Why A Team Is Important For Your STR Business

So welcome along to the Boostly podcast. This is the podcast that gives hosts the tools, the tactics, the training and most importantly, the confidence on how you can go out there and get more direct bookings for your business. Easy for me to say. Today we're going to be talking about metrics and all the things within your short term rental business because it is a business that you should or could be tracking. This is something that not everybody does and I'm certainly guilty of it in the early stages to help us do this, we're actually going behind the host with a successful strategy, short term rental host who's based here in the UK and we're going to dive into his business, hear about his journey and the sort of metrics that he tracks. In particular, we've actually got some slides which is why we've gone live on Facebook. So if you're on Facebook, just drop, drop a little message saying where you're watching from, as we love to find out. And yeah, leave. Let me introduce Ron Jansen. He's from12stay.uk so if you want to go and check them out, it's 12 numeric stay.uk he's got 30 doors himself, but has actually has over 100 on his website and we're going to talk about how that works in just a moment. So welcome along. Ron, thank you for joining us today.

Thank you very much, Liam.

So to get started, why don't you introduce your yourself and your business, tell us where you are in the world and anything you'd like to share.

Right, so I'm Ron, I am Dutch and I left the country many, many, many years ago in 85 to be precise. So I'm really bit of a Flying Dutchman because I've been living all over the place and of course right now I am at home and home is in sort of greenish but cloudy Hampshire, Old Hampshire, not New Hampshire.

It's always cloudy in England, isn't it?

Well, yeah, but that's a good thing actually because then you appreciate the fact that it's sunny.

Absolutely. Very true, very true. So what model do you use? And if you could. I love the name, by the way, 1, 2 stay, 1 to stay, which is cool. Talk us through what kind of model you use and why.

Yeah, well, let me go back quickly. So I'm really an IT guy. I like to systemize things. I really think about, let's say, very, very logical structures. And that means, of course, that I always like to see things from a sort of block perspective as Lego blocks. Almost. And that means that anything that I sort of do, it has to hang together in a proper robust fashion. And yeah, I can go back in time a little, maybe not yet, but literally what I like to do is make sure that all the components that are used within the hospitality industry are glued together in a very, very coherent way. And also making sure of course that you keep control if you want to grow, that you, let's say, grow wisely because obviously having a one property that you lived in before, for instance, and you want to rent it out, that's a totally different model than when you run up and scale up to 30, 40 by 100 or a few hundred. And then clearly you have to think much more about, okay, how do the professionals approach it. And then clearly you're looking at a, let's say a Marriott or, or an IHG group, things like that. So that's a totally different approach. But of course it means still you need to have the basic building blocks in place to make sure that everything stays robust.

That sounds fair enough. We will dive back into your background of how you got started in hospitality. But just before we do, in the intro bit we mentioned you've got 30 doors yourself and there's a hundred on your website. Talk us through are the 30 other ones you own or manage and the extra ones on your website. How does that work?

Okay, so back in 17 I tried to manage myself. Problem was that 70 miles away is not convenient. Clearly it means that if there's an issue you have to go up and down. In those days we had an electronic lock August and that was very fiddly. But at least we were able to say to a guest, here's the code, you can enter the flat. However, if something goes wrong, it takes an hour to be there and that's not very practical. Plus of course all the cleaning and stuff like that. It's extremely difficult to do anything like this remotely if you don't have the right people in place on site. Of course, if you're running your own, let's say short term rental and it's, let's say within five minutes drive or several within a, let's say 10 mile radius, yes you can do things, but there are still, you can't really do that much unless you have extra people because if you do it yourself, all of it welcome in the guests. Cleaning, maintenance and there are many, many bits and pieces in the background as well because you have to do your admin that is quite intrusive if you don't give it the Right intention, because you may make mistakes and mistakes on the admin side ramp up. Then you have your marketing, you have your sales, and so it becomes a lot quickly. And so stepping back to the first flat in 17, that was in Woolwich, and of course, another interesting bit is that you think quickly, okay, all you need is a flat. Put furniture in it, put it on Airbnb booking.com, anywhere and it will sell. It doesn't work that way. Clearly you have to do your marketing. Secondly, you need to have your maintenance in place, your cleaning, etc. But then, of course, most people forget, if it's flat, do you have permission from the freeholder to run a business activity? Because after all, it is a business activity. And in this case, it's quite funny. This flat is in a very, very nice block of flats in Woolwich or Arsenal. Very nice development, very modern times. However, the lease clearly says you can't run a business like a short term rental. However, in those days, when you look on Airbnb booking.com you see about 70, 80 hosts in that area. Advertising. Of course, if that's already in breach with the lease, then clearly it's an accident waiting to happen. And so that's a typical example. People just off the cuff start a business, as in, oh, I can do that. But they don't think about the consequences, or let's say the viability long term, which is a typical thing that again, if you don't think about it as a business, how sustainable is it, how robust are the foundation box, then? Yeah, it is risky, to be honest, even if you're having a healthy turnover. And I'm sorry for all the people who are relying on OTAs. Again, it's like you're having a flat with a freeholder who does like this. However, it's not allowed in the lease. If you're running your business and all your bookings are coming in from OTAs and other websites and you're not in control, actually, you don't even get the real contact details unless you're a bit clever about it. Again, you're too depending or too dependent on others. And that's a business risk, to be honest.

