A game of two halves?

A game of two halves?


The England football team may have arrived home before the postcards, but it may be their early exit meant the World Cup was less of a distraction for home buyers and sellers than it might otherwise have been. The Summer market remains busy in most places.
 
However, many property experts are suggesting that the second half of 2014 will be less brisk than the first half. MMR is having an impact and certain lenders are tightening lending criteria.
 
Whatever the market conditions for the rest of the year, the way to success is always to find the best way of doing things and to do things that way every day.
 
Our newsletter will give you some ideas to help keep business levels up while our training and consultancy services are geared to assist your staff in raising their standards well above those of your competition.
 

Get in touch and have a chat about how we can make you a winning team!



Sanity not vanity…

Within the last seven days, I have encountered two firms (one estate agency, another in a different but similar industry) who are outwardly successful but who are both on the road to disaster once I stripped away the veneer of their operation.

Two simple business mantras might have saved these two firms. “Cashflow is King” and “Turnover is vanity, profit is sanity.”

Many practitioners recognise that booming market conditions are often followed by tougher times and therefore review all sorts of elements of their business, including preparing new strategies to deal with different market conditions. This kept many afloat where others failed in the last downturn.

Other companies are less swift in embracing change, assessing the market as “great”, both now and for the foreseeable future. A dangerous optimism.

Financial planning

While carrying out consultancy work, we work on a number of key areas including financial planning and budgeting. It is interesting to note how many estate agency firms talk in terms of turnover rather than profit. Equally interesting is the number of business owners who don’t know the detail of the costs of the business and thus the levels of business at each stage in the estate agency process that are critical to ensure profitable trading.

The cashflow situation is obviously a crucial area, and we conduct the simple exercise of assessing the money likely to hit the bank account over coming months and the anticipated costs for the same period.

Detailed review

The first step is to carry out a detailed review of the quality and quantity of the “sold subject to contract” stock. Staff are occasionally slow to remove a sale from the figures in the hope that it will come back together. But for the purpose of this exercise, only bona fide transactions should be included – in other words, where a chain is complete top and bottom. The fee amounts should then be added up, so that a true grand total of future STC pipeline income is reached. This is then added to the fees of sales which have exchanged but not yet been paid. A total “pot” of forthcoming income thus appears.

By reviewing previous company data, it typically emerges that traditionally a certain percentage of this “pot” translates into bankings over a subsequent four month period. By applying this ratio to their current scenario, a company could reasonably accurately calculate the following four months income.

Income from lettings and property management should be assessed in similar fashion.

The other side of the financial equation is a detailed forthcoming costs assessment, to cover the equivalent period.

A list of all likely outgoings is prepared and a line by line forecast is carried out. Each element’s prediction is reached by way of the study of previous expenditure along with careful consideration of certain known quantities. Staff, cars, rent, rates, utilities, advertising, portal costs, technology, insurances, tax and so on.

In my experience, in many cases, agent’s first guesstimates at future costs are lower than a detailed analysis reveals.

Once each expenditure line has been agreed, a total of the following period’s outgoings can be reached. This is then subtracted from the previously agreed income forecast.

In the case of the companies for whom we carry out this financial health check, the results are varied. For some, the figures are encouraging, and the positive balance can indicate the level of funding that might be available for business development or for putting in the “war chest” ahead of tougher times. For others, the calculation makes concerning reading, although the very fact that a future negative scenario had been identified allows the firms in question to plan strategically to increase income and drive down costs before the situation becomes insoluble.

Just last week, with the aforementioned agent who brought me in as a consultant, the above exercise revealed a likely loss over the following four months of almost &40,000.

What to do

With our guidance, the owner of this company took a series of decisions under the “increase income” and “reduce costs” headings. The former included adding value to their service to vendors to justify an increase in fees, quoting fixed fees rather than percentages to protect income amounts in the event of properties selling at lower prices and making more of other income streams such as financial services, conveyancing and survey referrals.

Staff are being trained in key disciplines, and targeted to achieve appropriate levels of income. The remuneration structure will change to reward income rather than simply units.

As far as reducing costs is concerned, marketing and advertising budgets were reviewed and a series of minor changes made (for example, staff erecting and changing boards) which once combined brought costs below the forecast income levels, thus ensuring profitable trading.

We will carry out these financial reviews at the end of each month with this firm and suitable business decisions will be made accordingly.

I fear for those adopting the “ostrich mentality” of burying their heads in the sand and expecting the market to stay busy forever. After all, night always follows day…



Call me old-fashioned…

The managing director of a small estate agency positively beamed with pride as he explained the expensive computer system which was going to revolutionise and improve his company’s sales beyond measure. Or so he thought.

But a year later, the results have not been as great as expected. In truth, the computerised sales approach has been a double-edged sword. On reflection, Mr M.D. feels that if he could turn the clock back (one of the few things his whizzy computer cannot do), he might have done things differently.

Of course, there are positives that the system has created.

