Storm Proof Your Business

There are a number of predictions as to what is going to happen to the real estate market. The “pundits” are all placing their spin on what they believe they see in their crystal ball based on global events in China, Europe, USA, mining sector, interest rate, Federal Government and statistics.

As business owners and agents we can get caught up in these “predictions” at the expense of our businesses.

It will be rare to find a business owner who does not fear becoming a statistic. As businesses come under more stress owners will start to turn their focus on to listing and selling creating a black hole in their businesses around recruitment, staff management, financial management, leadership, training, culture and ongoing investment into the business.

So what do you need to do as a business owner to ensure you don’t fall into the ‘black hole’.

1.       Review your businesses finances. Ensure that you sit down with your accountant, advisor or franchisor and review your business plan, have a financial budget in place, meet with your accountant monthly, tighten up spending, review your debt.

2.       Keep a strategic focus. Ensure that you and your team understand your market, customers, stock levels, days on market, have a business plan for each agent, department that links into the overall business plan and review regularly.

3.       Review reports. Ensure that you are provided with reports on a regular basis that enable you to see any changes occurring in your business. How can you also ensure that you deliver services in the most efficient and cost effective way without taking away from the experience.

4.       Cash is king. How you manage your working capital will be the key to your survival. Ensuring that you collect VPA up front, put agents on commission only structures, review overall spending however continue to invest in areas such as training, promotional marketing

5.       Cutting costs. This is the first thing we all do when there is a change in the market, cut costs, however ensure that you are doing this in the right areas. This is the time to grow your market share, attract new agents into your business.

6.       Prioritise expenditure. Get into the habit of developing a business case for significant expenses. What will the return on investment and impact on your bottom line.

7.       Performance management. Get good at managing people in your business, either to keep them and help them increase market share or pruning and replacing them with performers.

 As business owners we need to start getting smarter in how we conduct and run our businesses. We need to ensure that we maintain our focus on the areas above as well “getting back on the tools” for a short period of time.

Don’t underestimate however the opportunities markets like this provide us. Businesses that are run effectively are often well poised to make investments such as purchase of rent rolls, businesses, additional staff, training, marketing all of which will provide you with increased market share. When the market changes again as we know it will you will be a long way ahead of your competition.