Recapping Episode 3 of ProfitCoach’s “Operationalizing Profit Series”: How to Architect Growth as a PM

Growth happens when you start to connect a framework of “process, measurement, and prediction,” which all work in tandem.

In episode three of ProfitCoach’s “Operationalizing Profit Series,” a collection of webinars about moving from financial fog to financial clarity, a team of experts from the property management space got together to discuss growth forecasting. The team included Jordan Muela of LeadSimple, Taylor Haas of RPM Colorado, Daniel Craig of ProfitCoach, and, me, Jeremy Pound, from RentScale.

So, without further ado, here are some killer insights pulled from our talk that will help you reconsider your growth strategy in 2024.

Part of architecting growth for any property management company is recognizing the components that need to be part of the strategy.

According to the 2022 NARPM Financial Benchmark Study, the average profitability in the property management industry is 11%, but the top 25% of performers average 32%. What’s that gap all about?

One big reason is the lack of a solid process. It’s actually pretty easy to focus your time and energy on things that don’t create the most value. Consider that 20% of what you do creates 80% of your company’s value. What’s making up that 20%? That is something you need to know and track.

It can be hard to answer, though. For property managers (PMs), it can be difficult to have a real-time connection between day-to-day processes and value creation, which ultimately improves bottom-line financial performance.

Strategically operationalizing key processes in your business is what’s going to bring growth.

Right now, the average single family property management companies nationwide are adding       an average of seven new units per month, with top performers averaging 15 per month. That may sound low, but it’s not necessarily. Remember that the business you already have might bring in a lot of revenue – ours is a recurring revenue business, and it’s not helpful to continuously think “I need new leads, now.” (More on that later.)

Your business’s goal may be to increase that monthly number of doors. And, some people are cracking the code, adding 25+ new units every month.

How are they reaching those kinds of goals? With a key formula.