Matching applicants to properties is quicker. The computer serves as an efficient memory-jogger for the staff. It includes a watertight diary system. A myriad of data is but a button push away. Every possible report relating to business performance can be produced quickly and simply. And there are many other advantages besides…

But in the aforementioned firm, the new computer-driven culture had reduced, and indeed almost replaced, the all-important human touch.

On conducting a telephone ‘mystery shopper’ exercise, I discovered that every single call was structured identically. The computer screen controlled the conversation. All calls featured exactly the same questions in exactly the same order, accompanied by the sound of the rat-a-tat-tat of the keyboard, as information was logged on to the system.

There was no attempt to build rapport, nor any evidence of warmth or spontaneity on the part of the negotiators. I felt that I was being logged on to a database as just another entry. It was all terribly cold and impersonal.

The staff even used phrases like “If I don’t put semi-detached on the system, you won’t get those details”, and even the ridiculous question “What is your minimum price?” – I’m always tempted to say 50p at that point. Once the minimal qualification had come to an end, we get a touch of Little Britain as the negotiator says “Let’s see what the computer shows we have available...” It was worryingly clear that any subsequent service to be received by an applicant would be entirely dictated by a machine and not by a human being.

As a result of the screen-driven conversation, negotiators relied entirely on the computer match. In one case there were supposedly in excess of 50 suitable properties. Can you imagine a typical applicant truly digesting information on that many properties and having the time to accurately home in on the ones worth looking at?

The limitations of this type of conversation led to poor qualification, and thus a high degree of guesswork on the part of the negotiator as to the real needs of the applicant.

One of the real concerns was that I had was that the essential questions that need to be asked when qualifying a prospect did not feature in the conversations – simply because those questions were not prompted by the screen.

There was another significant problem, namely that all applicants were entered straight on to the computer system without sufficient quality control being exercised, leading to thousands of applicants needing to be serviced, the vast majority of whom never made the agency any money.

Later, one negotiator told me that it was not unusual for a new instruction to be matched against over 150 applicants. As a result, the staff had become emailers rather than salespeople.

Upon my tactfully reporting back the findings of the ‘mystery shopper’ exercise, the managing director spent time considering the potential pitfalls of his firm’s approach, and together we came up with a plan of action which involved a lot of changes.

Applicants are now initially registered on forms, which allow for a more natural conversation and for flexibility as to the order in which the information is gleaned.

A follow-up telephone call is then made to the applicant after 48 hours to check that property details have arrived safely, to requalify and to encourage viewings.

Genuine hot applicants (those that are truly ready, willing and able to purchase) are managed by a separate card system. They are entered onto the database too but they are, after all, not going to need to be on it for long, as they will be buying imminently.

Doubtless this procedure will sound sacrilegious to some agents in times of striving for a “paper-free” environment, but the benefits do genuinely outweigh the downsides.

This revised approach has led to a lower number but higher quality of applicants on the active database. The hours freed up are used to keep in touch with applicants by telephone, persuading them to view and buy.

In short, the computer is no longer the master but the slave, and business is very, very good.



Don’t be a Twit…

An effective Twitter account is a key strategy by which you build interaction and relationships with potential customers.

There are more than 250 million monthly active Twitter users. More than 15 million UK adults have used Twitter at some time. Adults up to the age of 34 form the most active group with over 45% of this category having had a Twitter account at some time in the last 3 years.

Your company may have a Twitter account but the medium works even more effectively if key staff members have Twitter accounts and build a personal profile that underpins and informs about your brand both personally and professionally.

Your objective through the Twitter platform is to create a buzz around you and your brand. You should be tweeting on themes rather than directly marketing properties. I personally unfollow agents who merely autotweet their available stock and I know I’m not alone in this policy.

Astute agents will pick themes like the local property market, unusual happenings and properties, local events, company sponsorship of charities, celebrity activity in the property market and so on.

Twitter is a very transparent form of communication and if you are going to use it for business generation and influencing, you do need to show a degree of discipline in what you tweet. Remember you are trying to create a wide range of followers - so how much you had to drink on Saturday night is not necessarily the right thing to be tweeting to potential customers!

One of the positives of Twitter is that you can follow key local decision makers and influencers like journalists on the local newspaper, local community leaders, key business people and often provide a real new route to bring coverage and publicity to your company through them receiving your tweets and retweeting them.

You can soon build a really positive profile and brand within Twitter by engaging, informing and, in some cases, amusing. We are pleased that TM training has approaching 5,500 followers and that our parent estate agency company Thomas Morris Sales and Lettings (@ThomasMorrisEA) has a similar number. If you would like to join our happy band of followers, please do so – Julian and Peter are @agencytrainer or @agencyadviser respectively.

Some estate agents are fearful of Twitter because it allows outsiders to comment on them or their company and for those messages to be retweeted to other followers.

However there can be a positive side:

I know of one office where a tenant tweeted that she was having difficulty receiving a response from that office via email, but was contacted immediately via Twitter and received a call within 15 minutes from the receipt of the tweet…that then led her to tweet “Thank you for providing an excellent service….I really would recommend you to my

friends”!

