There are a lot of factors that influence your business success – personnel, systems, scalability, cash flow, marketing, client satisfaction, and more. Think through your past year. How has your property management business performed? What challenges did you face? The last quarter is a great time to evaluate your property management company’s status and decide where you want to take your company in the coming year.
It can be tough to make time for strategic planning, but doing so pays off exponentially in the long run. Well-known author, Michael Gerber (The E-Myth Revisited), talks about business owners who get caught up working IN their business instead of ON their business. They allow their time and talents to be consumed with everyday needs and responsibilities and fail to step back and plan the company journey. The property management business is generally slower during the 4th quarter due to the holidays – make strategic planning a priority. Schedule time to work ON your business and set your course for the coming year.
Let me share some of the strategic planning strategies I observed while I was working at Infusionsoft (a sales & marketing software company). These techniques have helped the company grow steadily since I became acquainted with them in 2008. You can easily apply them to your property management business.
Define Your WHY
You and all of your personnel need to have a clear picture of and passion for doing what you do. Why do you choose to manage properties? How do you change people’s lives? Most people want to invest their time and energy into worthwhile work. Defining your “reason for being” gives people something to hold on to during the rocky moments and strive for through their daily duties.
Create a “Can-Do” Culture
Every business exists to solve problems and meet needs. Make time to assess both aspects of your business and equip personnel to create solutions. Encourage innovative “out-of-the-box” thinking, then be prepared to take action to follow through on ideas. Validate suggestions that “aren’t the way you would do it” – in many cases they might work better than your approaches.
Focus on Profitable Clients
This applies to acquisition and retention. Make sure you have defined your “perfect client,” then invest the bulk of your resources (time, money, and energy) into bringing on more of those clients and slowly letting go of the ones who don’t fit well with your company. Don’t allow the misfit clients to drain your precious company resources.
Get Multiple Perspectives
I participated in several product development “POV” (Point of View) sessions at Infusionsoft. This multi-step process focused on 1) identifying key problems & opportunities, 2) collecting and evaluating relevant data through client interviews and historical analysis, 3) isolating the most impactful areas to improve, and 4) innovating on possible solutions at three levels – individually, in small groups, and then as a full POV team. We assimilated the various perspectives into viable solutions that included the best everyone had to offer.
Representatives from every Infusionsoft department participated in quarterly SWOT analyses. We identified company Strengths, Weaknesses, Opportunities, and Threats. Strengths are the things your property management company is doing well. Weaknesses are the areas where you see repetitive problems or complaints. Opportunities are chances to get a competitive edge through doing things differently or better than your competition. Threats are found in market conditions, industry changes/regulations, and in more or better competitors. Threats are generally something outside of your control.
If your company is smaller, you might choose do a bi-annual SWOT analysis. You can also do a special-focus SWOT analysis, targeting a specific aspect of the business like marketing, service, operations, or acquisition.
Resource: SWOT Analysis Template
Create Strategic Goals & Objectives
Use the information you gather from a SWOT analysis to create an action plan for the next 3 to 6 months. At Infusionsoft, we followed the SMART model for creating strategic goals. Goals had to be Specific, Measurable, Attainable, Relevant, and Time-bound.
I once encountered a Dilbert book called Thriving on Vague Objectives. I have to confess that I did not actually read it, but the title did resonate with me at the time. So much so that it stuck with me. The truth is that most people (and companies) DON’T thrive on vagueness – they need clear direction. Being specific helps you “begin with the end in mind.” You will understand what you want to achieve, why, how, and who is responsible.
It’s hard to track progress when something is not quantifiable. If there is no objective data to document current conditions and the results of focusing efforts on a specific goal, then it’s impossible to evaluate progress without introducing individual opinion and subjectivity. Measurements can include counts, percentages, dollars, or other hard data. Before establishing a goal, make sure you have a way to access the numbers you need. Otherwise, instead of achieving your goal, you may spin your wheels trying to figure out how to measure it.
Goals are meant to stretch your property management company and its personnel. However, unrealistic goals that are set too far out of reach are more apt to become a discouragement than a triumph. If your company needs to make huge improvements in a specific area, you might consider repeating that goal more than once with incremental expectations (measurements). Goals should push people to optimize their performance, but should not make them want to quit before trying.
Relevance is an important key to motivation. The goals you set should produce tangible results that matter to your property management business, your clientele, and your workers. Make sure that there is clear context around the goals so that it is abundantly clear why they are worth the time, effort, and expense invested to achieve them.
Goals should always have deadlines – deadlines get things done. The deadlines give your personnel permission (or force them…) to make the tasks required to meet goals a priority in their already busy schedules. When a deadline arrives, a fair evaluation can be made to determine if the goal should carry over, be dropped, or be considered accomplished.
Here is an example of a SMART goal for a property management business:
By March 15, 2016, DLA Property Management will reduce the number of current tenant calls from 20 per week to 5 per week by implementing a tenant handbook, launching an online maintenance request platform, and educating tenants on using them. This will save the DLA team 10 hours per week and improve tenant relations.
The goal defines the big picture result you are looking to achieve. Within each goal you will also create several objectives (action items) and assign owners and deadlines. For example:
- Research and select online maintenance request options. Name, Date
- Review tenant call log to determine most frequently asked questions. Name, Date
- Research and select tenant handbook template. Name, Date
- Customize tenant handbook to include answers to most frequently asked questions. Name, Date
- Incorporate use of online maintenance solution into tenant handbook and website. Name, Date
- Create and implement a strategy for distributing the tenant handbook and educating tenants to use online maintenance request solution. Name, Date
I understand that it takes time to think about your property management business strategically, but if you don’t your company is like a ship drifting through waves (sometimes tumultuous ones…) without a clear destination or a navigation system. Your crew members (personnel) may be good at bailing water and keeping your business afloat, but eventually they will wear out and the ship may sink, crash, or be lost at sea.
With no clear picture of how you wish your life [or business] to be, how on earth are you going to live [guide]it? What is your Primary Aim? Where is the script to make your dreams come true? What is the first step to take and how do you measure your progress? How far have you gone and how close are you to getting to your goals? Michael Gerber, The E-Myth Revisited (parenthetical phrases added)
I have seen the above strategic planning tactics work on a larger scale at Infusionsoft and on a smaller scale with LandlordSource and my own business endeavors. They are not new, original, or untested ideas, but sometimes we all need a reminder about where, how, and when to focus on strategic business initiatives.
Wishing the best for you and your property management business in 2016! If you’d like to receive our newest blog articles straight to your inbox, please sign up for our newsletter to the left.
Disclaimer: LandlordSource does not represent the article content in this website as legal advice. It is shared information only and up to the reader to use this information responsibly, seeking legal advice as necessary to their business.