For any business, regardless of size, age or industry, operating efficiently is fundamental to your success.
When faced with challenges like we are in the lettings sector right now, reviewing how you operate and looking at where you can save time, cut costs and increase income is crucial.
Streamlining processes, speeding up workflows and working smarter will inevitably help letting agents to improve profit margins, because they will be able to achieve more in a shorter space of time.
What cannot be ignored, though, is the overwhelming pressure to cut costs, which can also be a direct benefit of operating more efficiently.
This month, we have been hosting a series of workshops on how letting agents can restructure their businesses and it’s clear that the biggest problem most agents have is fixed costs.
And while few like to admit this out loud, the largest fixed cost for most agents is staff.
Making redundancies and trimming your workforce is not your only option. Instead, there are ways to increase staff efficiency which will positively impact output and the bottom line.
Motivate, train and equip staff with the tools to work smarter first. Only then will you truly know whether you actually need all those in-house resources.
We share our goals and objectives with the entire team and provide people with individual targets that are in line with the overall business Key Performance Indicators (KPIs).
As a result, they are motivated by knowing they can have a direct hand in helping us achieve those targets and come up with their own methods to complete their workload efficiently - ultimately, they know it’s good for their pay packet and career prospects!
We also allocate workload clearly, minimising the risk of duplication or error and therefore improving job satisfaction.
For a business of our size, we break down the entire property management process so that there are different team members responsible for tenancy administration, accounting and property management.
For smaller agents who don’t have volume, consider giving complete ownership of a portion of a portfolio to one member of staff who will then have personal responsibility and pride in what they are doing.
There are still far too many agents out there with separate sales and lettings teams, continuing to resist cross-training staff. But you can’t ignore it forever. For agents who want an efficient and dynamic business, this has to be the future.
Let’s say a negotiator is out on a sales valuation and the vendor wants to wait for the market to rise before selling but is moving abroad for work. That negotiator can then offer lettings services, providing the perfect opportunity to throw long-term rental and full property management into the mix, making you the first agency to call upon when the vendor is eventually ready to sell as well – double whammy.
On the other side of the fence, when landlords give notice on management because they are selling, don’t throw the baby out with the bathwater, offer an instant free valuation. If you don’t sell that property, somebody else is going to.
At the very least, having staff who are cross-trained can speed up the sales process on both sides rather than having to wait for the right member of staff to handle an enquiry.
At best, it could result in you winning more business and significantly reducing the number and cost of staff as it becomes apparent that people don’t need to be sales or lettings specific – not in the 21st century anyway.
PropTech will undoubtedly improve efficiency if you choose the right provider and ensure that staff know how to use the software effectively.
We work with hundreds of estate and letting agents across the country, and believe it or not, many of them aren’t even using property management software. To have an instantly accessible electronic picture of your entire portfolio is invaluable in planning, managing and measuring your business.
As well as acting like a Customer Relationship Management tool containing all landlord, tenant and property information, more advanced systems can automate payments and reminders to ensure you remain compliant when it comes to all legal liabilities and processes. They also encourage best practice.
Another key area where PropTech can save time and streamline processes is tenancy administration. It’s extremely time-consuming and paperwork heavy – yes, some agents aren’t paperless yet, despite there being huge cost savings to be made in pure printing, storage and postage, not to mention a range of affordable and easy-to-use systems available.
Agents need to consider where they would benefit from systems and technology that will save time and reduce their fixed costs while still delivering a good customer experience, and then invest in the right ones.
PropTech isn’t necessarily a replacement for people - property will always be a people business and no matter how hard you push for automation, tenants and landlords don’t want to speak to a robot – but it can make you more efficient, save you time and give you the opportunity to focus on other income generating activity.
On the way out?
An inevitable consequence of streamlining and becoming more efficient is unfortunately staff losses, and this is something that you may have to deal with in the longer time.
In the meantime, however, you can also improve the efficiency of your lettings business by moving out, downsizing or moving other people in.
When it comes to your branch premises – often the second biggest cost for an agent – ask yourself, do you really need to be on the high street; do you need all that space; do you even need an office at all?
If you’re coming up for a lease renewal, look at smaller or more affordable options, like serviced offices. If that means your office won’t fit everyone in at the same time, then enforce desk sharing or be flexible and let people work from home.
After all, negotiators should be out most of the time and property managers can work from anywhere. It can seem like a positive to offer face-to-face communication to tenants and landlords, but when someone drops in for a two-minute query, that can easily turn into an hour.
If moving isn’t an option for you, think about combining multiple branches or sub-letting space. Another solution, and a play on moving people ‘in’, is to outsource.
Outsourcing certain tasks to a specialist business that already has the skills and infrastructure in place, but only needs paying as and when they provide the service, can be extremely effective.
Again, it doesn’t have to lead to a cut in staff, but outsourcing phone calls, viewings, inventories, inspections and even property management, will allow you to reallocate resources to fee-earning activity.
Or it will enable you to provide the best service without the hassle or need for a physical team or the space to accommodate them.
*Simon Duce is managing director of the ARPM Group, which provides national outsourced lettings support