Definitely. And to be fair, I mean, it's one of those things which the message from Boostly has been for a while, which is make sure you're not just putting all your eggs in one basket. Don't build your business on somebody else's land, as Mark Simpson says. Yeah, what's happened then, since then? So as 2017 was the first, the first flat. Bring us up to where we are now.

Okay, where we are now. I think it's time to share some slides because that makes it slightly more visual, because it's a bit of a. Yeah, that's cool.

We've let you share the slides and for anyone listening on the podcast, we will. We'll cover what that is. If you're watching on the Facebook Live or If you're on YouTube, you'll be able to see them on the screen in just a moment.

Yeah, very, very simple graph, really. So I'm showing the first four flats that I started with. It is in Chauffeur St Giles. Four flats in a block of 8. Fully cooperative landlord who owns the whole block. And he literally says, okay, how many do you want? And I said, okay, well, first of all, I'm in Hampshire. Charlofont is not around the corner. So that. That's challenge number one. Luckily, I found an operator who was more than capable to do the maintenance, do the cleaning, etc. So that box was ticked. I said, okay, four out of eight seems reasonable. So, literally, I started with four flats, bearing in mind my attempt from 2017, which was also remote. However, I thought, okay, lessons learned. I know much more now than I knew then. So, yes, let's go for it. And, yeah, see how it runs.

Just to double check. Ron. So for people listening, the one in 2017, did that stop because of the lease issues? Was that what stopped that one? Or was it just a case of maybe the wrong place? Did you sort of wind that one up?

Actually, very good question. So when we had our first guest in 17, that was a Chinese student, very polite guy, very nice, stayed one month, not a single issue, apart from smoking on terrace. But, hey, on terrace is fine. Perfect. Second guest, just someone from Canterbury on paper. We forgot, because we are very naive, that it was around Halloween and a few days later when we came in the flat to clean, I think we had about 1500 pounds in damages.

Oh, no.

Lots of messages in the little capsules with sort of laughing gas all over the place and bottles and stains, and it was a nightmare. And then of course you say, okay, let's have a break. Do we really want this?

Yeah. So that sort of put you off back in 2017. So the next question, and I know people will be dying for me to ask, is, you've what. What year is these four flats? What year was this? Was this Same year or 2018?

The four flats? 2021. So exactly two years ago in March.

Cool. And the Question people will be dying to ask is obviously you've then found flats which most importantly bring everyone's attention to it, is that you've got permission from the landlord and the owner, the freeholder of the building. So there's no lease restrictions on it. But how did you find this landlord who was willing to hand over the four straight away? Because there's a lot of people out there who would like to be in that position.

Good question. So in March 2020, okay, so I'm an IT guy and I literally started contracting for quite a lot of companies in 2011. That means that I was traveling a lot all over Europe. And also that meant that you start to accumulate some money. If you're a contractor, it's a sort of a occupational hazard if you like. And so you think, okay, with your money you've got to do something because sitting in the bank is nothing. So I started to buy properties first off plan trading, as in buying off plan and then selling them before they complete. That's one thing. And then of course I started to keep properties. And then you start to get immersed in the property world, as in property developers, all sorts of different people you come across. And then of course I started to extend my network and typically one of the people you bump in much more than usual is developers. And so literally through my network you get to know more and more people who are either buying properties, refurbishing, renting them out, or buying and then sort of transforming them into a short term rental or they literally do it in a whole block and they change it into an apartheid. And so, yeah, networking really get out there 100%.

