In this post, we are going to take a look at stage 3 in the evolutionary scale of running a successful letting agency. We have explored stages 1 and stage 2, and seen how at each stage we have to learn to recognise and overcome various difficulties in order to move from one stage to the next.
If you’re at stage 3, you will be reaching the 250 properties mark, and this is the point where you might encounter ‘the messy stage’ – the point in your business where you really need to get things structured and organised, and where you will need to get the right staff in place to help you to do that.
The right team
When you reach that point of 120 to 250 properties, it’s likely that you have started the process of putting a team in place. You might have 3 or 4 people working for you, and perhaps, as the business is growing, their roles are becoming a bit less defined, and bit more scattered. You might find that you’re stepping in, doing bit and pieces of their jobs, and they might be crossing over and doing bits and pieces of each other’s jobs. It gets a bit….messy.
If you’re in that position, it can be hard to see a way out of it. When you and your team begin to feel the pressure, that’s usually the point where you start to think about hiring more staff to lighten the load a bit. The problem is, if the team haven’t got defined roles, you could end up going around in circles. If the staff don’t know what they’re meant to be doing, and you don’t have the right systems in place, you’re not going to have a very happy team.
Managing a team of people in this situation is time consuming. You can start to feel like you don’t have control over them; if they call in sick, they’re always late or don’t turn up for work, or those blurred lines cause them not to focus on the job they should be focussed on, you might end up feeling like you need to take over some of those roles, which has a knock on effect. If you are busy looking after the back end, who’s taking care of the marketing and the front end?
So how do you go about organising the team, and work out if they’ve got the right skillset? You need to start putting the right structures in place. Getting the right people in the right seats is essential, because without that, you’re in danger of stopping the business from growing, and from moving forward.
If you’ve got staff doing jobs they are not trained for, or don’t play to their particular strengths, they will be unhappy, they won’t do the job to the best of their ability, and that could result in complaints from landlords. And that’s not a very nice place to be. It’s like trying to put a violinist on percussion. It just wouldn’t work.
Instead, get those systems in place, make sure that your team has defined roles, and that they have the right training and knowledge to do their jobs efficiently. Jack shouldn’t be doing Jill’s job, and Jill shouldn’t be doing Jack’s job.
“We’re too busy! Get more staff!”
This is a problem that comes up for a lot of letting agents; if those systems we talked about earlier are not in place, the logical thing you might jump to is to hire more people. To start collecting staff. The team you have are being run ragged, their roles are overlapping, and they’re all too busy. So you try and make things easier by hiring someone else. It doesn’t solve the problem; it just costs you more money. And at the 250 end of the scale, you might be thinking that you should be earning more, and that you should be increasing your fees. And perhaps you’re right – you have to be in a place where you’re not giving away your services for free. But until you’ve got your structure in place, until you’ve organised and restructured your team, you’re always going to be chasing your tail. And your business is always going to be just like everybody else’s. In order to stand out, you need the correct structures in place for your team, and then for your fees.
A bit more about fees
After your team, the one big decision you’ll make at this point is whether to increase your fees. So what is it that you’re charging for your services? When did you last review that? As you’re business has evolved, it’s likely that some of your services have too. But have your fees evolved? Are there still things that you’re doing, essentially, for free? This is the time to rectify that.
A lot of letting agencies fail to think about converting landlords from let only to fully managed. That’s a missed trick. As well as increasing fees, this is the single biggest thing you can change in order to move things forward. If you can persuade landlords that fully managed is the best option for them (and you can), it can make such a dramatic difference to the money you’re pulling in each month.
The next phase is 250 to 500. Next time, we will take a look at what we might face at this point, and how to adapt, overcome new obstacles, and get the machine up and running to take you to the next level.