Guy Chilvers

The success of every business depends on the smooth interplay of three factors – marketing, operations and finance – in order to keep on track.

The three main aspects of running a successful business are finance, marketing and operations. It’s like juggling: you need to keep all the balls in the air at the same time.

You can do what you do best (operations), but if no one knows about you (marketing) your finances will be awful and you will go bust.

Then again, you could have the best marketing department getting you plenty of customers but the operations let you down; they fail to keep clients informed on the sale of their property.

And guess what? Finance is a consequence of marketing and operations.

Glut of properties

Get them right and the profits will come. It is important to consider why a consumer should bother to buy from you, given the glut of both agents and properties currently in the market.

They can walk into your office, look at the staff and ask a range of pertinent questions but they still won’t know if you can sell their property or find them the right one. They can look at your website but generally these are all the same.

They detail an agency’s history to date, which is hugely unhelpful. Instead, your sites should be listing exactly what you can do for your clients if they choose to do business with you.

You need to distinguish yourself from competitors. What is your unique selling point? Do you offer a money-back guarantee, full-colour brochures, virtual tours of your stock and/or a stress-free experience? Tell customers what you can do for them.

In terms of fees, if you are currently charging 1.5% with an average sale price of £250,000 you make £3,750 gross. However, if you increase your fees to 2% you can sell 25% less houses to make the same gross, based on a target of £1m worth of fee income per annum. So, that’s 200 completions instead of 267 – yes, 67 fewer transactions.

This will allow you to take Mondays off, reduce your overheads and increase profit. If you feel you need to reduce fees in order to get more business, drop them to 1% from 1.5% and you will need to sell 53 more homes per year. But where will you get these homes from?

Fixed costs

The other way of tightening your belt is to lower your fixed costs, fixing the under-performers and lowering your overheads. Sacking the underperformers is a must if you are going to survive, and by these I mean both staff and suppliers. When was the last time you reviewed and slashed your advertising spend? Have you changed your telephone, electricity or photocopier suppliers in the past year? Everyone has someone in the office who is not pulling their weight – you are just being kind by keeping them on.

Now is the time to suggest they go elsewhere and probably to your competitor down the road. But if you survive you can thrive; if you drown, you are out of business and everyone loses their jobs.

Technology has been at the forefront of all businesses over the past 15 years but I still see agents with atrocious websites and using property portals, which bring them either no
or very few results.

Measuring results is fundamental in marketing to consumers and if you try something and it doesn’t work, don’t do it again.

Finally, you need to offer a premium service to survive. It’s no good telling a client that you can’t do a viewing after 7pm because your girlfriend won’t be happy or eating your lunch while meeting with a client – both of which I have seen happen. You have to be reliable, professional and reputable at the very least, or the opportunity to thrive will not be yours to take.

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