That's another. I mean this case of your network is your net worth. And this one that we often say here is, yes, that ultimately by putting yourself in those kind of circles, you're going to get opportunities. And you know, that sounds, is exactly what you've done here. So talk us through this, talk us through this slide you've got up here. So for, for people who are listening in the podcast, we've got a slide for short term rental attempt number two. And we're looking at the revenue per calendar month starting from 2021.

Yeah, so literally, because it was only four flats and of course it, it means that you have to pay your deposits so that there's a lot of costs involved in ramping them up, especially your, your deposit, your furniture, because quickly you, you, you spend about 5k a flat just in furniture. So it, it adds up. And then of course you start to do the marketing in those days, again mainly driven by the OTAs. But yeah, it happened. You have to start somewhere. And so that, that was actually quite decent. And so let me move forward a bit. And so about one year later we looked back and in the meantime, which was quite interesting, those four flats, they turned into seven flats for the simple reason that the landlord was happy with the fact that we treated it with as a professional business contrary to 2017. We have cameras everywhere outside. We know exactly what's going on.

Which ones do you use, Ron? Which ones do you, do you use?

We have the ring.

Ring doorbell. Yeah.

It's easy, straightforward and of course that means if you scale literally. I'll explain a bit later how the whole back office is set up and the guys literally have screens with lots of cameras. It's almost like a security center. It's quite good. Yeah. So literally the landlord was quite happy and he said, okay, as soon as there's a, a tenancy ending, you got first choice whether you want it or not. And so literally now we sort of control seven doors out of eight, which is quite good.

Nice. How does the eighth one, how is he? How is that person getting on?

Maybe that person likes different neighbors now and then.

Absolutely. I imagine you'll get the 8th before long.

Well, to be honest, there are so many other doors that I can, let's say, put my hands on.

So that's cool. It's nice where, where things have turned around from wanting the apartments to now being offered, isn't it? It's always a nice time which in short term rental, when you're starting off and there'll be people listening to this getting started and you know, it does come all of a sudden people will turn to you and be offering your doors as opposed to you searching for doors. It just happens. And that happens through good business practice. Exactly what you're saying.

Yeah.

One of the lessons to take away.

Yeah. And of course get yourself out there. Not, not just, let's say your, your specific target group, but as I said in the beginning, be, be kind to people, whatever they do. They can be a cleaner and the cleaner can be a cousin or a good friend of a developer or an investor or anything. So don't dismiss anyone that you think of that person, whatever. It's very, let's say, superficial and long term, not very wise.

Makes sense. That makes sense. And obviously one of the things we're here to talk about is the different metrics that you're tracking. And here obviously you're tracking the overall total Revenue for your units. What other sort of metrics do you track as a business and why?

Yeah, so the key things I track, obviously is the daily rate, because that's a key thing. That's a bit of a dark eye, to be honest, because your daily rate or your nightly rate, it's a typical thing. If it's too low, you're quickly going to be sold out. However, you may not make enough money as you could. And then of course, yes, your occupancy will be 100%. However, you're leaving money on the table on the other side, yes, you can say, okay, I'm going to be the most expensive in the area. In the area. So that means you need to do your market research properly and that can be on air DNA. The you can just pretend to be a guest and go on Google, find properties that are comparable in the area and say, okay, how much do they charge and can I make a difference with my offering? And does it justify a higher price or do I need a bit lower or something? There are many, many strategies. And again, it's a business mindset at that point because then you have to think, okay, what comes, let's say, to mind if you want to sell something at the right price, yes, you can make it cheap, you will sell quickly. However, you don't make the most money if you sell expensive. Okay, if you like a Louis Vuitton or lmha, then yes, you can ask a lot because you have your brand. But if you don't have your brand yet, you can't get away with it. So it's the whole sales and marketing area. It's almost a profession. Well, it is a profession by itself. And so again, if you're a host and you're just having one property, be prepared, you're going to be not a specialist, but you need to be familiar with quite a lot of different areas. And I'm not even talking about bookkeeping, accounting, taxes. That's the whole different world altogether. Especially if you grow, because they have toms and all sorts, which is another area. And so there are so many bits that really touch even one door that most people don't even realize that it's potentially quite complicated if you're not keeping tabs on everything. Yeah, but going back to the, the balancing act, if you like. So literally you need to have a very good understanding of the relationship between occupancy and your nightly rate. And that that's key. And of course, you have your seasons, so that means February, everyone was complaining. Hardly any Bookings anywhere and that was not even in the uk, it was in many more areas and normally, you know already January, February, March is a bit slow and then it sort of picks up and then sort of goes very, very strong until August, September and then it sort of dies down again. Peak in December. Of course that means that you can do some strategic planning around those periods. So don't ramp up a property that is costing you a lot of money in September. That's not very wise. And so I'll show you a chart in a second and literally I'll do it right now actually by the way. So we are now in. So I'm showing a chart and that stops in February 22nd. So that means by then I was controlling seven doors, a healthy turnover and I was literally ready for more. And so what did I do? I took on a full block of six nice along the Thames. Nice place, new building, used to be a pub, typically pub converted into six flats. They were trying to sell it, they were struggled, struggling to sell it. I said okay, fine, would you like to have a long term lease contract, five year, no voids. The rent is almost comparable with what you normally would receive. However, you know, no voids and you don't even pay a letting agent. Yeah, if you want to you can have a letting agent control and check the flat every six months, three months, whatever. But it, so it's certainty for the landlords and that was appealing to them and of course because I had the, it sounds rude the other landlords sort of in my pocket if you like, as in supporting me. And of course I said okay, talk to this guy because he knows what I'm doing and he's happy because he owns, all he does is gives me one flats.

