2020, the start of a new decade. Looking back, 2010 feels like such a long time ago, and looking forward to 2030 seems equally an age away.
However, the best laid plans should always be started early. Whether you are just starting out in your career, are mid-way through, or entering the final decade of your full-time working life, these next few weeks should be the start of your planning for these next ten years.
This week, I am going to focus on senior management and business owners.
Next week, I will talk about the go-getters, the general staff and what they should be doing given that technology will play a pivotal role in their careers.
The coming decade for senior figures and business owners
As a senior manager or director, you have worked hard over many, many years.
You will have grafted to become a great estate agent. You know the market. You have nurtured a team. You have likely dealt with many different and complex situations over the years.
You are wise about the housing market. Your friends call you to ask advice almost daily about what they should be doing. You are not like the traditional view of an ‘estate agent’, you have respect amongst peers, if sometimes derided a little, you help others.
You may hold stock. You might even own the business. What is likely to be true is that you will be considering leaving the business, selling the business, or passing it down to a family member over the next decade.
So, even if you’re coming to the end of your career, my question remains the same: What does succession look like?
A few years ago, I had the great fortune of speaking at a conference in Italy. It was an internal conference for a removals firm, of all things, one of the larger ones in the UK.
Effectively, it was a franchise organisation but one that was very much family run. Most franchises were run by husband and wife teams and most were going strong.
Removals is really what I would call a ‘no sh*t, Sherlock’ business. They move things from A to B. They have a monopoly and they were not great believers in technology. They have a simple business model which hasn’t changed for years, maybe decades.
The audience, therefore, was predictably resistant to change. In many cases, resistance tipped into hostility.
Most of these family teams were aged in their mid-to-late 50s and had done well in life. These simple businesses had served them well. From humble beginnings, they had made money. They were comfortable.
I struggled to work out how best to get through to these people. Their current positions were too comfortable. But, as they say, the biggest threat to your future success is your current success. So, I took a simple if slightly different approach with them by asking: ‘what are you planning to do 10 years from now?’
Are they looking to sell their business or pass it down through the family? Son, daughter, niece or nephew?
Finally, I saw the slightest flicker of interest from them, perhaps because I was speaking about something which had been on their minds for a while?
At this point, I became deliberately contentious.
‘Where is the value in this business if it is all on paper?’ I asked. ‘Assuming you have a computer, is an Excel spreadsheet actually worth anything to you? What are you actually passing on to the next owner? What are you actually passing on to the next generation?’
If the business is all about you and your personal relationships, there is very little value in just your order book. Yes, there are profits and yes, you can assign value, but the multiples which you are working on will be slim. The opportunity for sustainable business success is basically in your head.
And then I told them that any son, daughter, or nephew would be mad to take on a business like this. No-one will pay for it, I said. It is essentially worthless.
It was at this point that two or three members of the audience really got the hump. A couple shouted out that I was wrong and that they had hugely profitable businesses and that it didn’t matter what I thought.
What I hadn’t then expected were other voices in the room standing up for my perspective. I had an auditorium of conference-goers arguing amongst themselves about succession.
While I encourage audience interaction, it doesn’t usually take the shape of the audience arguing with each other about matters I am raising.
It was interesting, however, that the dissenters were exactly the demographic I had expected to be arguing at this point: older, more traditional ‘movers’ who had been in the business for years and done very well out of it.
Those who agreed with me were much younger, more recent acquirers of a ‘franchise’ who were already preparing their business for the future, putting in technological systems to help them win business over competitors. In this case the technological advancement was as simple as CRM systems and more advanced client valuation tools to free up their time.
Another team in agreement were the younger family members who were currently in the midst of a succession. They were taking over the business from their parents. They explained how difficult it had been to take over the reins. ‘Everyone wants to speak to Dad’, they told me.
Nothing of the business they were taking over was in a computer. All the paperwork was beautifully filed away but they couldn’t make any sense of it. Decades of work was piled up in lever arch files, making the task of coming up with proactive new sales strategies nigh-on impossible.
The dissenters grew quiet. I like to think they were suddenly realising how selfish their perspective had been. They hadn’t considered what it means to really sell or pass on the business.
They had thought that turnover and profit were the only things that would be considered when looking to make fair value from the sale, once they’re ready to sell up.
My simple advice to them was to consider that their business would be considerably more valuable if it was ‘technology-ready’ or already ‘technology-enabled’.
All potential suitors will be looking for this because they want a business that they can see immediate value in. They will want systems they can connect right into. They will want to understand all current and potential customers on day one.
Preparation prevents poor performance
Therefore, if you are a senior manager or director at an estate agency, consider what you are really planning to do during this decade and start to understand what extra value you create within the business.
Turnover and profit aren’t everything. Look at your potential exit scenarios and work towards you preferred option.
If you preferred exit strategy is you being bought be another company, start to understand what technologies they are using and start to adapt your business accordingly.
Make an acquisition as easy as possible with systems that will complement the acquirer. If you are looking to pass the business on to someone else, understand where the value will be for them.
They will not have the personal relationships you do, but they can be aided by having the right systems in place that will make it easy for them to manage customers.
All in all, PropTech doesn’t have to be particularly smart or sexy. You just have to work out what you need in order to enable you to make the most of your business, and achieve what you hope to achieve, in the next ten years.