The growth strategies you NEED to consider to beat the tenant fee ban
Maintaining the growth of your business and ensuring it goes from strength to strength should be a priority for every letting agent. When the market hits hard times, especially when legislation like the tenant fee ban is introduced, a solid growth strategy is what will save your agency come whatever may.
My last two posts on beating the ban have focused on creating multiple streams of income and streamlining the systemisation of your lettings business. The more you commit to generating more leads and offering more levels of service, the more your business will grow, but this is quite the long-term investment. You might be looking for growth to happen a lot quicker, and this is also possible.
Many agencies like to stay “comfortable” – managing the same types of properties and securing the same turnover every year – but that isn’t as safe a strategy as it appears. Considering the loss of tenant fees could see you losing between 10-25% of your turnover, staying “comfortable” at this stage isn’t a viable option. It’s time to look at growth strategies.
The industry is EVOLVING and we need to change… but where do we start? Firstly, get yourself out of your business for a day or so and strategise, just like you did when you first established the business. Now is the time to do that again. Here in this article, I would like to give you a few things to consider in that strategy meeting…
- INCOME: If you compare what we did for our fee 15-20 years compared to now, it was less than 10% of what we now do for our money. Yet if you ask any agent out there, they will tell you they now charge less than two decades ago, due to competition. Over the years, the agency will have inherited more and more responsibility, as legislation layers increased making the job harder and more time consuming… yet many landlords are actually unaware of the HIGH levels of detail most agents go to, in order to keep them compliant and safe. One of the key things that can be looked at is identifying exactly what we do for our money, what we are doing for free, and how this compares to the “Call Centre” agents in particular. Then, develop and look at creating different layers of service, differentiating the services that will mean the landlord has to be more hands on from the ones where he can be completely hands off, and charge accordingly (and this way your landlord client is fully aware of WHAT services he is or isn’t getting).
- GROWTH: Look at the competition as opportunity. Could you buy out another portfolio or competitor and bring them under your agency? Look at your business with a “helicopter” viewpoint and think strategically. Show a bit of entrepreneurship and you could end up doubling your properties under management and your income as a result.
- NUMBERS: Do you know your numbers? You can really make a HUGE difference to your business, just by improving ONE conversion rate. Imagine if you improved your landlord take-on conversion from 50% to 75%. That would mean an instant 25% increase in business! But this is just one number… now is the time to stress-test EVERY area of your business and make sure you are getting the best results possible.
- TEAM: Your team is your strongest asset, but are you making the most of them? Do they know your company objectives? Do they have goals and targets, with rewards for achieving them? But more importantly than all of that, do you know what THEIR dreams and hopes are? Are they part of YOUR family? If not, now is the time to get to know what makes your team tick and align their dreams with yours.
- SYSTEMISATION: The world has move on, yet so many of us are STILL operating in exactly the same way that we used to, using paper and fax or EXCEL to operate many functions of our business. Start to look DEEPLY at what technology is out there to make our job easier, faster and less risky. PLUS, make sure your team have process sheets and a checklist to follow for every process, to ensure you have consistency and efficiency throughout your business.
To summarise, the challenges that are upon us now mean that we all have to adapt. Its evolution. It’s time for change… some will, some won’t, either way it’s up to you. Will it be fight or flight? I know which way I’m going…
If you’d like to learn more strategies that could help you secure your business’ future in the face of the tenant fee ban, you can opt in for regular updates and resources from Property Agents Circle delivered straight to your inbox.