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I'm going to jump in there and just say it's the power of testimonials isn't it, we do it with our guests, so why aren't we doing it with. If you're a management agent or if you're doing, you know, sort of rental arbitrage, rent to rent, that side of things, getting a testimonial from the people you're already providing good value to is just so important. And this is one thing which Mark often challenges people to, which is don't just get a written testimonial. Ask your landlords or your guests if they'd mind to do a little video testimonial. You know, 10, 15 seconds is all it needs to be. And that helps to build a lot of trust with other members. So you've got your first block of 6. What happens then in June 2022?

Yeah, guess what? It's a bit like fleas. Next block. That's typical. You know, people with money, they say, yeah, the beginning is hard, but the next million is easy. And of course, to someone who doesn't even have one property yet, it sounds like, well, yeah, right. But actually, now I speak with, let's say, some. Not authority, but experience. And yes, once you're up and running, but again, it's all about foundations. If your foundations are not right, you will fall over as soon as you start to scale to twig.

Can I ask, was there any worries when you were taken on blocks? Obviously you're committing to probably a chunky lease there in terms of, you know, the. What the monthly rev, monthly costs are going to be. Was there any worries over that or were you confident that the units were going to work and perform and if so, how were you confident?

Yeah, so obviously you do a lot of market research and so luckily I already had the experience of one year sort of running seven flats remotely. And of course, the key is there, you need to have a very, very robust team in place that does the daily ops and they partly do the marketing together with me, and that definitely helps. Then, of course, you say, okay, you're in one area, so if you're going to extend into a next. Is it, let's say, suitable for your avatar and avatar, to be honest, it can be anything that brings in, as I call them, bums in the bed, simply because you need to make sure that whatever your property looks like, it needs to be appealing. For instance, if you want to, if your avatar are contractors, then the first thing contractors want. Sorry, building contractors. I'm an IT contractor. I don't care about a parking space that is high enough for my van, because I don't need a van. But if you're a contractor, then clearly you usually have a van with expensive tools. So you need to offer on site safe parking. And if you don't, then forget it. It's not the right location, it's not the right property. So then you have to think about, okay, is it appealing for another avatar? Maybe corporate clients, but they're not contracts, but maybe more IT guys, project managers, or maybe people who need to relocate from one location to another. Is there a business park nearby? Large companies, internationals, multinationals. And so there are many, many things you can look at. And then of course the question is what, what's the competition? And then you can say, okay, fine, there is no competition. Which can be two ways. Either you can say, okay, there is no market because there's no competition, or you can say, okay, actually it's great because I'm going to be the first one and it's going to be my footprint, my little kingdom. So it really depends on your mindset, really. And of course it's also a matter of what do you really want to achieve because some of them, they are very, very low key. They say, okay, fine, if I have, let's say one guest and if they stay for let's say two or three weeks, that's fine. And I don't mind having a void because I'm making enough money and it's not my main occupation, so to speak. But again, if you want to run it as a business, you need a different mindset. You need to make sure that you are almost at 80, 90% and good, maximized rates. And so yeah, again, it depends.

