A real estate business should target 70% gross profit while scaling. Allocate under 10% to salaries, under 10% to marketing, and 30% to agents. The goal is 40% profit before taxes on a multimillion-dollar business.
Approximately 70% gross profit.
Less than 10%.
Less than 10%.
About 10%.
Up to 30%.
Our model is very we're trying to get as close as we can to 70% gross profit even as you scale. And you know, we want to be less than 10% salaries, less than 10% lead generation or advertising, marketing and depending on if you have a physical location and a broker, 10% for all of your other general administrative expenses. So really we're looking for spending 30% max on agents to do all the production and then another 25, 30% on the cost to run the business, the overhead, the expenses that are listed here. So that's kind of the overall model that we're following and that leads to a fully leveraged, fully built out multimillion dollar top line business that has the 40% profit before taxes that we're looking for and getting there along the way, that's where your percent margins will be diluted but your overall dollars will be more because you're selling more but you're doing less of the production yourself.
