How do you know how your business is doing? §
The equations below gives you three hypothetical maxes §
- 5 new customer per month / 10% churn
- What is the maximum number of customers I can have? 50
- This tells me at this rate 50 is the maximum number of customers I can get
- I would need to increase the number of customer I get per month or decrease my churn to grow the business
- If you have more customers than the theoretical max, you will be losing customers in the future
- 1000 is the average revenue per client and 20% leave every month
- This tells you how much each customer is worth? $5000
- This helps you know how much to spend on marketing to get a customer
- LTV = price*margin/churn
- 10k of new business every month, losing 10% customers monthly
- How much can I make per month? 100,000
| Inflow | 5 | 1000 | 10000 |
|---|
| Outflow | 0.10 | 0.20 | 0.10 |
For real estate: §
- How many leads did you get this month
- How many leads signed a contract
- How many deals can an agent handle at one time
- Cac
- How much do you spend on marketing every month
- How many leads do you generate every month
- How many leads complete the transaction within one year
- Formula (leads/competed transactions) / monthly marketing costs
- Agent count
- Under contract
- Closed transactions
- Average listing price, average buyer price
- Average commission %