I definitely want to come on to some of the tools that help you to do that, Ron, but I also want to be conscious of your time and I know you've got some slides to, to show us. So I'm going to let you go through your slides and then after that we'll go back to sharing full screen again and we'll, we'll hit some questions to you after that. So talk us through these, these slides and the metrics of your business.

Yeah, so I'm going to make it relatively quick because if you don't stop me, I'll talk until it's now quarter two, until four or so. It's my, my bad thing. So this is a typical example of what happens if you look at revenue from a seasonal perspective. As I mentioned, you see quite a healthy period in July, August. It's a typical summer months. Now of course there's properties. So the dark blue one that is Charles von St. Giles. That is, let's say, a little north west of Uxbridge, between Uxbridge and the Chilterns. So it's an interesting area because you can literally have many avatars there, especially quite a lot of relocations and also refurbishments. So the orangey one is, or salmon pink is the one in Shepparton next to the Thames. You can see they're almost the same size constantly. It's a typical location for most people go to London from there, but also the Shepperton Studios, Stow Park. So it's a healthy mix between sort of tourism for London, local tourism and business.

That's a really good sign, isn't it, for that? That looks as though staying consistent pretty much around all months of the year, which is so important, having a, you know, a season, a business which isn't a seasonal within your structure.

Very much so, yes. And that's why I like lots of charts and graphs just to make sure that I can see what's going on instead of just numbers, because this makes it almost intuitive. You can see as you, as you correctly said, you can see straight away. Okay, yeah, it is very consistent. And yes, of course, January, February, slightly less, but only a little. And so you really can rely almost on that kind of property. And then of course the brownish or goldish color, that is an interesting one, simply because that is 50 meters from Egham train station. No parking, but you can see it's constant and it's simply because of the location. Agam is half an hour into Waterloo Station. And again, you have a good mix between business and leisure.

It's good. It just goes to show how important location is, isn't it? Because so many people I see especially doing rental arbitrage or rent to rent, if you're here in the uk, they, they basically go out and find one which might not be the best location, but because it's an offer they've got, they're going, yeah, let's just do it. And you're like, no, this, that first one can make or break your business. You know, like it's so important to get that first one right. And so using things like Air DNA, I use Price Lab Marketplace myself. And actually just speaking to people like, like this, listening to podcasts like this, where actually you can pick up the information is about, you're thinking about who's traveling, what do they need, how often are they going to stay. And if any of the things that they need is a no, then you need to be saying no to that. Property, you know, like if, if this, if it's not right, it just needs to, needs to be a no and keep looking.

Absolutely, yeah, yeah. And it's, it's a typical thing from the, from the property world. You don't want to be a motivated seller, but also you should not never, ever, ever be a motivated buyer. And in this case, yes, if you're offered, being offered something, and especially if it's your first one, just be careful and then do a sanity check, ideally with people who know what they're talking about. Not me, please, because I don't have time for 6 million people calling me all the time. But it's a typical thing that you need to be aware of before, before you start a business, like any business.

And for people who are looking for somewhere, if you go into the hospitality community on Facebook and you pop a post out sort of requesting information, there'll be a huge, there's a huge resource basically for anybody who's looking. But Ron, did you have another slide to show us?

Yeah. Let me quickly show you the green line here. So this is literally a 12 month rolling average of the revenue. So you can see it goes up steady. And so it's just not to show off, but clearly how I analyze things. So literally this means this green line stops here. So let's say it's 0.5. Now, 0.5 is half a million. So literally I'm doing half a million turnover. Bear in mind, I'm on my own. I outsource everything. I don't run around with cleaning equipment or a hammer and nails. And so if you set it up like a business, you get results like a proper business, simple as that.

One of my first questions would be from that is how do you outsource? I mean, I'm a short term rental host myself and at any given time you never know what problems are going to, going to creep up and you know, anything from plumbing to, you know, leaks in the roof to parties or things like that. Who do you have on the, on the ground checking this stuff and especially around contractors. You know, I think cleaning, you can find good cleaners if you search in certain areas, but particularly handymen. How do you find good, good people to do the kind of, the maintenance kind of stuff?

