
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.
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
- (12:35) – Launch Capital
- (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!