Sales Benchmark Definition

THE SALES DEPARTMENT BENCHMARKS Definitions

Residential Sales Department means that profit centre within a real estate agency which derives the majority of its income from acting as an agent in the sale or purchase of residential property.
1.00 Residential means all income, fees and commissions received from services provided which resulted in the sale of residential property but excludes any amount received for advertising and / or promotion.
2.00 Commercial means all income, fees and commissions received from services provided which resulted in the sale of commercial, industrial or retail property but excludes any amount received for advertising and / or promotion.
3.00 Recoverables / Advertising means all monies received from clients for advertising, marketing, auctions, certificates & keys.
4.00 Other means income, fees and commissions received from services including insurance, valuation and other income categories not being sales (1.00, 2.00 above) or any amounts received for advertising and / or promotion. (3.00 above)
5.00 Total Revenue means the aggregate of items 1.00, 2.00, 3.00 & 4.00.
6.00 Advertising / Promotion means all monies paid for advertising or promotion in areas such as newspapers, magazines, brochures, signage and for canvassing / prospecting.
7.00 Bank Charges means all monies paid for banking charges but excludes interest.
8.00 Equipment / Technology means all monies paid for leasing, interest, provision for depreciation, repairs and maintenance on all plant and equipment but excludes motor vehicles.
9.00 Group Fees means all monies paid to franchise, marketing and multiple listing groups for the provision of services but excludes advertising and promotion.
10.00 Insurance means all monies paid for insurance cover including loss of profits, cash in transit, premises, contents / equipment, public liability, professional indemnity, workers compensation and motor vehicles.
11.00 Interest means all monies paid as interest on funds borrowed to operate the business but excludes interest on equipment/plant, motor vehicles and premises.
12.00 Motor Vehicles means all monies paid for motor vehicle leasing, interest, provision for depreciation, repairs and maintenance but excludes insurance and parking.
13.00 Personnel / Training means all monies paid for personnel to attend training, seminars and conferences plus uniforms, petty cash and staff amenities.
14.00 Postage / Couriers means all monies paid for stamps, postage, document exchange and couriers.
15.00 Premises means all monies paid for leasing, interest or provision for depreciation on premises, plus rates, taxes, electricity, fuel, cleaning, refuse removal, repairs, maintenance and security.
16.00 Printing / Stationery means all monies paid for printing, stationery, copying and binding.
17.00 Professional Fees means all monies paid for accounting, auditing, legal, valuation or other professional services plus any associated costs such as stamp duty.
18.00 Recoverables means all monies paid for services and products (excluding advertising / promotion item 6.00) such as certificates, reports and keys which are recoverable from clients.
19.00 Referrals, conjunctions means all monies paid to others as a referral or conjunction fee.
20.00 to 23.00 Salaries – Employees means all monies paid to employees as wages, commission, car allowance, telephone allowance, uniform allowance, superannuation, fringe benefits tax, group tax, payroll tax and long service leave.
24.00 Salaries – Principals means all monies paid to principals as wages, commission, car allowance, telephone allowance, uniform allowance, superannuation, fringe benefits tax, group tax, dividends or share of profits. It is included in item 29.00 Operating Surplus (Deficit).
25.00 Subs / Licenses / Donations means all monies paid for licensing, registration, association membership, professional literature, donations and subscriptions.
26.00 Telephone / Fax means all monies paid for telecommunication services but excludes telephone allowances paid to personnel.
27.00 Travel / Parking means all monies paid for travel and parking but excludes travel and parking related to training.
28.00 Total Expenses means the aggregate of items 6.00 to 27.00 inclusive.
29.00 Operating Surplus (Deficit) means items 5.00 less item 28.00
30.00 Surplus (Deficit) Per Principal means item 29.00 divided by the number of principals.
31.00 to 35.00 Personnel No’s means all full time, part time and casual employees. Round non full time employees off to the nearest half a person.

Key Performance Indicators Definitions

(i) Revenue. All fees and commissions received by the Sales Department (line 5.00).
(ii) Net Advertising. Advertising/ promotion/ expenses (line 6.00) minus recoverables / advertising (line 3.00). Expressed as a percentage of revenue.
(iii) Premises. All monies paid for leasing, interest, provision for depreciation, repairs and maintenance (line 15.00). Expressed as a percentage of revenue.
(iv) Salaries – Employees. All monies paid to Sales Department employees as wages, commissions, allowances, superannuation, taxes and long service leave (lines 20.00 to 23.00). Expressed as a percentage of revenue.
(v) Operating Surplus. All Sales Department revenue (line 5.00) less all expenses (line 29.00). Expressed as a percentage of revenue.
(vi) Surplus per Principal. The Sales Department operating surplus divided by the number of principals (line 30.00). Expressed as a percentage of revenue.
(vii) Number of Sales. Total sales transacted by the Sales Department (line 36.00).
(viii) Sales per Selling Person. Total number of sales (line 36.00) divided by the total number of principals (line 31.00) and sales consultants (line 32.00) less half of one person to offset principals time spent on non-revenue generating activities working “on” the business.
(ix) Commission per Sale. Total sales and commissions (lines 1.00 and 2.00) divided by the number of sales (line 36.00).
(x) Surplus per Sale. The Sales Department’s operating surplus (line 29.00) divided by the number of sales (36.00).

Best Practice Benchmarking Sample Size

The sample utilised in the preparation of The Best Practice Australasian Real Estate Agency Interfirm Comparison 2009 enabled an analysis of agency businesses employing 6,720 persons being 792 principals, 2,831 sales consultants, 798 property managers, 121 leasing officers, 66 business development officers and 1,709 administrative / clerical personnel. The sample business transacted 55,760 sales, managed 124,944 tenancies on behalf of 102,372 owners (landlords), leased 56,316 properties and traded from 556 locations.