You're asking a good question to the wrong person because I hate micromanaging and so it doesn't mean that I'm sort of sitting in my ivory tower and just pull some strings, but I just make sure that the people on the ground are, let's Say, in close contact with the guys that I outsource the work too. And so literally, I'm having a team around me, four people. And those four, they literally organize the maintenance, the cleaning bits and bobs, potentially new acquisitions. And that helps a lot because after all, with 30, sorry, now 30 properties, you can't do everything on your own. And so literally, again, they nerd network as well. And so people who do maintenance, they know those guys and they say, okay, I know that you are ramping up a block in Shepparton, for instance, and can we help you in maintaining it? If you need anything, just reach out to us. And of course, if you're doing that for a few years, again, it's testimonials. You get to know each other and then you know who you can rely on at 11pm on a Saturday or Sunday night, because in this business it's 24,7. And so you need to be having people who are reliable, not only cleaning, not only maintenance, because cleaning can also be required at night. There can be an accident, something. And then you need to have someone who is almost on standby. And of course, it's also, you need to have a support team that is getting that phone call from a guest in the middle of the night. And so again, for that purpose, literally, we are using a call center, partly in India, partly in the Philippines. There's 40 people sitting there doing nothing else than keeping an eye on the properties. Because you need to. You need to be able to offer services 24 7, not only locally, but also in the back end. Because if someone forgets a key or a code or something, someone needs to be there always.

Definitely.

It's like night watch you do.

I mean, just having the right people around you is. Is so important. So, Ron, I know we've probably got about five minutes left. Did you want to share any more slides or did. If not, we'll. Average day rate versus occupancy.

I do, yes.

Yeah.

So this is clearly indication of the. The seasonality. And you can see here, so literally dotted lines are in the past, solid lines are now. So you can clearly see January, February, because It's dark green. That is 2000. Sorry. Yeah. 20, 23. And so obviously because we have more units, it looks a bit higher. However, it's also more units in better areas. So also not only better areas, but you get more experience in maximizing your profit. So not only having a higher daily rate, but also a better occupancy because, well, you. You learn to play the game better. So to Speak.

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That makes sense. That makes sense. And obviously over time it's just a case of improving these average daily rates along along with the occupancy. And I know one of the things which we measure is revpar, which is where, you know, we're taking into consideration both occupancy and the average daily rate. Awesome. You've got one.

Here's what I prepared earlier.

Awesome. For those listening to the podcast, Ron's brought up a slide which shows the revpar. And just remind me again how you get to revpar. Is it the average daily rate divided by the occupancy, is that right?

Yes. Yep.

Lovely. Yes.

It's a 3 revenue per average room.

Yeah.

And on this slide I go one step further because revenue is one thing. However, I like to know how much money I have left at the end of the day. So that is NOP par, which stands for net operating profit.

Okay. That's not one even more important net operating profit. So this is tracking the actual profit month to month, basically. Yes.

And again, the lighter the color, the longer back it is. And of course again, dotted lines are in the past, so this gives me a bit of a feel. But you can see here the light green in March 21, that was when I started the first four flats. And so clearly that's an indication that, yes, it was a bit of a starting, let's say hurdle, which is normal.

Yeah. And then clearly to mention as well, important to mention for people that we mention it to our clients that during the first month, two months, revenue is just going to be low. You know, that's when you've got, you've got a clean before the first day and after the first day, you've got the setup costs. There'll be stuff which you didn't know needed fixing or doing. So you'll have extra costs, all of that sort of stuff. So just be prepared if you're launching a unit that you Know, the actual net operating profit is actually going to probably be a minus on the first month and low on the leading months. And then it starts to get going. And you can see that here, can't you, across the graph?

Very much so, yes. So the good thing is, if people are watching this, record it, then they can stop the video and they can have a good look.

Yeah.

Okay. So going forward, this of course is key for an insight in the diary bookings. Obviously, green means diary bookings, red is from our friends as booking.com, airbnb, etc. You can see that luckily in 21 we had quite a lot of dire bookings. In 22 we didn't give it enough attention simply because I was distracted by IT contracts. It happens. So you can see now that we are focusing back on the direct bookings. It goes back up and I want to have at least 50% direct bookings, if not more, because I'm looking at tomorrow. And so tomorrow means that right now, or let's say last month, we have 15 units or doors, and currently we have 30, so we are ramping up another block of 15 this time, sorry, 14 in Birmingham or near Birmingham. So that means that the expected turnover will be double. So literally I'm looking at about a million, give or take, which is quite healthy. And of course, because I look at it from a business perspective, I have my net profit at the bottom, I have my gross profit at the bottom and so I can keep a very close eye and okay, what is happening and does it still match the projection? If not, why not? Et cetera.

