Think that “outsourcing” to a virtual assistant is a domain that only belongs to the sales guys? Think again! Outsourcing property management tasks to specialist practitioners is growing in popularity. Natalie Hastings of Hastings & Co discusses some of the things that you should look for.
Business owners in all industry sectors are constantly looking at effective ways to contain overheads and reduce costs. In these challenging economic times, smart real estate industry operators look for new initiatives to create ongoing efficiencies and better serve their clients. Outsourcing your professional services can help you grow your business and improve your bottom line, even when the going gets tough!
For a business owner, the thought of outsourcing can be daunting. Perhaps it’s fear of potential loss of control or productivity? In reality, engaging a best practice professional service provider can improve your output, save you money, and reduce risk.
Most agents are probably already outsourcing some parts of their business (for example, IT, cleaning, maintenance) but have not considered outsourcing professional services such as General Account Bookkeeping and Payroll, Trust Accounting, Property Management and Sales Training, Database Efficiency Reviews, Procedures Manuals and Training.
An industry friend recently mentioned that she couldn’t understand why real estate principals don’t think twice about paying big dollars to outsource IT, but cut costs by burdening inexperienced staff with the responsibility of the most important and highest risk component of their business – the trust account! It doesn’t make sense to me either.
I have come across some interesting cases of why outsourcing to professional services providers (OSSP) occurs. Following are two examples of transition to outsourcing, demonstrating very different six-month journeys.
Case Study 1 – A Step By Step Transition
Agent A had been successfully trading for over 20 years, when the retirement of a long-term employee was the catalyst for change. Mr A was open to modernising his business operations, and researched OSSP and different software systems. He felt that he required more efficient revenue reporting to help with financial projections. He was about to engage an OSSP at considerable cost, including changing his software and banking systems, when a friend recommended another OSSP. He found they could plug into his existing business and had the industry experience and skills to maximise the capacity of his current software. He learned that what he needed was already in his existing system, and worked closely with the OSSP to agree on a contract of ongoing service. This included: analysis and identification of efficiency solutions, personalised operations manual, implementation with on-site training, and identifying previously uncharged fees (for example, advertising, renewal and letting fees).
Six months later, the staff are now able to concentrate on income-producing activities and Mr A has experienced huge portfolio growth, employing three additional property managers. His openness to new ways of doing business through outsourcing to reputable providers is already paying dividends.
Case Study 2 – Resistance to Outsourcing
Principal B had been operating for 36 months when she engaged an OSSP to complete end of month while a staff member was on leave. The OSSP uncovered multiple serious deficiencies in the trust account. Ms B (officer in effective control) claimed she not aware of the breaches. She engaged the OSSP to reconcile the trust account for the whole trading period. The OSSP provided Ms B with a detailed findings report, recommending she advise her relevant state body and the estate agent’s auditor.
Ms B continued to ignore the problem and the OSSP continued to alert her of the very real prospect of losing her licence and business over the breaches. Ms B retained inexperienced and naive staff, so the breach was exacerbated. When the situation reached crisis point, she followed the OSSP’s suggestion to restructure and hired suitably experienced staff.
The OSSP provided a plan of action, including engagement of general and trust accounting and ongoing staff training. Six months later, Ms B is now starting to grow her portfolio and is developing strategies to re-engage lost clients. She has overcome her reservations about using and trusting an OSSP and now fully understands a licensee’s legal obligations when dealing with a trust account.
With clear and agreed expectations on both sides, a best practice OSSP will improve day-to-day operations. Your productivity will increase dramatically and you will have more time to grow and prosper your business.
So what should you be looking for? There are quite a few things to consider when deciding on the right outsourcing service provider. Most have the basics, but what are the real make it or break it components?
Personalised Service and Reaction Time
The abilities of an outsourcing firm are greatly varied, usually depending on access to well-rained workers ready and available to do the job. Are they customer service focused with strong communication skills? Are they flexible? Will your OSSP offer you a tailor-made fit for your needs? Do they genuinely want to help you grow your business?
This may sound like common sense, but you would be surprised how many people don’t ask around. Ring your networks! You’d run a reference check for a new employee; why wouldn’t you check your service provider’s credentials?
Look for an OSSP who has worked in the real estate industry and experienced the challenges your team face every day. They will have a better relationship with your staff. The OSSP industry knowledge is also crucial in ensuring your office meets regulatory and compliance requirements.
Experts in Industry Software
Do they have proven high level technical knowledge of your real estate, accounting and banking software? Do they know how to get the best out of your existing systems and create further business efficiencies from your current programs?
Strong Industry Partners
Do they have solid industry partners, such as Real Estate Institutes, training organisations or industry specific software providers? OSSPs who have strategic alliances with other reputable real estate leaders can add further value to your business outcomes.
Plug in Capacity
Would you have to change your software or day-to-day operations, or can the OSSP maximise what you already have? Remember, a best practice OSSP can plug into your existing business practices and further improve them.