How (and why) to review your property management business model today

A seven-step guide to fine-tune your property management business for success

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The end of the year is inevitably chaotic, with countless distractions for hardworking property management business owners.

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That can make it difficult to step away long enough to work on your business instead of in your business.

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But remember: strategy is just as vital to your business’ success as its daily operations.

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Best practices suggest reviewing your business model and value proposition annually – and this is the perfect time of year to get that process started!

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Not sure where to begin? We’ve got you covered. Try these 7 steps to guide your thinking and set your business up for its most successful year yet.

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Too much to do, too little time? Check out the video summary, here.

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Step 1: Clarify your customer segments

Understanding your customers is about more than just knowing who they are. You also need to fully grasp the complexities of the market and legal frameworks in which they operate, and the specific needs and challenges they face on the path to achieving their desired goals.

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Once you have these factors pinned down, you can turn your attention inwards to make sure every service, solution or product you bring to the table addresses these needs – preferably better than your competition.

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Keep in mind: no man can be all things to all people. The same goes for property management businesses. Take the time to figure out which customers (and services) your business is going to focus on in 2023, and then set clear boundaries to keep within those lines.

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Are you focussing on sectional title or HOA or a combination of both? What do your services in each of your segments include? Where do you draw the line with clients asking for more than you’re contracted to do?

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Going above and beyond on occasion is one thing. Being taken advantage of is another. Make sure you know

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Step 2: Analyse your revenue streams

Heading into a new year is also a great time to analyse your revenue streams. This is an important preliminary step for refining your value proposition.

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Questions to ask include:

• Where does your revenue currently come from?

• What profit pools are you tapping into?

• Are there any as-yet-untapped pools that you could explore?

• Which revenue streams are your most and least profitable?

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Your answers will help you refine your value proposition to prioritise services that deliver the best returns for both you and your customers.

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Pro tip: A good example of a commonly overlooked revenue source for property managers is debt collection. If you already manage arrears, you might as well get remunerated for this time consuming activity monthly.

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Step 3: Define and/or refine your value proposition

Your company’s value proposition is the core of your competitive advantage. It should clearly articulate not only your products and services, but also why someone would want to use you in favour of your competitors.

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To get this right, you need to regularly reassess what it is that your clients find valuable, what their core needs really are, and how your approach to meeting them is better than your competitors. From here, you can build a value proposition that truly resonates with your customer base, in language they identify with and fully understand.

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Step 4: Identify key resources

Once you’ve fully defined your value proposition, you’ll be able to start identifying the key resources that you’ll need to consistently create, communicate and deliver that value.

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Most businesses need a very specific suite of resources to thrive. This typically includes a combination of tools, technology and people.

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Taking stock of the resources you need to deliver value effectively and consistently is a good way to refocus your attention (and expenditure) in the right places.

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Remember not to fall into the trap of assuming what you have now is still the best available. The industry is evolving on a daily basis – you don’t want to fall behind the competitive curve because you didn’t know there were better options out there.

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Pro tip: Don’t forget to cast a critical eye over your business structure while analysing your resources. The right structure should empower you to scale value delivery based on internal resource allocation.

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Step 5: Understand key activities

Delivering on your value proposition isn’t just about optimising resources. It’s also about understanding what needs to be done with them (from both a strategic and daily activity perspective) in order to deliver that value in a consistent and scalable way.

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Questions to ask include:

• What are your key workflows and processes?

• How can you refine these for better value delivery?

• How do you communicate this value to your clients?

• How do you differentiate yourself from your competitors?

• How do you get your business in front of the right clients?

• What more could you be doing to support the achievement of your goals?

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Step 6: Review your cost structure

Ideally, every action your business takes should drive your bottom line. Check in on your cost structure to make sure it supports this kind of sustainable trajectory. If not, it’s time to adjust your business model.

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Pro tip: Extensive research has shown that the property management industry faces significant and ongoing pushback on fees. The reason is simple: most customers simply cannot see or appreciate the vast majority of value they receive.

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One way to address this challenge is to review how you communicate your value at the same time as reviewing your cost structure. Very often, you’ll find you don’t have a pricing issue, but rather a communication gap.

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Step 7: Check your reviews

Let’s face it: property management isn’t really about property – it’s about service. That makes customer satisfaction an invaluable metric to track.

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Asking customers for direct feedback on your business’ performance will help identify where improvements can be made to your products, services, staffing levels or business procedures.

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Don’t forget to keep an eye on your social media and Google reviews as well. These typically spontaneous compliments (or complaints) aren’t just a good insight into customer satisfaction, they can also serve as a valuable marketing tool to give you a quick leg over your competition.

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Pro tip: Don’t forget to check whether your positive reviews are actually translating into a positive bottom line. If you’re the talk of the town (in a good way) but still struggling to make ends meet, it’s a pretty strong sign that your business model needs a rethink.

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For more guidance on identifying and solving real world challenges in your property management business, check out our Ultimate Property Management Masterclass in collaboration with REI.‍