And just for people listening, and I think this is important, especially a lot of people who are starting short term rental, they might not have a business as such. And we've mentioned several metrics to track. So obviously the key ones people tend to know about occupancy, average daily rate. We've then talked about revpar. We've then talked about the net operating profit as well. So that's a. That's one which I certainly hadn't heard of before this podcast, but obviously it boils down to exactly what we've got here, which is what is your top line revenue? So that's all the money that you actually get in. What is your gross profit and what is your net profit? And for those listening, can you explain the difference between the two? What, what is gross profit versus net profit regarding your short term rental?

Yes. So the typical thing is your gross profit is what you have left after you pay stuff like your rent, etc. As in the direct costs, these things. For instance, if you rent a flat, then obviously your rent is a direct cost. Utilities, things like that. However, there's also a thing called overhead and overhead is anything that you spend on the back office, which is accountancy, for instance. Yeah. And you can also say I'm going out networking, having dinners and blasts in Nashville and all sorts. That is overhead.

I like the mention that is as we record this as the STR conference in Nashville. And yeah, definitely it is offsetable overhead.

Yes. So literally what you have left is your clearly net profit. And of course that's the part that, well, some people like to minimize it because then they pay less tax. But yeah, it's. Let's say it's questionable. The main thing is you need to be aware and actually I don't have it here in this slide, but what I also keep a very, very close eye on is your profit margin. As in what's the percentage of net profit that you are left with compared to your revenue. So let's say if you have revenue of 1 million and you're left with 100,000 net profit, then you have your net profit margin of 10%. And of course it depends from industry to industry. Sometimes 20% is quite bad, sometimes 10% is quite good. It depends. And literally we are running around 20ish percent and that seems to be quite decent. So yeah, I'm happy with that.

And what I'd love for everybody out there listening to this and certainly something which know I'll speak to my business partner about is just to get you know, these figures down on paper because once you know what, these figures are a bit like a pilot steering, you know, an airplane. You need these measurements to at least adjust course and put yourself back on course. And I don't know, that might have been yourself on. Somebody was saying that a pilot is off course 99% of the time. They're just making little adjustments all the time to still get to their destination. Which is, which is so important.

Yes. Let's say you're flying from Manchester to Nashville. Then you know you're going to end up in Nashville. However, 99% you're not really heading, yes, you're heading for Nashville, but you have to make corrections all the time. The same here, to be honest. And so that, that means that you really need to focus on, okay, what, what are their sided, what, what, what's your vision? That, that's one key thing because your vision is your goal in this case Nashville for instance. Or you say okay, I want to have a viable business model with the revenue of X and a profit margin of Y, for instance. And then you can fill in the blanks. I literally have a behind the screen I have a vision board. So literally the things what I do it for are there both from the past, present and future. It's a healthy mix. So you can sort of be grateful, see what you have now and project it in the future. It's a very helpful thing that I do. And of course it brings you back to the basics. Is okay, what are the key bits you're looking at? For instance, you have to make sure that you are matching your property with your avatars. You have to make sure that you have your reliable people on the ground for cleaning, for maintenance, your quality control. You need to make sure that your standards are always kept up. If you are having more than one property, make sure that they all meet the same standards, not that one is better than the other. Because clearly if you have a guest staying somewhere, they say, oh, you have a property there as well. And they go there and then it's a totally different experience. It's very bad. Especially if you want to build a brand, then it's not so good. And then of course in the background you have to make sure that all your fundamentals are in place. As in, okay, you need to make sure that you have a proper control of the property. If you don't own it, ideally have it at least for five years. That's what I do nowadays because if it's too short, you can't maximize the location. You could, you can't maximize the marketing. And that, that's, that's a bit tricky. You have to stay on top of your sales. Again, the marketing, the finances. And literally I have, nowadays I'm in a very, very lucky position that I have a board and they are really keeping me accountable because I wanted them to make me accountable. Sort of a self inflicting thing. But it's good because literally it means that it's not me telling. Oh yeah, no, it will come tomorrow. No, Ron, why didn't you do this? Why don't you do that? Why didn't you meet your targets?

