Some of my clients who are operating their properties have hit a plateau. They have access to capital, they know where acquisition opportunities are, but they are so mired in property management that their goals for growing their portfolios are on hold. In their current state, their businesses are not scalable.
What is a Scalable Business in Property Management?
A scalable business in property management is one that that:
- Can run without you having to actively manage it
- Can double or triple in size without burning you out
- Relies on a “system” instead of heroic effort of its people to deliver consistent, predictable results
Refer to my previous post about “Working on the Business” vs “Working in the Business”
11 Things That Make a Property Management Business Scalable
There are a eleven factors I look for to determine if a property management business is scalable. I look for evidence that the business has been “systematized”. Here is my “Scalable Business Checklist”:
- The business has defined three groups as its “customers”: tenants, employees and the investors (or lenders)
- The expectations of each customer group are clear to managers and employees (“voice of the customer”)
- Processes have been defined and documented for meeting customer expectations
- Employee hiring and training is given great importance
- Metrics are being monitored to ensure alignment with customer expectations (mostly leading indicators)
- Employees get regular feedback on their performance
- Vendors are treated as partners and given training on how they support your brand
- Systems Thinking is prevalent among company’s leaders
- Data is used for uncovering areas for improvement and revealing accomplishments
- Customer feedback is actively sought and acted upon
- The company culture treats mistakes as learning opportunities
Your job is to create systems and build a culture. Fighting daily fires will lead to stagnation
Total Quality Management
The property management industry can learn a lot from manufacturing, which implemented quality programs in the 1980’s and 1990’s.
Most of these companies trained their employees on “Total Quality Management” (TQM) and brought about culture shifts that resulted in empowered employees and consistent, predictable performance.
Do you feel your business might plateau if you don’t make changes? Give me a call to discuss ideas for systemizing your property management business and making it a scalable business.