Knowing your business’ strong points and weaknesses can determine your long term success.
I speak with a large number of business owners and heads of property management on a regular basis, and we often end up talking about data and its importance.
Now, before your eyes glaze over and you think, ‘Wow, I don’t want to be caught sitting next to you at a dinner party’, let me explain how data is your ally in business.
When I delve deeper into the data conversation, most people I speak to are referring to key performance indicators (KPIs) of their property manager, as the benchmark for how well their business is doing.
But is that the data you should be measuring?
Data can tell you lots of things.
It tells you the past, but more critically, if used correctly, it can help you map the future.
As the industry evolves to a property services-type model of service delivery, there are some critical pieces that need to be understood.
I can’t count the number of times that I have heard the term “cost to serve.”
That is the business cost of servicing the agreement you have in place with your customer.
Understanding the cost to serve is critical in the environment we operate in.
But where do you start and how do you cut the pie?
Knowing how many routine inspections you carry out annually, how many lease renewals, and how many maintenance requests you process are critical to the cost to serve.
So is how much income each portfolio brings in annually.
These data points can then help you with designing your business plan moving forward and what strategy you will chase.
Often people just want more properties on their rent roll, but don’t really understand if that will make them more profitable.
This level of granularity represents a huge opportunity to pinpoint where time is best spent or not spent, particularly as the industry moves to a more property services model.
Knowing the number of inspections conducted and how much they cost per inspection will shape how you evolve your fees to a pay-as-you-go basis rather than an existing one size fits all approach.
Relevant data captured and reported correctly is indisputable.
Actionable analytics and insights remove subjectivity.
Without the correct reporting in place, all your team has is instincts and opinions being thrown around, taking you in a million different directions.
Using a cost-to-serve analysis to value and segment portfolios by profitability rather than topline revenue or staff KPIs is what can drive growth and substantially improve your business’s bottom line.
Take the time to set up reporting or invest in business analytic tools that will present the relevant data.
When the numbers are available and understood by everyone in your business and the data supports your strategy, it becomes difficult (or impossible) for anyone to argue with your approach.
Better yet, it has the potential to help make your business more profitable.