You make a really good point. Because it's one of the things where as soon as I got myself a business partner, somebody who I'm accountable to, you know, like it's so important to. And like you say, if you're a company with a board, then obviously that is the job, isn't it, of the company to produce profit for, for the shareholders and that. So ultimately when it comes down to it, if there's somebody out there who's starting a short term rental business, there's lots of things you can do and certainly something which I wish I'd have done in the early days is get an account partner, somebody who you can share this high level stuff to. It can be, you know, somebody else in the same sort of industry. You could find somebody within a mastermind or something like that or you could even just have a family which go, look every month I'm gonna, I'm gonna go and share this information or friend and you're sharing this information and you know, get them to ask these questions of you. You know, preferably somebody who is able to ask hard questions. Because that is the important bit, isn't it? You need to kind of feel when, when something's yours. This is the difference between employment to owning your own business, isn't it? You can, you haven't got a boss necessarily so you kind of need that accountability and having an ex, not just yourself, but having somebody who can give you that accountability is just so important. So I really, really like this. And as we bring this to towards a close, Ron, is there any last moment shares? If not, we just love to ask a couple of quick fire questions towards the end of these.

So yeah, come on, go ahead.

Yeah, feel free to unshare the screen just so we get the, the full screen.

I know my editors let me keep you on sec so contact details. So of course you can go to either 12 stay if you're a lazy typer like me or you do a one to stay and that it means UK net and com because we are now extending into Spain and Dubai and Canada around the corner as well.

So Nice, nice.

I'm stationary but I'm not sitting still.

Definitely go and check out the website. I mean the website looks amazing as well and it's good to see and I actually saw your units which are based overseas as well on there. So really, really cool to see. So as we we bring these to a close I'd love to just ask a couple of quick fire fun questions. So the first question is who would you invite to a dinner party? You can have a couple of people at a dinner party, living or dead. Who would you invite?

Who would I invite? Mr. Ford. Nice, simple. Because he was one of the pioneers, one of my favorites of course. Napoleon.

Yes, Napoleon Hill.

He's clearly the daddy of Anthony Robbins and all sorts.

Yeah, he's brilliant. And one of the reasons I'M standing here now, I wouldn't be standing here doing this if it wasn't for reading Think and Grow Rich on a beach in Corfu about six, seven years ago. So, and the last question we always love to end with is, do you have a mantra or a saying that you can share with us that resonates with you?

Yeah. Always be kind to everyone because you don't know, let's say who knows who, that's one thing. And if the proverbial hits the fan, you can be in a, let's say, less enviable position yourself in a few years. So it means that be careful, don't judge before you know everything about the person. So just be kind, be cautious. And then.

Yeah, it's so very true, so very true as well. And thank you so much, Ron for spending your time with us. I feel as though we've gone on roller coaster of knowledge. I mean, how to get blocks, you know, building those relationships, what to avoid when getting properties, you know, in terms of the lease restrictions, things like that, who to have on the ground. And then obviously the key thing that we said we're going to discuss, which is the, the metrics of a business. And I've learned certainly a lot of that and it's very clear to me that, you know, there's, there's a wealth of knowledge that you've got, but also there's a lot that we as short term rental owners can put into our business. So homework from this, everybody who's listening, go and find out what your revenue is, your gross profit and then your net profit. And of course the key one which is those, those key figures which are daily to look at the occupancy, the average daily rate, the revpar and what was the other one, the profit net operating profit.

Not par, not par, notpar and of course your, your net profit margin.

Awesome, awesome. Thank you so much. Was there anything to share that we missed at all? I know there was a lot more that we could have dived into, but.

Any last years, there are, there are so many things. So literally right now, because I'm a Salesforce guy, let's say over for the last 15 years, I'm now moving everything into Salesforce. So that will be my standard dashboard, including marketing cloud. Because obviously if you want to scale, you have to scale it again professionally. That's what I learned with all my meetings in the C suite in my profession before str. And that's it really. Just grow wisely if you want to grow. But make sure whatever you do is, let's say sound because you need to make sure that something is robust enough to withstand like cash crunches, banks falling over like last week. And so you need to make sure that you have a proper model and ideally a very, very healthy cash flow. Because if you have a healthy cash flow, then you can survive many things, to be honest.

Cash is king, they say. Certainly.

Absolutely.

Yeah.

Or queen.

Or queen. Yeah, absolutely. Thank you so much, Ron, for my pleasure with us. Really appreciate you sharing your, your business with us and your story and I hope to speak to you again. So thank you too. If you're listening to this on the Facebook Live, that's it from us from this live recording of the Boostly podcast. I know there's a lot of places you can put your attention and I really thank you for putting it with us. So that's bye from me and bye from Ron. See you on the next one.