 51,411 59,722 62,146 66,135 66,111 70,894 70,534 61,365 57,900 53,468 57,104 724,745
Admin Allocation 9,862 9,862 9,862 9,862 9,862 9,862 9,862 9,862 9,862 9,862 9,862 9,862 118,345
Profit / (Loss) 38,095 41,548 49,860 52,284 56,273 56,249 61,032 60,672 51,503 48,038 43,606 47,242
Net Earning 19.8% 20.6% 23.3% 23.8% 24.6% 24.6% 25.9% 25.6% 23.1% 21.9% 20.5% 21.6%
Total Units 1255 1269 1285 1302 1318 1331 1340 1356 1371 1386 1398 1411Occupied Units 1117 1129 1144 1171 1186 1198 1220 1234 1248 1247 1258 1270Move Ins 47 55 70 72 75 77 79 82 65 60 50 55 787Applications 100 120 125 125 190 150 190 150 100 100 90 95 1535New Units 45 52 53 54 40 31 52 47 48 40 41 37 540
Budget Worksheet
A Wandering Generality
or a Meaningful Specific?
As a result of attending this session…
What are two things I am going to start doing or stop doing
when I get back to the office?
Contact Me
Eric Wetherington
Carolina One Property Management4024 Salt Pointe Parkway
Charleston, SC 29405