You need to know where you are
This week I went to help a friend at his house in Blue Ridge. And let me say this, there are a lot of winding roads out there.
Don’t get me wrong, it’s beautiful. But if you don’t know your way around, you could end up in a ditch or something worse like hanging off the side of the mountain.
After our visit, I headed home. But I asked if there was a better way to go than the way GPS had brought me in. My friend pointed toward the opposite direction from where I had come and said that way was a lot better. He spouted off some quick directions which I didn’t pay very close attention to because I didn’t know where I was, and I intended to turn the GPS on as soon as I got in the truck. I told him that and he said I should drive that way just a bit so the GPS would reroute to the direction he was giving.
So, I pulled out of the driveway and headed in the direction my friend pointed.
But as I headed down the road, I noticed I had a problem — there was no cell service. This meant that even though Google Maps knew my home address, it could not see where I was in relation to my destination and could not do the calculations needed tell me which way to go.
So there I was, traveling down a road I didn’t know, in the rain, with no clear directions to tell me how to get home. That was not a good place to be.
Oddly enough, people tend to do something very similar this time of year when it comes to goal setting. They think they want to go a particular direction, they get an idea in mind of what that looks like and they take off toward that end goal. But they miss something that is very important. They don’t see where their current position is. And just like with the GPS, if you don’t know both where you want to go and where you are now, you can’t get accurate directions.
So how do you find out where you are? You do that through a process we call “The end of year review.” And if this is not something you have ever considered, you really need to think about doing one before you start any kind of resolutions or goal setting for 2024.
So, you may be asking yourself how to do an end of year review. All you have to do is ask yourself these questions: What all did you do this year? What went well? What didn’t go well? And what needs to improve?
As simple as those questions sound, this process is a little time consuming, and you have to break it down into different areas depending on what you are evaluating. I do my business and personal goal setting at different times of the year. Business goals happen now because that’s when our fiscal year ends. My personal goals get evaluated at the Biblical New Year which is in April. This allows me to focus fully on each and not get overwhelmed with too much change.
Right now, we are in the process of evaluating last year and we are asking the questions above. In our rental company we get those answers by looking at different metrics we track, such as how many houses we filled this year. How long did it take to find a good tenant? What was our turnover time? What was our vacancy rate? What was our average turnover costs? These numbers let us know where we are right now and allow us to project goals for next year on how we conduct our rental business.
We are also looking at our monetary goals from this year to see how we did. We ask how much rent did we receive for the year? What expense did we incur, and can we do anything about them to increase our real revenue?
In our flip company we are looking at how many houses we bought. What was the profit per deal? What were the projected and real rehab costs? Can we do anything about that?
We are also asking where we spent our marketing dollars to buy those houses. Which avenue worked the best? And did some not work at all? I will be honest, direct mail has not been as good this year as in previous years. And because of that, we will throttle it back for 2024.
The key take away from this is the end of year review lets you know what your current position is so that you can see better how to get where you want to go. And that is massively important. Because you need to know where you are in order to start on the journey towards your goals. Otherwise, you might get lost on a winding road that lands you in a ditch. And no one wants to end up there.