About Peter Mueller

CEO of The Profit Centre

How to Triple Profits Without Raising Fees

This month, Peter Mueller, CEO of The Profit Centre, and Carlos Matias, CEO of GryphTech and Creator of iBroker, held a popular Broker webinar to share what every broker needs to know about running a profitable business. Leveraging decades of industry experience, they discussed how to analyze financial and operational metrics to effectively inform business strategy and how to implement a killer strategy proven to increase profitability.

WATCH WEBINAR NOW

Benchmarking Profitability - Profit Centre and iBroker Webinar - goibroker.com
Watch and learn:

  • How you should define business profitability
  • The most important metric of your business
  • How your brokerage compares relative to your peers
  • The Killer Strategy – How we tripled profits without raising fees
  • How the right software choice can boost profitability

 

“Gross Profit Per Realtor (GPPR) is THE most important metric of your business.”

Are you tracking this?
If not, watch the webinar to learn why you should.

For more information on The Profit Centre, call 1.877.509.2330

The Dangers of Erroneous Reports: Understand How Your Data Was Derived & Interpret It Correctly

How Clean is the Data Upon Which You are Basing Decisions?

In order to run a profitable Real Estate Brokerage, one needs to know and truly understand the metrics involved in running one’s business.

At the Profit Centre, we strongly believe that THE most important metric in the brokerage business is Gross Profit Per Realtor® (GPPR). It is instrumental in defining your Gross Profit per Realtor® Objective (GPPRO), a fundamental business metric.

Through my experience working with over a thousand brokerages in varying capacities over the last ten years, the ability to access key information and more importantly clean information is critical in making sound financial and operational decisions.

As part of our service offering, we often recommend complementary services that are necessary in order to operate at a high level. One of these is iBroker by GryphTech, a powerful back office management solution. We highly recommend iBroker to provide the clean foundation necessary to create profitability.

Over the years I have come across several glaring errors and erroneous methods in other back office management software that have derailed a broker’s ability to manage and operate his/her business effectively. The risks are high, and it is important to have a solid foundation to work from to be successful and profitable. Continue reading

8 Key Metrics Every Brokerage Should be Tracking for Revenue Growth

When it comes to business planning and measuring performance, real estate brokers often focus most of their effort on developing the sales side of their businesses. Revenue growth, albeit a very important metric, is only one indicator of overall business performance. There are other key metrics that should be tracked ongoing to effectively inform business strategy and be set up for long-term success. For some, this can be an overwhelming process as they are unsure what to track and how.

Profit Centre 8 key metrics for Revenue Growth(Download Infographic)

At The Profit Centre, we help our customers understand the value and importance of tracking 8 key metrics. These are the 8 key metrics every broker should be tracking to make effective business decisions. Click the preview image below to download the Infographic. For more information on how to effectively track these financial and operational metrics, please call Peter Mueller at 1-877-509-2330.

GPPR – The Most Important Metric of Your Brokerage and Why It Can Be Elusive

Gross Profit per RealtorIn order to run a profitable Real Estate Brokerage, one needs to know and understand the metrics involved in running one’s business. One of these metrics, which we consider to be the most important metric, is the GROSS PROFIT PER REALTOR (GPPR) metric. This metric is critical to obtaining your Gross Profit per Realtor Objective (GPPRO).

GPPR

Gross profit can be defined as the profit a company makes after deducting the costs associated with providing services. In the broker’s case, it is the service from providing the framework from which realtors can facilitate their sales. Once this cost is deducted from the Gross Commissions, then the brokerage’s financial health is revealed by the proportion of money left over from revenues after paying out sales associates.

Gross Profit is the revenue a brokerage has available to pay for the day to day operations. On a typical income statement the Gross Commission Income generated is identified on the top line and the Cost of Sales is deducted (the money paid back to the realtors) to determine the Gross Profit. For many this number zeros out and the brokerage makes money from the desk fees, transaction fees and percentage fees.

The GPPR is achieved by clearly identifying the gross profit for the company divided by the average number of realtors in a 12 month period.

The challenge that exists is what we at The Profit Centre call the pollution in the numbers. This occurs when blending Flow Through Income and Gross Income together in one general ledger (GL) item.

Flow Through Income

Flow through income is the revenue that is collected on behalf of a 3rd party such as regional fees.

This can be better understood through an example:

Broker A wants to earn $12,000 in Gross Profit per year and blend in $3,000 in Flow Through Income a year. Typically the realtor is offered a 70%/30% split until the broker nets $15,000 or the realtor achieves $45,000 in Gross Commission Income.

When that realtor closes a sale the revenue gets posted into your back office software as percentage fee income.

The problem exists because the two revenue types are not separated out. A second problem exists for that realtor that does less than $45,000 in Gross Commission Income within the contract year therefore complicating matters even more.

If Gross Profit Per Realtor is the most important metric of a brokerage and that critical number is polluted than how is it possible to set clear targets and measure your results properly.

Taking the time to analyze and identify your revenue with clarity is the starting point for taking control of your business.
We know how to separate these 2 types of revenue in order to give you a clear and accurate picture of your financials.

At The Profit Centre, we can help clarify these issues in order for you to take control of your business.