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Growth vs Profit: Debating w/ a Marketer, Operator and CPA

Growth vs Profit: Debating w/ a Marketer, Operator and CPA

Today we’re taking the Profit vs Growth head on in a lively debate between a marketer, a CPA and a growth minded property management entrepreneur. Should you focus on doors, dollars, EBIDTA? Check out this royal rumble with Alex Osenenko, Greg Crabtree and Brad Larsen on Profit versus Growth.

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Topics covered:

  • (01:30) – Importance of Profit
    • (02:13) – Greg discusses having no profit at the end of the year
    • (02:51) – Greg walks through an example of a Build to Sell Model
    • (03:41) – 3 Plays of Business Groups
      • (03:44) – “Run to Harvest” Play
      • (04:09) – “Harvest to Premium Sale”
      • (04:50) – “Build to Sell”
  • (05:31) – Taxation and Zero Profit
    • (05:35) – Brad questions the tax liability of making 0 money.
    • (05:50) – Greg explains how an accountant approaches taxes
    • (07:18) – Alex gives his take-away from Greg’s book
  • (08:05) – Greg provides the “Magic Pixie Dust” of business Growth
    • (08:26) – Greg gives background on origins of books
    • (09:06) – Return on invested Capital
    • (09:57) – Alex and Greg discuss returns
    • (11:34) – 4 Components of Capital
      • (12:35) – Launch Capital
        • (14:13) – Greg gives some background on accountants and Profit and Loss
        • (16:15) – Earning a return
  • (18:45) – Accountability and Profit
    • (19:36) –  Questions for Growth
    • (20:53) – Example of Balance
  • (21:48) – Profit vs Growth
    • (22:11) Brad discusses balancing growth revenue and profit generation
    • (23: 13) Alex discusses his method
    • (25:59) Jordan discusses maintenance and money from brokerage and accountability
    • (27:39) Greg touches on the importance of accountability with growth.
  • (32:00) – What playbook are you running?
    • (32:28) Build-to-Sell is not right for the majority of entrepreneurs
    • (32:51) – “How do you learn to be an entrepreneur?”
    • (34:56) – Why do many property management companies only run a 6-8% profit margin?
    • (35:40) – The future of technology in business
    • (40:05) – Biggest capitalization risk for a property management company
  • (41:19) – At what point does staff for growth come in to play?
    • (42:50) – Brad talks about staff for growth in flatline companies
    • (43:15) – Staff member cost vs Adding Fees
    • (43:48) – Fee Maxing vs Value/Relationship Maxing
    • (45:00) – Employee value, Profit and growth
    • (48:28) – Pattern Learning
  • (50:35) – Where should we be in profitability? (51:15) Target Profitability Margin
    • (52:18) – The top 25%
    • (54:48) – Real Estate is cyclical
    • (56:50) – Growth is CBU as well
    • (57:40) – Summary of discussion
    • (58:30) – Closing

Resources Mentioned: 

Greg Crabtree’s Book: Simple Numbers, Straight Talk, Big Profits

Where to Learn More: 

Come and join us at the PM Grow Summit in Austin 2019!