Growth Summit 2016: How agents can grow their businesses by Nick Salmon, Managing Director of EYE
In the world of business training and consultancy there are those that can talk the talk, those that can walk the walk, and relatively few who have the credentials to do both.
The Property Academy Growth Summit at the May Fair hotel in London last week provided the 50+ delegates with several speakers who have ‘been there, done that’ and can therefore speak with true professional knowledge and first-hand experience.
Contributors included business psycologist Sue Firth, ex-Countrywide managing director Bob Scarff, Peter Knight, chairman of Property Academy, and Peter Fuller, managing director of residential lettings at Romans.
The summit focused on how to grow an agency business, effectively manage change, and how to put together a growth strategy with the end goal of profitably exiting the business via sale or merger. It was a highly detailed set of presentations of which this report can of course only give a flavour.
Sue Firth’s presentation drew on her extensive experience of helping businesses manage change (from A to B via C) and deal with the inevitable stresses that will affect management and staff. In doing so she emphasised the fundamental difference between managing change (which can be scary for staff) and managing growth (which staff usually see as a positive).
When undergoing a process of change in a business – as for example when an acquisition or merger takes place – the basic essentials are to clearly communicate, clearly explain, and to make progress in bite-sized, easily understood chunks. Senior management need to remember that just because they know exactly where things are going, staff may not.
Use of language and understanding how to engage with staff at differing levels is vital if they are to be made to feel involved and informed, and so that they buy in to the changes and assist the process rather than holding it back.
Leonardo Bonacci, later Fibonacci, was not a name familiar to many of the delegates but Peter Knight’s engaging and informative talk soon put that right. Back in the Middle Ages, Leonardo, an Italian mathematician, pondered the question of how many rabbits you would end up with if you let an initial pair loose in a field for a year to do what rabbits do best.
The calculation of 1,1,2,3,5,8,13 etc ended up at 144 and the calculation became known as the Fibonacci Sequence. Its ratios can be found throughout nature and art, and, by Peter’s reckoning, in business.
Taking us through the sequence of growth in the number of branches a business operates, he highlighted the issues that bring the rewards – and the problems. With people at the heart of any successful business it is immensely important to concentrate of recruitment, remuneration and recognition – the latter being possibly the most important factor in retaining good staff.
More people means more variation on delivery of services. Systems make for consistency.
Peter’s Top Tips for growth included ‘the extra 50p, 60p, 70p in the £’ by which the company derives incomes additional to the fee from the basic sale or letting; having an in-house or outsourced call centre operation that can speedily respond to enquiries; plenty of market research to identify new markets and to plan expansion far in advance; and to have a war chest of funding in place before you actually need it.
Peter was joined on stage by Bob Scarff for a Q&A session in which Bob drew on his 37 years agency experience – and told us he’d only gone into agency because he was too fat to be a Formula 1 driver.
His view is that the biggest key to growth is to be absolutely clear what it is you want to grow. It could be more branches – but don’t just add branches for the sake of vanity. Or higher fees. Or it could be the measure that he himself applies – profitability. No matter what size the business, a clear strategic plan is essential.
Given his extensive experience of the process of acquisitions Bob said that the single biggest mistake that can be made by the management of an acquiring business is not recognising what an alien force they will be seen as by the people in the business being acquired. Hostility can be the result and it is therefore essential to positively engage the new workforce in the process at the earliest opportunity.
Where Lettings businesses are being purchased too many companies forget to engage with the landlords who will be affected. Consequently it is all too easy to lose the vital stock of rental properties.
Bob gave the delegates a whole raft of do’s and don’ts when it comes to selling a business or merging with another and explained the steps necessary to avoid a last-minute renegotiation of price.
He does not necessarily subscribe to the view that ‘you can’t have profits AND growth’ as, with a sound plan and good management, it is sometimes possible to have both, so long as whilst going for growth an eye is kept firmly on the existing business so that it does not falter.
Peter Fuller started out with Mann & Co in the early 1980s and has been with Romans for 26 years, the firm now having 28 letting and management branches and, with the recent merger with Leaders, over 10,000 rental properties on the books.
Peter explained how the business grew because Lettings was put on the same footing as sales when it came to resources. He too emphasised the need for a clear plan for growth and underlined that it can only be achieved with the right resources and the right people. Most of Romans growth in letting has come by acquisition and in this regard Peter is clear that ‘you are acquiring relationships’.
A business may look good on a spreadsheet but what is actually going on in the relationships with customers – and especially landlords. If existing landlords don’t like the firm that is acquiring the letting portfolio it is all too easy to lose them. And that can be serious if just a few landlords own most of the properties in a large portofolio.
Peter’s tips included the advice that if you want to sell a letting business, make absolutely sure that the client account reconciliation is sorted. And to grow the business, back your own judgement. He brought a laugh by saying that if they had listened to the accountants, Romans would not be as large as it is.
Rounding off the Summit came a panel discussion with all the contributors giving their views on what makes for successful growth. The conclusion was that it is great people that make for great growth. Recruiting and retaining excellent staff lies at the heart of driving the business forward.
A number of succinct observations were made that will ring bells with many business owners and managers.
Bob Scarff noted that, ‘We turn superstars into idiots’. When a new staff member arrives they are the best thing to happen to a business. When they go they are often spoken of as anything but. He also observed that customer expectations change fast these days and that the successful agents of the future will be those who focus on what the customer wants.
Peter Knight urged agents to find points of difference in their proposition in order to avoid the public perception that ‘all agents are the same.’ Understand the customer and build the proposition round them.
Peter Fuller emphasised the importance of prospecting for new business and for the staff doing it to be competent. As an industry, ‘We expect people to make these calls but they have never been trained to do it’.
Sue Firth touched on the fears that some people have in relation to the emergence of ‘non-traditional’ agents. She observed that in most cases these newcomers to the market are not actually local to existing agencies and that the way to compete with them is to concentrate on what they are not doing well.
This event was unusual in that it lasted just the morning but it was a very concentrated, fact-filled few hours that provided delegates with a huge quantity of very practical advice and very useful information.
Those I spoke to told me that they had learned a lot from the Summit and that they would be putting into practice many of the techniques and strategies that the expert speakers had presented.
Finally, and because you always ask, I can report that the Coronation Chicken was superb and the miniature chocolate desserts were divine…