A fan created from a complaint – such is the power of Twitter…



2014 Tour Date

Thursday 25th September in Coventry

Winning Quality Instructions  (morning session)

For sales and lettings valuers, this course covers things an exceptional valuer needs to do before, during and after an appointment to win the business at the right price and on the right terms. The key objectives are improving conversion rates, securing appropriate asking prices and maximising fees. It has received amazing feedback and positively influenced the performance of all who have attended it.

And

Increasing Market Share of Instructions and Sales (afternoon session)

Halfday course to cover how to get through more doors, be the agent of choice in your area, differentiate yourselves from other agents, retain clients, create raving fans of your business. With stock the key to success, this course is worth its weight in gold!

The trainers will be Julian O'Dell and Peter Chapman

We look forward to seeing you!

(There are only a limited number of spaces available.)


 Each session costs &99 plus VAT per delegate or you can book a full day at a cost of &170 plus Vat per delegate to include lunch.

To book or for more information contact us on 01480 405583, email us at admin@tm-traininganddevelopment.co.uk or visit our website http://www.tmtraininganddevelopment.co.uk/online-booking.php

 



So who ARE TM training & development?

Julian O’Dell and Peter Chapman offer training and consultancy services to sales and lettings agencies around the UK. Julian is also a respected contributor to trade magazines and regularly speaks at industry conferences and forums. Peter is a former MD of Chesterton Residential in central London.

Delegates on courses have commented on their extensive knowledge and passion for training and development of estate agents, and notably that courses are highly relevant to the ‘real world’ in which agents operate. This is in part due to the fact that TM training & development are part of award winning estate agency firm Thomas Morris with seven offices in and around Cambridgeshire, and a highly successful Fine & Country operation.

Thomas Morris have won a number of industry awards including the coveted Relocation Agent Network accolade of the ‘Best Independent Estate Agent in the UK’ in 2011, 2012 and 2013.

Julian and Peter now work with many of the industry’s leading firms as trainers and consultants and believe in delivering motivational and inspiring training that makes a real difference to performance.

Julian lives in Milton Keynes and describes his passions in life as his wife, his four children, three grandchildren, live music and Luton Town Football Club. Peter lives in Luton and takes an active interest in local politics. He is also a follower of Luton Town.

10 Good reasons to choose TM training & development

Track record – TM training & development work with major players within the industry including previous winners of the ‘Best Independent Estate Agent in the UK’ award Romans, Webbers, Gibbs Gillespie, Northfields, the Relocation Agent Network, the Guild of Professional Estate Agents, Fine & Country and Your Move.

Relevant – The courses are delivered by trainers who are still involved in agency as opposed to a ‘teacher’ who has never worked in the business or perhaps has not done so for some time. Delegates on our courses appreciate the training being conducted by someone who truly understands their business and who can reinforce the principles covered by way of topical real life scenarios. This element of our approach ensures techniques are relevant to today’s marketplace. All courses are “tested” on the Thomas Morris staff to ensure the content works. Every session has a clear focus on ‘best practice’ and reaching exceptional standards of skill and behaviour.

Response – Over 98% of respondents rate our training as ‘excellent’ or ‘good’. Feedback typically includes that the courses are motivational, informative and enjoyable, but most importantly that the ideas will genuinely make a positive difference to performance in the workplace.

Quality – Estate agency firms who have employed TM training & development for in-house training or consultancy work stick with us! We are proud that we have retained our clients in such a competitive environment. Our earliest client firms from 2003 remain clients all these years later.

Variety – Courses are provided on all sales and lettings disciplines and bespoke programmes can be designed at no extra charge. This allows companies to receive training that is specific to their own needs and culture. We also carry out consultancy work to assist in highlighting strengths and weaknesses, help business planning and design training programmes. Finally TM training & development carry out ‘Mystery Shopper’ exercises to give estate agency owners a real insight into staff performance and customer service levels.

Impact – Courses are designed to make a real difference and we operate on a desired maximum of 20 delegates per course. This ensures that each attendee gains maximum benefit from the learning experience.

Communication – Feedback is provided to the company after each event and can include specific reports on individuals if desired.

Flexibility – Training can be provided anywhere around the UK at a venue of your choice. This ensures delegates have a limited distance to travel and can get back to the workplace immediately to put things into practice. Courses can be full day, half day or just a couple of hours of short sharp sessions. We also have our own bespoke training centre which can be offered as a venue for training within the overall daily charge.

Value – Many clients report that they consider the training to be the ‘best investment’ they ever make. The achievement of extra business, as a result of the training, ensures that the initial outlay is recouped quickly and many times over.

Guarantee of satisfaction – If the training provided does not meet your expectations, we will refund your fee….an offer which has been in place since we started our business but an offer which has never been necessary!

 

TM training & development can be contacted on 01480 405583, admin@tm-trainingandevelopment.co.uk or www.tmtraininganddevelopment.co.uk.



Thought for the day...

“Your work is going to fill a large part of your life,
and the only way to be truly satisfied
is to do what you believe is great work.” Steve Jobs