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Luke Richardson
Every business needs to know its bottom line but real estate businesses have their own special needs. Many real estate business owners come to ownership from a sales background and learn financial skills along the way through trial and error.
Many business owners cannot afford to hire experienced high quality internal accounting staff due to scale yet their tax agents and accounting firms have limited experience across the real estate industry.
This was the driving force behind the need to create an accounting firm within the Ray White corporate team that could advise business owners around their financial metrics and how to achieve profitable sustainable growth.
As in many areas of our group, our people are our competitive advantage.
The White family’s investment in its profit team over the last 10 years means we have developed a team of accountants that truly understand real estate agency operations.
The team of experienced certified accountants based in Brisbane, Sydney, Melbourne and Auckland service the entire Australia and New Zealand network. Our accountants consult with our business owners and high performing agents alike regarding agency financial performance, profitability metrics and benchmarks, forecasting, staff remuneration, funding and succession planning.
The team also looks after the monthly accounting processes (such as payroll, creditors, BAS and reporting insights) for 60 clients and counting.
The secret beauty of the profit team has been its ability to create an Australian Profit Benchmarking Report, which gives Ray White members an edge to track their business’ performance.
No other group has such a view over its network’s profitability and the like-for-like office metrics from the 2021 report were incredibly insightful.
Ray White agents’ productivity and earnings increased by 30 per cent in 2021, and these excellent market conditions resulted in our business owners achieving an average profit margin of 18 per cent from their sales business (excluding principal sales and property management).
The group’s property management rent rolls maintained a 21 per cent profit margin in the year but the real positive was how many sales came from the rent rolls. This saw gross losses increase however the business as a whole was better off for the sales.
Interestingly, fixed overheads or ‘desk costs’ increased in dollar terms but dropped to 18.5 per cent of revenue which meant three per cent fell to the bottom line.
These benchmarks provide great insights for all Ray White business owners and help drive growth and improved financial results for all our owners.
Luke Richardson has more than 26 years experience as an accountant. He qualified as a chartered accountant in 2000. His team was born out of the GFC, when Luke spent his days helping franchisee owners navigate tough financial decisions. With the family’s backing, the Profit Team was created at this time and has quickly become one of the fastest growing specialist teams at Ray White ever since.
