Many hard-working business owners take significant risks and responsibility when it comes to running their companies and having a business is all about producing good economic rewards. Business owners can see such rewards manifest in the form of cash flow profits, capital profits, and tax-free capital gains. However, the real estate industry lacks both capital value and goodwill from real estate activities.
Only a small number of business owners appreciate the enduring value that their systems, processes, and activities create, keeping them from further increasing their capital value. Real estate agency owners should see high capital values as a great asset, and if they lack such values, then they won’t be able to sell their businesses for a good price.
It’s a good thing that many businesses are being sold these days, and many business owners are getting capital profits. An increasing number of corporates have been purchasing real estate offices as they realize the benefits of having long-term value and good consistent cash flow returns from owning either one real estate office or a group of them.
For business owners to set up a business with a positive capital value, they’ll need to achieve both certainty and maintainability of their future cash flow and earnings. The key drivers to achieving such are having consistent regular market share in the area, having low risk on a company’s agents, having the commission split with agents at industry standards, using lead generation tools to provide agents with opportunities, having a structured recruitment and training process, having a diversified stream of revenue, automating processes and bottom-line profitability efficiency, and having strong governance and financial reporting capabilities.
Business owners must have a plan to implement these drivers if they want their real estate businesses to run smoothly while having superior profitability and cash flow returns when compared to competitors. When there are achieved, their real estate businesses would be worth more than what it was initially. For more information, see this infographic by Bentleys Auckland.
This Infograph is shared here after legal permission from Bentleys Auckland