If it's measurable, it's manageable
Establishing value should be easy right? I've long loved the adage "If it's measurable, it's manageable" - many aspects of business and life fit neatly into this cliche. Need more revenue? Increase your sales. Are your jeans too tight? Lose some weight.
Establishing a Return on Investment
But what about measuring a return on investment in yourself? nReal works with small-scale Property Developers & Investors, recognise their strengths and passions while helping fill the gaps. How do you go about measuring the RoI on that?
What's your time worth?
The first thing is to know what you are worth per hour of work. I disapprove of the time-for-money formula, but it's a useful metric when working on your business. Once you know what an hour of your time is worth, you can calculate what tasks to do yourself, what tasks you should outsource or inspire others to do for you.
How to go about that is a discussion for another day. But once you know this figure, you have a benchmark against which to measure your RoI.
nReal introduces systems, methodologies and professionals to boost a client's existing resources. These aim to magnify the RoI on your hourly rate by decreasing the amount of time you spend or improving your return on that time.
An immediate (and measurable) RoI utilises our PropTech partner's platform when carrying out due diligence on a potential site. Let's say on average you spend 20 hours initially assessing a site. If you worked out your hourly rate to be £50, your desktop study cost you. So:
20 x £50 = £1,000
Return on Time Invested
But by using a methodology or PropTech tool through nReal's APEx or Etc programs, you can do that work in one-tenth of the time (or two hours):
2 x £50 = £100
ROTI (Return on Time Invested)
ROTI = ---------------------
Using the little formula above, your ROTI for the example above is 18 / 2 or 900%
But better yet, you saved 18 hours, equivalent to potentially earning £900 with that time deployed on higher ticket activities.
Granted, this is a simplistic example, but you get the point.
Other returns on investment
Applying the same principle to any of our other professional partners (for funding or tax advice) and your RoI can be much higher.
Through our FinTech partners' platforms, a client can search more than 100 lenders, better still, we're able to feed in client-specific criteria. Utilising this tool saves hours and hours, and usually, we're able to apply a single application against multiple lenders; providing a vast ROTI.
If using nReal's resources saves time, consider what using them could do to your interest rate. On a £1,000,000 loan (a bridge, for example), each percentage point our partners save our client is an additional £10,000 on the bottom line. That is a measurable RoI.
Through our Property Tax Advisory partner, again, nReal offers a tangible RoI. For example, a developer acquired a B1 site with Permitted Development rights to convert into 31 residential apartments. Reviewing the purchase a relief was available (more than 41 reliefs exist to be aware of) reducing the SDLT liability by nearly £30,000.
nReal and return on investment
We think that nReal gives a good return on value in other ways too. With Lockdown v1.0, I decided to build nReal's business on a more reliable platform and formalise and add value to our original business model. Applying a zeal for effective (versus efficient) methods and systems and an excellent network, we have opened new avenues for nReal and clients alike. As we say "Connecting people has real value".
Perhaps harder to measure, nReal establishes repeatable systems & structures, from funding models to project modelling. Aside from those already mentioned, we introduce a network of professional partners to fill the gaps in our clients' skill sets.
Combined, we enable developers & investors to deliver better outcomes through our APEx & Etc. Programs, helping our clients' leverage time & resources to make the most of opportunities.
It's not just your business that can grow
It's been a steep learning curve and enriching experience. And it's not possible to work on one's business without working on oneself at the same time. I have had the double-whammy of joy, growing my business and our clients' businesses. I've also witnessed the growth of people - clients & me alike.
As the late, great Jim Rohn once said "If you work on your job, you'll make a living. If you work on yourself, you'll make a fortune."
Other benefits of having an adviser on board
- Effective use of TIME - if your advisor has helped you focus your systems and methodologies, you will find your time is spent more effectively, giving you a better ROTI. A bonus is you're likely to find yourself less overwhelmed and even with free (!) time; freedom comes from discipline.
- The satisfaction of FOCUS - if you start to work on a clear vision with your adviser, the experience of clarity will add to your quality of life. Imagine how each day would naturally unfold with a clearly defined "Why" to work towards.
- Leveraging your MONEY - if the processes and systems introduced by an advisor bring quicker results than if you'd spent days or weeks trying to find the solutions yourself, then that's an opportunity cost, and your money is working harder and quicker.
- Credibility in your field - if you're able to stay calm, think clearly, and make constructive progress, you are not the only one who'll notice. But continue to muddle along, be nervous about decisions, or lose your nerve, and you'll lose respect, money and opportunities.
- Recognising what is important - by focusing on what you're passionate about and is vital to you, will probably make you a better person. The very act of removing (outsourcing) that which doesn't bring joy, just stress, in itself has a powerful, if intangible, RoI.
Identifying and acknowledging the tangible and intangible is what separates successful property professionals from the average. Knowing that you are only as strong as your weakest link and that can very often be you, takes a very confident kind of person.
The value of an advisor versus the cost
Investing in an advisor to help you grow your business can see real growth of your business and you too. Every Property Professional is different; their experience, enthusiasm, and focus are unique. Recognise this and adapt your business to complement, not conflict, with your passion.
Founded by Michael J Christian, Novo Real is a real estate consultancy working with early-stage developers & investors, to leverage their time & resources and make the most of their opportunities. Our APEx & Etc. Programs are ideal for clients who want to grow but are time-poor or lack resources and structure.